Increase smallholder finance to avert catastrophe — IFAD president

Kanayo Nwanze, president of the International Fund for Agricultural Development. Photo by: Food and Agriculture Organization

Dec. 1 was agriculture day at the Paris climate change conference and after the glitz and glamor of the first day — attended by some 151 heads of state and government — it also marked the launch of formal negotiations on a climate deal.

Kanayo Nwanze, president of the International Fund for Agricultural Development, got straight to the point: “There’s not enough finance to help small farmers adapt to climate change.” he said. “We will have to accept the consequences of that: More droughts, more floods, more deforestation.”

Talking to Devex on the sidelines of the COP21 negotiations at Le Bourget conference center, Nwanze did not attempt to conceal his disappointment at the situation small farmer agriculture finds itself in. It has not, he said, been given the emphasis it deserves in the climate change discourse and whether it is recognized and given prominence in the coming weeks remains to be seen.

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In an exclusive interview, the IFAD president shared his views on the possible outcomes of the COP21 negotiations, what strategies would make a tangible difference in supporting small farmers’ capacity to adapt to climate change, and how the fund he is heading is mainstreaming climate change into its operations.

Here are some highlights from our conversation:

As formal negotiations begin, could you share your opinion on what we can expect?

I think everyone has been hoping that this will be a major watershed in negotiations that have been going now for 25 years, and that we will at least reach an agreement to actually cut emission activities and to keep a temperature rise under 2 degrees Celsius. That is to say a binding agreement. ...

It seems that from recent information and preliminary discussions, countries will make voluntary pledges on reducing emissions. I doubt that [U.S. President Barack Obama] for example, would take the risk of accepting or announcing a binding agreement, which will require going to Congress … he would not get a clear consensus.

The best I would expect is a voluntary commitment, that I think is done already — the same applies to China. This is unfortunate, because I believe that the proportion of the population today that has accepted that climate change is real is [bigger] than it was in Copenhagen. We have evolved to a greater consciousness of the implications.

The other expectation we had at IFAD was that agriculture would be a prominent part of the discussion.

Do you believe there isn’t enough emphasis on the role of agriculture in these discussions?

Exactly — no. This is basically the point, which is rather unfortunate. This is evidence-based information: Of our human population, the most affected are going to be poor people in rural areas of the developing world, particularly South Asia and sub-Saharan Africa. It’s a dichotomy, it’s a paradox when the very people who produce most of the food that is consumed in the developing world are small producers. For them agriculture is livelihood. If we do not help them adapt to the impact of climate change, obviously we have to accept the consequences of that: more droughts, more floods, more deforestation. ...

From my experience of almost 40 years, we know that $1, properly invested in a rural household, can have tremendous impacts on livelihoods. What we are calling for is not much: that their voices be heard, because they will be the most impacted by climate change.

How should climate finance be invested? What does “properly invested” mean?

It is not a question of it being used properly; there is not enough of it going into [this issue]. Today IFAD has the only global program that addresses exclusively smallholder adaptation to climate change, the ASAP — Adaptation for Smallholder Agriculture Program.

First, it improves access to better drought tolerant crops, better information sharing on climate risks, financial risks, better information on water patterns ... We are looking at a minimum of 2 billion people whose lives depend on agriculture and who are feeding a minimum population of 3 billion globally. That is not a small proportion of our human population, is it?

Secondly, it provides access to financial services so they can buy improved seeds [and] enable women to have access to land and land rights ... When we talk about agriculture —  at least sub-Saharan Africa — we are talking about women in agriculture, and we know that when you invest in a rural woman, you invest in a community. When she becomes economically empowered, her primary preoccupation is children’s feeding, education, health … When you invest in a rural man, invariably you are investing in an individual. ...

Thirdly, there is the policy dimension: support to governments to develop the right policies, address agriculture, particularly climate-smart agriculture, and strengthen national institutions …  No matter how much investment you put into a country, if you don’t have a strong institutions it doesn’t have an impact …

The needs are great, the resource scarce; you seem to be quite skeptical that the commitments will be translated into real disbursements? Do you envision any public finance alternatives to mobilize resources?

The first point is that the international community has been talking for the last 25 years. We’ve been having conferences, we‘ve been making declarations and we’ve seen very little action. What we are asking for today is real action, decisions that are actionable.

Secondly, developing governments have the responsibility to provide domestic financing, not only for agriculture, but to invest in people. Why do I say that? Any of these countries, and I can speak for sub-Saharan Africa, have so much wealth in terms of the extractive industry, oil, gas, minerals, diamonds … They have poor tax regimens, poor collection and distribution of taxes, and of course, illicit financial flows. If we can get our act together, we can finance our own development.

The other point — which is, I believe, still unfortunate — is the need for a better public understanding, acceptance and prioritization of climate change in the developing world.

What’s the role of a financial institution like IFAD in overcoming this challenge?

Investing in people; investing in rural people. With ASAP, we were able to convince our members, in the last replenishment cycle that climate-smart agriculture was the number one priority for IFAD. The generous contributions of our members have been able to provide over $360 million for the implementation of climate-smart agriculture. We now have 25 countries benefiting from this, by 2018 another 13 countries, I believe. We will mainstream climate change into all our programs, from planning to design and implementation.

There are some controversies around the label “climate-smart” agriculture. What does this term mean to you?

There are three elements:

First, simple existing technologies that address farmers’ ability to adapt to man-made and natural disasters, production systems that respond to activities that the reduce emission of carbon dioxide such as conservation agriculture, natural resource management, management of watersheds, and of course livestock ...

Secondly, it involves developing the right policies that address these issues by governments.

Thirdly, it involves simple natural resource management activities that manage natural resources in such a way that we conserve them and help to reduce the increase of  sequestration of carbon dioxide in the soil.

People have to be aware of that; they have to be educated about the benefits. Climate-smart agriculture is agriculture that takes into account and recognizes the importance of enhancing activities that reduce the increased production of carbon dioxide.

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About the author

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    Elena L. Pasquini

    Elena Pasquini covers the development work of the European Union as well as various U.N. food and agricultural agencies for Devex News. Based in Rome, she also reports on Italy's aid reforms and attends the European Development Days and other events across Europe. She has interviewed top international development officials, including European Commissioner for Development Andris Piebalgs. Elena has contributed to Italian and international magazines, newspapers and news portals since 1995.