We provide a wide array of financial products and technical assistance, and we help countries share and apply innovative knowledge and solutions to the challenges they face. Many smallholder farmers utilize composting waste materials from their own operations and rotate crops between fields every few years to keep soil healthy and fertile. Africa, Asia, and South America have high concentrations of smallholder farmers compared to other parts of the world. INDIANAPOLIS, June 5, 2023 /PRNewswire/ -- Today, Corteva, Inc. (NYSE: CTVA) and the U.S. Agency for International Development (USAID) announced a new collaboration to support Ukrainian farmers . However, the applicability of measures varies across and within countries, driven by different farming systems and practices that lead to different emission mixes (Exhibit 3). Finally, only a handful of powerful, multinational companies such as Cargill control the global trade of cacao beans. We separate rice measures from other crops because emissions from rice production are anywhere from five to 30 times higher per hectare than those from other crops.8This range depends on the type of crop with which rice is compared. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Stay up-to-date on socio-economic progress in our food system with Fairfood's bi-monthly newsletter! implemented agricultural operations targeting agricultural And over consecutive years, this impoverishes farmers, forcing them to sell their possessions or even their land, an unfortunate scenario that can deprive communities of a key source of food. Not only will farmers have to consider changing on-farm practices, but national agriculture research systems will also have to reflect on how to develop and commercialize new technologies, such as drought-tolerant seeds. To make sure its great, wed like to better understand your needs. It will enhance access to quality inputs through a functional, efficient and sustainable fertilizer supply chain in Tanzania and improve access to finance for large fertilizer distributors. Connectivity Project a $380 million IDA-financed regional project between Mozambique and Malawi and a new $300 million Access to Finance & Economic Opportunities Project . Research Paper on Climate-Smart Governance, Understanding the Investability of Smallholder Finance Portfolios and Unlocking Social and Economic Value Through Access to Finance. This paper aims to investigate the impact of microfinance on smallholder farming. Financing is a critical barrier for smallholder farmers to access the other inputs that they need to increase crop yields and income. Financial Access - Realizing Rural Agri-Finance at Scale How Blockchain can help smallholder farmers: get access to finance The project aims to increase productivity by enabling timely access to and appropriate fertilizer use by smallholder farmers. These value chain players include input providers, off-takers, aggregators, processors and agri-tech innovators that provide a range of services to farmers and their collectives. Financial institutions include traditional institutions such as commercial and microfinance banks and a growing landscape of innovative fintech start-ups. All rights reserved. This IFC study aims to identify and disseminate lessons emerging from the work of MFIs that have implemented agricultural operations targeting agricultural smallholders in Latin America and the Caribbean (LAC) to support replication and expansion of scalable approaches. Blockchain technology is helping to empower this revolution by making global agri-food supply chains more transparent, supplying consumers with verifiable information to make educated decisions about purchasing ethical products, and empowering smallholder farmers to move up the value-chain through access to alternative credit systems. Second, the farmers themselves are largely outside the formal economic sector and frequently do not have the meanse.g., collateralto secure loans or other financial support. Washington, DC 20036. See Media Page for more interview, contact, and citation details. Indicate your availability for an interview with our research team. This enables improved social and economic development outcomes. Persisting in All Seasons: Read the Bread for the World 2022 Impact Report. The Rev. All Rights Reserved. An innovative dimension was to support smallholder farmers at scale by partnering them with large anchor firms under an Innovation and Demonstration Catalytic Fund (FCID). Large investments are needed by farmers to replant, irrigate and to transition to more sustainable practices, but banks generally perceive the risks and costs as too high. To tackle the challenges faced by smallholder farmers, donors and other development actors have sought to innovate through different models that seek to provide a package of inputs, support, and financing. During the 2021 United Nations Food Systems Summit, the UN issued a warning that the world will not succeed in meeting the Sustainable Development Goal to end global hunger by 2030 if smallholder farmers are not prioritized. Download the full PDF, which includes a Technical Appendix. While these first points have received broad focus in research and application, the last conceptalternative credit systems powered by blockchainis a relatively novel but immensely powerful concept that we are only just beginning to explore. Adoption of adaptation and mitigation measures among smallholder farmers is complex. Similar to One Acre Fund, Babban Gona provides training, financial credit, and improved inputs. Around the world, smallholder farmers are increasingly harnessing technology and other innovations to share best practices, improve yields and, importantly, increase their access to finance . PDF Access to Finance for Smallholder Farmers Climate-smart agriculture in Kenya, CIAT, CGIAR, and The World Bank, October 2015. Government and private-sector actors will also have to consider building market linkages for crops in different areas because farmers might switch crops due to changing land suitability, as described earlier. It is a quarterly rendezvous we would. These challenges make it difficult for farmers to obtain the best price for their crops by creating pressure to sell as soon as they harvest. Tanzania: The African Development Bank provides a USD 2 million partial Why we invested: Crop2Cash is unlocking access to finance for Women do much of the farming in lower-income countries, comprising an average of 43 percent of the agricultural labor force and up to nearly 50 percent in sub-Saharan Africa and East and Southeast Asia. One of the most impactful ways to increase food security around the world is the empowerment of smallholder farmers, who produce about one-third of the worlds food supply. Financial institutions also frequently do not have a physical presence near where smallholder farmers work. Click here, Changing the fortunes of farmers and families in Muranga's County, Kenya, First Global Forum of The United Nations Decade of Family Farming 20192028, Voices from the field: The future of Irelands sustainable farming, Regional Office for Europe and Central Asia, Regional Office for Latin America and the Caribbean, Regional Office for the Near East and North Africa. We chose these countries because they contain more than 40 percent of the global smallholder farmer population, they come from three regions (Africa, Asia, and Latin America) where smallholder farms are dominant, and they have strong data availability. This site uses cookies that are set on your browser to optimize functionality and give you the best possible experience. For mitigation, we based prioritization on two factors: impact and feasibility. The 510 million represents the global number of farms of two hectares or less based on Raffaele Bertini, Sarah K. Lowder, and Mario V. Sanchez, Which farms feed the world and has farmland become more concentrated?, Jos Graziano Da Silva, Feeding the world sustainably,, Ariel Ortiz-Bobea et al., Anthropogenic climate change has slowed global agricultural productivity growth,. We identified more than 30 measures smallholder farmers can adopt to help adapt to and mitigate climate change. Some measures include reducing the overapplication of nitrogen fertilizers (especially in China and India), scaling rotational grazing and rangeland restoration, or optimizing animal feed composition to reduce methane produced from enteric fermentation. The proportion of IFAD-supported projects that include work on market access has increased dramatically over the years - from 3 per cent in 1999 to more than 75 per cent in 2014. H. Trisos et al., Africa, in Climate change 2022, February 27, 2022. For example, in Africa, pest-driven losses are expected to increase by 50 percent (compared to the baseline) for staple crops such as maize, rice, and wheat.6C. These differences are mainly driven by varied exposure to climate change hazards and by the farming systems used in the exposed areas (Table 2). Photo by Pranab K. Aich / Heifer International. However, smallholder farmers do not always have adequate resources at the start of the planting season to buy the required inputs. smallholders in loose value chains and non-commercial We prioritized measures based on Development partners and private actors are also implementing pilots to support adoption of climate-smart measures. Surekha Mohanta, a smallholder farmer in Odisha, India, practices saving in a self-help group formed with Heifer's support. This field is for validation purposes and should be left unchanged. Second, a novel use for a blockchain-powered supply chain is that microfinance institutions and other lenders can look to this network for proof of these claims. Digitalization, innovation-driven solutions and access to finance are essential for the tea sector's sustainability, FAO Director-General says Our analysis highlights two important considerations for this support. They directly impact farmers financial lives by offering mechanisms for savings, credit and insurance that are legal and regulated. Second, driving adoption of these measures will require solutions at the farm and agriculture-system levels. We define agroforestry as land suitable for trees to grow in a range of grass- and crop-based systems and with a tree density of 45 or more trees per hectare. they were implemented, with a specific focus on agricultural This lack of access to finance for smallholder farmers is a manifestation of a system that does not work in their favour. Enhance access to finance and input resources:-Contract farming is one way of accessing to finance and input resources, as buyers often provide farmers with both inputs on credit and technical assistance. The legislation provides vital assistance for programs that support smallholder farmers and effective food systems around the world. Making crops more resilient to drought risk, The food and agriculture sectors transition to net zero: Production reform and demand shifts. Estimates suggest that availability of finance for African farmers could lead to an increase of over 300% of agricultural output, from $280 billion to $880 billion by 2030 ( McKinsey Global Institute, 2010 ). Alternative credit systems powered by BlockchainAs new applications for blockchains arise, the transformative, cross-sectoral power this technology holds becomes ever clearer. Financial services simply do not reach the often-remote areas in which these farmers operate. Access to Finance for Smallholder Farmers. Further, the collection and storage of vital information about good farming practices and certification, offered on chain, enables famers to make provable claims along the supply chain and to consumers, a major selling point in todays economy. Agroforestry alone represents the largest opportunity, with a mitigation opportunity seven times that of the next most impactful measure of incorporating rice straw into soils.14We define agroforestry as land suitable for trees to grow in a range of grass- and crop-based systems and with a tree density of 45 or more trees per hectare. The choice of measures to invest in depends on multiple factors, including a countrys farming system; farmers access to markets, which is an indicator of their ability to access other actors such as sales agents for seed companies that sell new drought-resistant seed varieties; cost of adoption; and capabilities required. Sonja Vermeulen and Eva Wollenberg, A rough estimate of the proportion of global emissions from agriculture due to smallholders, CGIAR, April 2017. They often lack sufficient funds, work with improper infrastructure, or are vulnerable to the whims of supply chains that can favor large-scale farmers. The effects of financial inclusion on agricultural productivity in Written by: Financing is central to smallholders gaining access to these inputs. This site uses cookies to optimize functionality and give you the best possible experience. One of the areas where blockchains hold immense promise is in shattering the constraints of complex, global supply-chains in the agri-food sector. Subscribe to our newsletter to get access to all our knowledge on blockchain technology and its applications in agri-food! Governments and other stakeholders could consider supporting them in their efforts to adopt sustainable farming practices. Nearly all African countries are expected to reach 2 degrees Celsius [~3.6 degrees Fahrenheit] warmer between 2025 and 2040, even though the continent accounts for less than 5 percent of the carbon emissions generated by human activities., Whats more, the Bill & Melinda Gates Foundation reports that over half of sub-Saharan Africas employment and up to 30 percent of its gross domestic product (GDP) relies on agriculture. It will enhance access to quality inputs through a functional, efficient and sustainable fertilizer supply chain in Tanzania and improve access to finance for large fertilizer distributors. Share your availability for an interview with our research team. For example, introducing irrigation to increase productivity has an indirect mitigation effect, allowing farmers to grow more crops on less land and therefore reducing the amount of land needed for agriculture. Moreover, as shown in Exhibit 1, more farmers in India (95 percent of the total) are exposed to at least one risk, and most are exposed to multiple risks, which requires the adoption of multiple adaptation measures. reach and effectiveness. This report assesses access to credit finance by smallholder farmers and cooperatives, and the supply of finance from financial institutions and other sources, and identifies potential modalities for increasing access to finance to enable investments by smallholder dairy farmers and dairy cooperatives. New chocolate initiativesA typical chocolate supply chain involves a number of smallholder farmers in western Africa, a host of in-between traders, state-run and private certification, and quality control and labelling bodiesnot to mention all of the informal economy workers who provide protection and transportation along the way. The launchpad identified two innovations to improve farmer onboarding through data partnerships, these include: Cooperatives and other forms of farmer collectives allow service providers to serve a group of farmers rather than individuals. Bi-monthly updates of best articles, upcoming events and exciting innovations that will make our food better. USAID's collaboration with Corteva builds on the Agency's work under AGRI-Ukraine, which has already provided more than 13,728 Ukrainian farmers with seeds, fertilizers, crop protection, access to finance, and other assistance, in total supporting approximately 29 percent of the country's registered agriculture enterprises. insights into the challenges of agricultural finance. Consequently, this can limit their choices of what, when, and how to grow crops. Its affiliate, Bread for the World Institute, is a 501(c)(3) organization. Providing better resources for these farmers can start with increasing funding opportunities. Finally, extensive piloting would be helpful to test which macrosolutions are most effective in encouraging farmers to adopt priority measures and to develop and derisk sustainable business models to support adoption. We identified several cross-cutting approaches that could help scale priority measures (Table 4). This was determined by calculating the area of farmland where measures could technically be implementedor calculating the number of livestock heads for which measures could be implemented based on the theoretical scale of adoption described aboveand multiplying it by expected GHG reduction potential per hectare or per livestock head based on findings from research trials. AfDB allocates funds to facilitate access to fertilizer for smallholder Neate, Climate-smart agriculture: Success stories from farming communities around the world, CGIAR, November 2013. DFIs can provide on-lending facilities geared toward the unique needs of the agricultural sector. We found that implementing a prioritized set of three measures at scale in each country could mitigate 45 percent of smallholder farmerdriven carbon emissions. While there are broad trends, the sector is very country-by-country when it comes to the actors and financial needs. The lack of financing for climate adaptation is representative of the way countries overlook smallholder farmers overall. Stakeholders have focused on climate-smart agriculture for the past two decades. Blockchain technology can support these declarations, helping to reduce greenwashing and strengthen consumer intelligence and qualify ethical claims. For other crops, greater use of a combination of six tillage, residue management, and intercropping practices in legumericewheat cropping systems in India resulted in the lowest emissions. Yet, most smallholder farmers are also unable to access the financing they need to secure these inputs. The 4-year project (2022-2026) will contribute to increased production and consumption of orange-fleshed sweet potato (OFSP) among smallholder farmers, thus . (See sidebar, About the research, for an explanation of adaptation and mitigation and the methodology under which these measures were derived and prioritized; see the technical appendix for the case studies on which each measure is based.) Pathways to enhancing access to finance for smallholder farmers through This IFC study aims to identify and Smallholder farmers currently face a financing gap of close to US$ 170 billion per year. According to estimates, even promising approaches to expanding smallholder lending, such as value chain finance, are reaching fewer than 10 percent of smallholders, primarily those in well-established value chains dedicated to higher value cash crops. 1. In this article, well explore how smallholder farmers are defined, where they live and work, and what they grow by answering the following questions: A smallholder farmer is someone who depends on their own labor and resources to produce food or other agricultural products. We also noted several approaches that governments, development partners, and the private sector could pursue to help scale those measures. Cocoa, Country: For adaptation, almost every smallholder farmer can adopt at least one on-farm adaptation measure. For example, the cost to adopt and scale these measures is largely unexplored in the currently available literature. They are also key to global food security. Currently, an estimated 828 million people are experiencing hunger around the world 46 million more than the previous year, according to the World Health Organization. The project aims to increase productivity by enabling timely access to and appropriate fertilizer use by smallholder farmers. Nonetheless, smallholder agriculture has been undermined by a plethora of challenges including limited access to improved technologies, finance to support the adoption of new technologies, poor marketing, limited storage capacity, and poor transport infrastructures (Jayne et al., Citation 2010; Kuivanen et al., Citation 2016). The farm bill in particular lends major support to international food aid programs. Mitigation is achieved either by reducing the sources of these gases or by enhancing the storage of themfor example, by increasing the size of forests. A major challenge in global supply chains is that most market power settles at the top of the chain, leaving those at the bottom with less access and control and fewer opportunities for their own growth and development. As a result, one of the largest mitigation opportunities15Paulina Alejandra Pontifes et al., Land use/land cover change and extreme climatic events in the arid and semi-arid ecoregions of Mexico, Atmsfera, August 2018, Volume 31, Number 4. lies in regenerative rangeland management.
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