Compiling talking points / references / charts we can use for a concept note / one-pager
Small scale producers face significant challenges on the front-lines of climate change.
They are also landscape stewards whose actions can deliver climate benefits including carbon sequestration, efficient water usage, biodiversity preservation while meeting our food security needs.
While farmer groups can empower small scale producers to overcome their diseconomies of scale, they universally struggle with quick access to low-cost capital which inhibits their growth.
Farmer groups know what investments they need to make in order to enhance their climate resilience and deliver value to their farmer members. Digital Green is launching a platform for farmer groups to share their needs and connect with funders who want to support them.
Timely grants can be catalytic and provide groups a much needed boost that accelerates their maturity and sets them on a path to unlock additional opportunities like government subsidy programs and commercial banks / capital markets.
“Our emerging farmer organization approach has three core components
(1) building open source, accessible, farmer-centered tools for farmer groups that help them easily capture and use data with their members informed consent
(2) building the capacity of data officers as trusted stewards of farmer data and capacity builders of their peer members
(3) testing a more direct, but decentralized, investing channel targeting farmers organizations and supporting their climate resilience. This last component is designed to both incentivize greater focus on growing their data assets and commit resources that will tangibly impact their commitment to act collectively.
These three things: a robust data asset, strong farmers organization digital capacity, and growing collective agency could shift the current paradigm. From an agtech ecosystem powered by the extraction and centralization of smallholder data by others to a farmer-driven data ecosystem where the farmer organization becomes a powerful data aggregator and advocate for their members' needs and rights”
https://climatetechvc.substack.com/p/-ipcc-6-running-out-of-time-97?s=w
Takeaway: There is an huge opportunity at the intersection of ecosystem restoration / soil health and carbon
Takeaway: Unmet funding needs for small farmers and agribusinesses: funding needs are huge (eg, “market size”
Source: SAFIN and Convergence Report (March 2021)
A second group of estimates has looked at the unmet demand for finance of smallholder farmers, who are
the majority of farm operators in the world, or small and medium-sized agricultural enterprises (agri-SMEs), which are driving value chain and food market transformation in many parts of Africa and Asia (AGRA, 2019). Such demand includes the need for savings, credit and insurance; in financial terms it can take different forms depending on the intended function (e.g. working capital, capital expenditure (capex), etc.). Mastercard Foundation, RAF Learning Lab and ISF Advisors (2019) estimate an unmet annual need of around US$170 billion for smallholder farmers in South and Southeast Asia, sub-Saharan Africa and Latin America, while Aceli Africa (2020) reports a financing gap of roughly US$65 billion across sub-Saharan Africa for agri-SMEs with financing needs between US$25,000 and US$1.5 million. Such estimates focus on the current demand or absorptive capacity of smallholders or agri-SMEs, rather than the investments required to transform their practices and business models to strengthen their contribution to the SDGs or to adapt to climate change. In the past few months, there have also been some efforts to estimate additional agri-SME financing needs associated with the COVID-19 pandemic (RAF Learning Lab, ISF Advisors and The Feed the Future Initiative, 2020; KfW Agriculture Finance Programme, 2020).
Finally, a third approach at estimating financing needs focuses on the transformational shifts in practices, technologies and business models required by the sustainable development agenda. One major example is a 2019 study by the Food and Land Use Coalition (FOLU), assessing costs, savings and new business opportunities associated with “ten critical transitions” in food and land use (including agriculture). The report estimated between US$300 and US$350 billion of investment needs per year, along with US$5.7 trillion of avoided “hidden costs” by 2030, and an annual business opportunity of US$4.5 trillion also by 2030. The transitions at issue included shifting to regenerative agriculture practices, healthy diets, diversification of protein sources, reducing food losses and waste, and strengthening rural livelihoods, among others. At present, this approach to estimating financing needs plays an important role in framing the role of finance in delivering on the various impact areas of the 2021 United Nations Food System Summit.