##respective of their location, have access to adequate and timely financing, we will be better positioned to address the challenges of sustainability and resilience in agriculture. traditional lending practices have certain limitations in catering to the needs of the agricultural sector. agriculture is inherently seasonal, and returns are often delayed or reduced. innovative financial solutions are necessary - ones that are flexible and tailored 3 / 6 bis - central bankers'speeches to the specific needs of farmers. this coupled with crop insurance products that cover weather - related risks can help mitigate the uncertainties farmers face. additionally, blended finance models - where public funds are used to leverage private investmentscan be instrumental in providing the necessary capital for sustainable transitions. this would not only mobilise resources from multiple sources but also distribute the risks and returns more equitably. in this context, i would like to highlight five solutions which could go a long way in addressing the issue of financing sustainable agriculture. role of collectives farmer producer organisations or fpos have emerged as a crucial mechanism for addressing the specific challenges faced by small and marginal farmers. their growth has been significant, with over 24, 000 farmer producer companies ( fpcs ) formed by march 31, 20236. these organisations are instrumental in scaling up the adoption of sustainable farming technologies developed by research institutions. by aggregating farmers, fpos enhance their bargaining power as well as improve their access to technology and increase market opportunities for their output. to support financing to these organisations, rbi regulations provide that loans to fpos engaged in agriculture and allied activities, up to an aggregate limit of 2 crore per entity, qualify as priority sector lending. if fpos engage in farming with assured marketing of their produce at predetermined prices, loans of up to 5 crore qualify as psl. value chain financing the value chain financing model integrates various stakeholders - farmers, aggregators, traders, processors, and financial institutions - into a coordinated system that improves efficiency across the agricultural process. with changing consumer preferences towards branded, well - packed, safe, and healthy food, there is a need for increased focus on structured agriculture value chains and their financing. for financial institutions, access to various participants in the value chain offers additional business opportunities. warehouse financing agricultural price volatility is a recurring challenge in india, often forcing farmers to sell their produce at lower prices during peak harvest due to immediate financial needs. warehouse receipt financing allows farmers to store their produce in warehouses, delaying the sale until

after 1999, close to a decade after the collapse ; the economic scale of earlier recapitalizations was small relative to that of banking sector ’ s real estate exposure so that these half - hearted measures failed to adequately recapitalize the japanese banking sector. 4 / 11 bis central bankers'speeches in turn, this misallocation of loans translated into significant negative effects for the real economy. because zombie lending kept distressed borrowers alive artificially, the respective labor and supply markets remained congested ; for example, product market prices were depressed and market wages remained high. sectoral capacity utilization also remained low, which destroyed the pricing power and attractiveness of investments for healthy firms competing in the same sectors. ricardo caballero, takeo hoshi and anil kashyap ( 2008 ) showed that, as a result of these spillover effects, healthy firms that were operating in industries with a high prevalence of zombie firms had lower employment and investment growth than healthy firms in those industries that did not suffer from zombie firm distortions. they estimated that due to the rise in the number of zombie firms, typical non - zombie firm in the real estate industry experienced a 9. 5 % loss in employment and a whopping 28. 4 % loss in investment during the japanese crisis period. joe peek and eric rosengren ( 2005 ) were among the first to provide evidence that this inadequate recapitalization of the japanese banking sector had major consequences for the allocation of credit to the real economy. specifically, they showed that firms were more likely to receive additional loans if they were in fact in poor financial condition. they interpreted this finding as being consistent with the ‘ zombie lending ’ incentives of undercapitalized banks. figure 2 shows that the percentage of zombie firms increased from roughly 5 % in 1991 to roughly 30 % in 1996. in related work, mariassunta giannetti and andrei simonov ( 2013 ) found that banks that remained weakly capitalized after the introduction of the recapitalization programmes provided loans to impaired borrowers, while well - capitalized banks increased credit to healthy firms. the authors estimated that the credit supply to healthy firms could have been 2. 5 times higher in 1998 if banks had been recapitalized sufficiently. 5 / 11 bis central bankers'speeches the european story in recent years, the eurozone has been following a similar path to that of the japanese economy in the 1990s and early 2000s. starting in 2009, countries on the periphery of the eurozone