The report sees an important component of changing the agricultural climate

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Small-scale farmers and agricultural enterprises in Sub-Saharan Africa and South-East Asia are facing a billion-dollar black market for climate change, a report said.

Overall, there is a share of US $ 106 billion in investment in small and medium-sized enterprises (agri-SMEs) from farmers, rice mills and agricultural information services, respectively. with reference.

“Not only is there a gap in the basic financial needs for agri-SMEs in these areas, but there is also a large part in the need to reduce the risk of climate change, without having the money to go. measuring these benefits, ”the author said. Jérôme van Innis, senior executive at the South Africa strategic and financial advisors group ISF Advisors, who co -authored the report with the Commercial Agriculture for Smallholders and Agribusiness (CASA) program, who sponsored this article and related to CABI, the parent company of SciDev. Upena.

According to the report, small businesses operating on the farm need money not only to finance their day -to -day operations, but also to finance and adapt to changes brought about by global warming.

Explaining the key factors for investors and policy makers to support the sector, the report calls for a rapid acceleration in climate change funding for agri-SMEs. However, implementing this will require a system of metrics to identify the right opportunities for investment, as well as government policies that support a pipeline of agri-SME innovation.

Investment in agriculture is an important tool to reduce poverty, according to Oxfam’s global charity, while improving food security and the economy.

But without a system that can realize effective regulatory outcomes, investors will struggle to support small farmers to grow their businesses, experts say.

No money

In this overall picture, the report shows that “significant cash flows for agri-SMEs are not related to the perceived effects of the climate crisis”.

Globally, only 1.7 percent of the world’s budget, and about US $ 10 billion, goes to smallholder agriculture, according to a review and advisory group Climate Policy Initiative. More than 95 percent of it was donated from a variety of sources and was largely chosen to promote climate change, rather than climate change.

“Some things need to be done to effectively integrate products and services to help these SMEs reduce and adapt to climate change from the highest levels to local investors,” he said. and Van Innis.

To address this aspect of the financial sector, the report calls for new infrastructure systems to be established over the next three to five years to increase the income received by agri-SMEs for investments. about the weather.

Among these is the development of standard practices to address climate change and mitigation in agri-SMEs. Without this, says Van Innis, investors are in trouble with ‘greenwashing’, or trying to pivot the currency of the sky without knowing how to do so.

“If we’re not about precise metrics, what are we looking for?” he asked. “It’s a little bit of a link and looking at change and the consequences of reduction if all the actors don’t talk together.”

Measurements for conversion

A set of commonly accepted metrics, or metrics, can provide this clarity for climate change currency. “Metrics give you insight into what you get from operations, which can be used to build value for money,” said Ken Chomitz, chief economist at the Global Innovation Fund (GIF), a nonprofit fund established in the United Kingdom. .

Unlike mitigation, for which specifics can be measured, such as a reduction in carbon dioxide emissions, change has not achieved a global goal. This is largely due to the very specific nature of the change – it cannot be done in one place or another.

For example, take a novelty about growing maile seeds in dry areas. The program can use dry methods, irrigation, or soil management, and keep one metric of the crop from the low rainy years, the report said.

“This may be useful for learning the best option to solve a problem, but will it also strengthen the resilience of the smallholder farmer?” said Chomitz.

“The metric we think is focusing on the types of poverty that are resistant to climate change and how good we are at protecting people from earthquakes that send them into a state of emergency. poor trap. “

Progress on an approved conversion metric will take a long time. “Traditional management systems take years to figure out, but we’re moving in the right direction,” Chomitz said.

Making a pipe

While the metrics can help drive adaptation for agri-SMEs, governments need to play, said Maria Tapia, project leader for adaptation at the Global Center on Adaptation.

It advocates the creation of a stable regulatory environment, with tax and funding incentives, or low funding for innovation.

“The government needs to effectively implement the climate with policies on a transformation plan and investment strategy, and is the first to establish a… regional program,” he said. “By first putting its own money into that initiative, and then calling on the world to come together to raise money, governments can pull off private sector.”

In this way, governments create a pipeline of agri -SME innovations that can be pooled – integrated into a single project – and scaled up. “These projects are too small to attract large investors. With land funds, they can be re -secured and sold to private investors in a more efficient way,” he said. his.

This joint concept of agri-SME finance is where Van Innis believes the show can resonate among a wide range of investors.

“Let’s be new,” he said. “Develop a common language and pipeline of investment opportunities and validate these models with specific performance indicators so that we can say yes, our funding is helping SMEs that are having an impact by change and reduce climate change. ‘”

UN Update: Strengthen climate change mitigation, or stand up to major unrest

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Directions: The report on the key asset for climate change (2022, April 1) is available on April 1, 2022 from massive-investment-gap-farm-climate.html

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