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Cablegate: Strengthening Agricultural Credit in Afghanistan

VZCZCXRO6571
PP RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #4183 3621644
ZNR UUUUU ZZH
P 281644Z DEC 09
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 4343
RUEHC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY 0140
INFO RUCNAFG/AFGHANISTAN COLLECTIVE

UNCLAS KABUL 004183

SIPDIS

E.O. 12958: N/A
TAGS: BTIO EAGR EAID ECON AF
SUBJECT: STRENGTHENING AGRICULTURAL CREDIT IN AFGHANISTAN

1. Summary: There is broad agreement within the Afghan government
and among donors that a dramatic increase in the availability of
agricultural credit is critically needed to rebuild Afghanistan's
agricultural sector. Recognizing this goal, the Minister of
Agriculture, Irrigation and Livestock (MAIL) Mohammad Asif Rahimi,
newly nominated this past week for another 5 year term, would like
to consider a range of options on how best to accomplish this goal.
He has also emphasized that this credit assistance should utilize
new products and reflect a new model of doing business. End
summary.

2. On December 8, Ambassador Wayne met with the Minister Rahimi to
discuss the agriculture credit issue. Minister Rahimi said he is
not against the resurrection of a "bank," but he is against the
former bank management, former management practices and former
products used by the bank. He requested the Embassy support a
thorough study of the past model and of other institutions and
models that may be better suited for Afghanistan today.
Specifically, he said he mentioned options for a new public-private
bank, a new public bank and for funding using private sector
mechanisms perhaps with subsidized interest rates. After careful
review of these options and consultation with his staff, the
Minister said he would approve one of the credit options, based on
their relative merits. He would then propose this option to the
GIROA Ministry of Finance and to donors for funding. If the study
demonstrated that there would be a benefit to a new public bank and
to call the new institution the Agricultural Development Bank,
Minister Rahimi said he has no objection, but it should have new
management, new products and represent a new model.

3. Post would like to ensure that we are able to provide Minister
Rahimi with a good assessment of several strong potential options
for providing agricultural credit in Afghanistan, as he has
requested. We may have a preferred option among the options we
present, but it will solidify our relationship with this key
minister to provide a range of options with pros and cons. Embassy
would appreciate rapid USAID and USDA assistance in developing
options.

RICCIARDONE

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