Unlocking Sustainable Agriculture: APEC's Secured Finance Reform for Food Security

The Asia-Pacific Economic Cooperation (APEC) and government representatives from the organization's 22 member economies recently convened a Policy Dialog in Lima, Peru, to address the critical issue of mobilizing private capital for agriculture in the APEC region. The purpose of this gathering was to educate government officials on the available legal instruments that can increase agricultural production and enhance food security.

Empowering Farmers, Securing the Future

Revolutionizing Agricultural Financing with the MAC Protocol

At the heart of the discussions was the international commercial treaty known as the MAC Protocol, which aims to improve food security and drive sustainable agricultural productivity gains across the Asia-Pacific region. The MAC Protocol, if ratified by APEC member economies, will make it easier and less costly to finance agricultural equipment, a crucial component in boosting agricultural output.The treaty establishes a clear and transparent process for determining legal recourse in the event of a debtor defaulting on payment obligations. This provides creditors with a set of remedies, including the ability to repossess, sell, release, or export the MAC equipment, as well as collect income or profits from its use. These security rights will be registered in an electronic international registry, accessible 24/7, ensuring transparency and ease of reference for creditors and courts in determining legal priority.By reducing uncertainty and risk for all parties involved, the MAC Protocol will enable and encourage improved availability, terms, and cost of financing for agricultural equipment. This, in turn, will unlock new opportunities for farmers and agribusinesses to invest in the tools and technologies they need to enhance productivity and food security.

APEC's Commitment to Secured Transactions Reform

Recognizing the importance of the MAC Protocol and secured transactions reform, APEC has announced plans to hold a three-day technical workshop in 2025. This workshop will bring together senior government officials from the organization's 22 member economies to further explore the benefits and implementation of the treaty.AEM, the industry representative, will continue to advocate for the ratification of the MAC Protocol by APEC's member economies. This ongoing engagement and collaboration between the public and private sectors will be crucial in ensuring the successful adoption and implementation of the treaty, ultimately leading to a more secure and sustainable agricultural landscape across the Asia-Pacific region.

Unlocking the Potential of Secured Finance

The Policy Dialog in Lima has highlighted the critical role that secured finance reform can play in addressing the challenges of food security and agricultural productivity in the APEC region. By providing a clear and transparent legal framework for agricultural equipment financing, the MAC Protocol has the potential to unlock new sources of capital, empowering farmers and agribusinesses to invest in the tools and technologies they need to thrive.As APEC member economies continue to explore the benefits of the MAC Protocol, the stage is set for a transformative shift in the way agricultural financing is approached. This collaborative effort between governments, industry, and international organizations will be instrumental in driving sustainable agricultural growth and ensuring food security for generations to come.To learn more about the MAC Protocol and how it can benefit your organization, please contact AEM's senior advisor, global public policy, Alexander Russ, at aruss@aem.org or (202) 898-9006. Stay informed on the latest developments by subscribing to the AEM Industry Advisor.