July 2014—Wheat is the most important crop in Afghanistan, produced by 78 percent of farmers, with wheat flour serving as a staple of the Afghan diet. Since many Afghans rely on the crop for their livelihoods and daily meals, USAID provides financial and technical assistance to the Afghanistan Ministry of Agriculture, Irrigation and Livestock (MAIL) to aggressively support wheat producers.
Thanks to a USAID grant, in July 2010, MAIL established the Agricultural Development Fund (ADF), a financial institution that provides credit to farmers and agribusinesses. So far, ADF has provided loans, with terms acceptable under Islam, to four major flour mills in Kabul and Balkh provinces. These loans have allowed the mills to increase their output, directly benefiting farm households and consumers, who now have access to markets and increased supply of locally produced flour.
Bakhtar Flour Mill is one of these processing facilities. The mill has purchased wheat from six provinces: Balkh, Kunduz, Takhar, Samangan, Baghlan and Jawzjan.
"Before receiving the loan from USAID, we were only utilizing 35 percent of our processing capacity. The loan provided us with working capital. Thanks to the USAID loan, Bakhtar Flour Mill is now operating at more than 80 percent capacity. Increased and more stable output has enabled my company to become a supplier of the World Food Program, among others,” said Abdul Hamid, who is head of the mill.
The four loans provided to the flour mills have resulted in increased flour production by 22,500 metric tons per year, the creation of 230 full-time jobs, assured markets for 2,000 farmers, and greater food security.
USAID granted $100 million to MAIL to establish the fund. To date, ADF has processed loans worth more than $93 million to 24,000 farmers and agribusinesses in 33 provinces throughout Afghanistan.
Last updated: January 26, 2015