Making Climate Finance Work in Agriculture
This discussion paper was produced as a background documentfor the 2016 FAO State of Food and Agriculture (SOFA) report. It was produced through desk research and analysis of existing agricultural and climate finance literature. Moreover, qualitati...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/06/26530086/making-climate-finance-work-agriculture http://hdl.handle.net/10986/24686 |
| Summary: | This discussion paper was produced as a
background documentfor the 2016 FAO State of Food and
Agriculture (SOFA) report. It was produced through desk
research and analysis of existing agricultural and climate
finance literature. Moreover, qualitative interviews with
key experts representing different stakeholder groups in the
agriculture, climate, and financial sectors were conducted
to inform the potential opportunities and innovations that
should be further explored to make climate finance work for
agriculture. Finally, a collection of supporting case
studies were provided by different stakeholders to showcase
some of the most successful and innovative examples already
being implemented in the climate finance community.It is
important to note that this is a discussion paper that aims
to explore the intersection between climate and agriculture
finance by generating dialogue. Hence, the paper explores a
relatively new field and proposes innovative interventions
that either are being tested or could be tested to increase
the leverage of private capital and strengthen the links
between financial institutions on the one hand and
smallholder farmers and SMEs on the other. The objective of
the paper is to generate discussion around this topic and,
therefore, no blanket recommendations or descriptive
interventions are proposed. A growing population and
changing diets are driving up the demand for food.
Production is struggling to keep up as crop yields level off
in many parts of the world, ocean health declines, and
natural resources— including soils, water and
biodiversity—are stretched dangerously thin. Climate change
is critically interrelated with agriculture. On the one
hand, agriculture is extremely vulnerable to climate change.
This paper proposes three different avenues to use climate
finance to achieve this goal: a) Designing and adapting
innovative mechanisms to leverage additional sources of
capital, from both public and private sources, that can be
directed towards climate smartinvestments in the agriculture
sector. b) Identifying entry points for directing climate
finance into agriculture and for linking FIs to smallholders
and agricultural SMEs, including through capacity building
and technical assistance. c) Providing technical assistance
to increase investments in agriculture.Finally, this paper
presents several suggestions to contribute to the
achievement of the ideas presented in this paper, including
the need for increased knowledge on innovative financial
instruments and mechanisms, bridging information gaps,
identifying opportunities, promoting dialogue and
cooperation, and designing an action plan to move this
agenda forward. |
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