This brief is a part of "Technical briefs on rural and agricultural finance" and it highlights lessons learned in the use of subsidies as instruments of agricultural development finance. It then proposes how to strengthen agricultural finance particularly for small-scale farmers through five major approaches: micro-insurance and weather-index-based insurance, credit guarantee funds, warehouse receipts, specialized agricultural development banks and agricultural investment funds. It is based on a study conducted by FAO and financed by IFAD and presents emerging recommendations for policy makers.