For farmers in Ukraine, securing affordable pre-harvest financing for producing their crops just got easier.

Thanks to the efforts of Ukraine's Ministry of Agrarian Policy and Food, the European Bank for Reconstruction and Development (EBRD) and FAO, a pilot project in the country's Poltava Oblast has issued the first “crop receipts” – a mechanism that enables farmers to use their future harvest − crops, vegetables, even fish − as collateral for financing from banks, suppliers, traders and processors.

Here’s how it works. Farmers receive a crop receipt or bond, which represents a promise to deliver agricultural products, or make a payment, after the harvest or sale of the products. It can also be used as a hedging instrument to avoid the risk of price fluctuations.