Wheat is the single most important staple crop in Afghanistan, and therefore a strategic value chain for the Afghan government in general and the Ministry of Agriculture, Irrigation and Livestock in particular.
Wheat processing also produced byproducts that are of importance to the livestock industry.
Since 2010, the Agricultural Development Fund (ADF) has provided several loans to flour mills around the country. Most recently the ADF provided a loan to a Flour Mill company based in Kabul, with the fundamental purpose of enabling the company to increase throughput by procuring domestically grown wheat.
This ADF loan is strengthening and expanding on the concept of producer networks, a scheme that the company has been promoting in Balkh, Kunduz, Takhar, Samangan, Baghlan, and Jawzjan provinces.
The loan is supporting the industry in several ways: a) the company's efficiency has substantially increased from using 30 percent of its installed capacity to 80 a current percent, b) increasing effective demand for wheat, while strengthening the vertical coordination along the value chain, and c) Increasing output with positive effects on food availability. The latter has allowed the cmpany to become a regular supplier to the World Food Program.
To date ADF has approved loans for over US$76million. These loans are directly benefiting over 20,000 farmers in 30 provinces. The work carried out by this company is one of several examples of how credit is supporting the growth of agriculture value-chains.