$151 billion needed annually to close ‘critical’ climate finance gap for smallholder farmers
Based on an investment of $300 per farmer per year, the social enterprise calculates that around $153 billion would be required annually to support the estimated 511 million smallholders worldwide farming less than two hectares of land to build climate resilience. Currently just $2 billion of global climate finance from both public and private sources reaches smallholder farmers, the group claims, revealing a financing gap of $151 billion.
One Acre Fund estimates that filling this gap would yield $403 billion in value for smallholders globally, taking into account higher yields, increased revenue, improvements in soil quality, healthier families, and the long-term economic and ecological benefits of agroforestry.
The organisation has released the figures ahead of the 2024 UN Climate Change Conference (UNFCCC COP29), where climate finance will be a major focus of discussion.
One Acre Fund says the new estimates demonstrate that the $100 billion committed annually by developed countries to finance climate adaptation across all sectors in the Global South falls dramatically short of what’s required to ensure climate resilience.
Two adoption scenarios
Using learnings from One Acre Fund’s delivery of climate solutions to over 4.8 million smallholders across sub-Saharan Africa, and preliminary data from early-stage trials in Rwanda, the organisation calculated the cost per farmer for two adaptation scenarios.
The first, an ‘Essentials’ package of support, looks at the investment needed to provide a farmer with quality inputs, training, trees, and basic insurance as a last-resort safety net. This package offers a base level of adaptation for smallholders, with limited resilience built in. The second looks at what is needed to help smallholders not just cope but thrive, despite intensifying climate impacts. This ‘Thrive’ package incorporates optimised agronomy, market access for climate-smart crops, support to implement regenerative agricultural techniques and intensive agroforestry, and expanded insurance coverage in the event of climate shocks.
In the Essentials package, a global investment of just $47 billion would be required, but the corresponding impact would be just $73 billion compared to the $403 billion of value generated in the Thrive scenario – demonstrating the added impact that comes from greater investment.
“Smallholder farmers are one of the groups most vulnerable to intensifying climate impacts worldwide,” says Michelle Kagari, senior director at One Acre Fund. “Most are reliant on less than two hectares of land, and are working with already degraded soils, making them acutely susceptible to shocks such as storms, floods or drought. These events are capable of wiping out entire harvests, with detrimental implications for the livelihoods of smallholders and their families.”
Working with five million smallholders and their families across sub-Saharan Africa, she claims One Acre Fund is proving that large-scale adoption of climate solutions by smallholder farmers is possible. “We have the tried and tested models. What’s needed is the finance to scale them across the continent, and globally.”
With climate finance high on the agenda at COP29 next week, the group is calling on the global community to close the climate finance gap for smallholder farmers and support them to unlock the “myriad environmental and economic impacts of building climate resilience”.
Why smallholders so impacted by climate change compared to larger agricultural operations
Smallholder farmers around the world are contending with increasingly erratic temperatures and weather patterns with devastating implications for crop yields, soil health and, by extension, livelihoods and wellbeing. In the face of failing harvests and limited income, most smallholders lack the means to build resilience to these climate shocks.
Despite this, One Acre Fund says smallholders have the potential to play a crucial role in addressing the impacts of climate breakdown, employing tools and techniques that will move them towards more sustainable and prosperous livelihoods and contribute to individual and collective resilience in the face of the climate emergency.
