Approaches to Sustainable Financial Mechanisms in Agriculture: International and Azerbaijani Experience

Abstract

Agriculture is a strategic sector of the economy, playing a crucial role in food security, employment, regional development, and social welfare. However, its financing is constrained by seasonality, high risks, low profitability, and limited access to credit, which undermines long–term sustainability. This study uses a systematic literature review to identify the main characteristics of agricultural financial mechanisms and assess the applicability of diversified national and international financing sources for sustainable development. Therefore, the research is based on a systematic review of 41 scientific sources published between 2003 and 2024. Materials were collected from international databases (Scopus, Web of Science) and national resources (Azerbaijan, Turkey, and Russia). Comparative and analytical methods were applied to examine sector–specific risks, financing models, and innovative instruments. The analysis shows that while state support programs provide subsidies and soft loans, major barriers persist, including high interest rates, weak cooperatives, underdeveloped market infrastructure, and low financial literacy among farmers. International practice highlights the potential of complementing traditional sources (subsidies, bank loans) with innovative instruments such as green bonds, venture capital, Islamic finance, and project–based financing. The study suggests that sustainable agricultural finance requires integrative mechanisms that diversify funding sources, strengthen cooperative structures, and improve financial literacy. Applying these strategies in Azerbaijan, alongside international experience, can reduce risks, increase resilience, and ensure long–term sectoral growth. Keywords: Sustainable agriculture; agricultural finance; self–financing; state support; financial constraints