In the world of agriculture, time is a critical resource. The window for planting, harvesting, and selling fresh perishable products is limited and highly sensitive to weather and market conditions. For agricultural producers, everyday counts, and having capital and liquidity throughout this period can make the difference between success and failure.
In the case of farmers, not having sufficient funds to pay for labor, cover inputs, cover transportation or packaging costs, coupled with the waiting times to receive the corresponding payment, can prevent the continuity of their operations.
This is where having the right strategic partners comes into play that not only facilitate this liquidity, but also understand the landscape of the agricultural sector and the specific needs it has. The opportunity cost of not having the necessary funds can be, for the vast majority of producers, catastrophic; especially in an industry as volatile and changing as fresh produce.
That is why at ProducePay, from our founder – coming from the fourth generation of a Mexican family of farmers – we understood that our products must be tailored to the needs of the entrepreneur in the agricultural industry. This is why we have been able to help thousands of farmers in Mexico and South America, having marketed the equivalent of more than 4 billion dollars of fresh produce exported to the United States and Europe.
For those producers who have chosen to partner with ProducePay, this opportunity cost translates into several key aspects:
First, there is the opportunity to plant and harvest at the optimal time. Timely liquidity means farmers can plant at the ideal time in the agricultural cycle, resulting in a more robust and higher quality harvest. Delaying planting due to lack of funds can result in lower production and products that do not reach their full potential, as well as arrival at large consumption centers.
Secondly, there is the ability to have greater access to the market. Within our platform, exporters not only receive financing, but also access to a global network of buyers of fresh produce, so that they can sell in the best conditions, at fair prices and with commercial protection; knowing that there is always a safe market for your products.
Third, there is investment in improving agricultural practices. With capital available, farmers can invest in technology, training, and more sustainable practices. The growing demand for responsibly grown products – especially in consumer countries such as the United States and Canada – has put greater pressure on producers who, due to lack of investment, are unable to transition to these technologies. Such investment not only benefits their own operations, in terms of efficiency, performance, and business opportunities, but also contributes to long-term food security and environmental well-being.
Finally, there is the ability to plan for the long term. The financial stability provided by timely financing allows farmers to make long-term strategic decisions. They can diversify crops, expand, or make improvements that provide them with greater economic security, contribute to the growth of their communities and allow them to focus on their current operation with an eye toward future growth.
Agriculture, a fundamental pillar
Farmers are the backbone of the food supply chain. However, traditionally, agro-industrial activity has been considered risky by investors and credit institutions, derived from the different factors that affect its performance (climate, pests, price volatility, etc.). However, at ProducePay, we are convinced that agro-industrial activity and the actors that make it up represent an asset that makes up an attractive investment opportunity.
By: Claudio García Salgó, Executive Director of Sales for Latin America at ProducePay.
With more than 20 years of experience in the financial sector and a track record of success in growing financing for the agri-food sector, Claudio has held senior management positions in companies such as Citibanamex (Citibank), AgroFinanzas and FIRA. He currently serves as Executive Director of Sales for Latin America at ProducePay and actively collaborates with the Latin American Conservation Council (LACC) to promote farmer inclusion and sustainable food production in Latin America.
