Agrarian Notes a new tool for financing agricultural producers

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An agrarian note is a modern financial instrument for agricultural producers that allows them to obtain a loan secured by future harvests. It is issued in the form of an electronic security confirming the farmer’s obligation to repay funds or deliver agricultural products under defined conditions.

Depending on the type of obligation, agrarian notes can be commodity or financial. Ukrainian banks may use only financial agrarian notes as collateral, under which the borrower undertakes to pay funds to the lender within a specified term.

Agroprosperis Bank was the first bank in Ukraine to finance an agricultural producer through an agrarian note. The bank was also the first to offer lending under agrarian receipts, introducing a new approach to agricultural finance.

Benefits of Agrarian Notes

Agrarian notes provide wide opportunities for financing on transparent, convenient, and modern terms. Key benefits include:

1. Accessible to small and medium farmers. Enable financing against future crops without the need to pledge real estate or equipment — especially relevant for smaller farms.
2. Fully digital process. The agreement is concluded online: no paperwork, bank visits, or notarization. This saves time and simplifies cooperation.
3. Legal protection and transparency. An agrarian note is a security registered in Ukraine’s depository system. Verification is conducted through integration with state registries, ensuring security for both parties.
4. Broad legal usability. As a non-issuance security, an agrarian note is a full-fledged civil law asset. It can be transferred, pledged, inherited, or used in settlements.
5. Access to organized capital markets. Registration in the depository system enables transactions on organized markets and potentially allows international investors to participate via the Central Depository’s correspondent relations.

How to issue an agrarian note

To obtain financing against a future harvest via an agrarian note, an agricultural producer must follow a few key steps:

1. Verify land rights. Only a producer who owns or legally uses agricultural land can issue an agrarian note. If multiple parties are involved, the note is issued jointly, with shared liability.
2. Open a securities account. A contract must be signed with the National Depository of Ukraine (NDU) to open an account and register the note.
3. Register in the Agrarian Notes Register. Both the producer and the lender create personal electronic accounts in the Agrarian Notes Register, which is part of the depository system.
4. Complete and sign the note. The producer fills in the required details online. Both parties sign the document using a qualified electronic signature.
5. Receive financing. Once verified via state registries, the Central Depository records the note in the lender’s securities account. From that moment, the note is considered issued, and financing can be disbursed to the producer.

Need advice or more information?

• Call our contact center: 0 800 300 170 (free within Ukraine)
• Email us at partner@ap-bank.com
• Contact your regional manager or leave a loan request

 

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