Conditions for creating a farm credit system

A bank for agriculture must be adapted to the specific features of the farm ing sector. Competitive holdings can be treated by the commercial banks. Fo r small and medium-sized holdings, a co operative bank with many branches i s often the best solution. Micro-holdings and all the small village activit ies can be financed by a new type of bank more or less on the model of the Grameen bank in Bangladesh. In all cases, and particularly in transition ec onomies, it is necessary to comply with the specific conditions of agricult ure. And before creating a new bank, some important questions must be answe red: What type of bank: private, co-operative or publicly owned bank? What resources should the farm bank have? An autonomous bank or a specialised division within a larger co-operative s tructure? Market interest rates or State subsidised interest rates? In each country, the answer will be different in connection with the situat ion of agriculture.