Investing in climate adaptation for smallholder farmers pays big financial returns, says new IFAD report

Marrakech, 9 November 2016 A new report from the UN’s International Fund for Agricultural Development (IFAD) shows that for each dollar invested through its Adaptation for Smallholder Agriculture Programme (ASAP), farmers could earn a return of between US$1.40 and $2.60 over a 20 year period by applying climate change adaptation practices.

The report, The Economics Advantage: Assessing the value of climate change actions in agriculture, was produced as part of a collaboration between IFAD and the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS).

“There is a strong economic case to be made for investing in agriculture for future food security, even under changing climate conditions,” says IFAD’s Director of Environment and Climate,  Margarita Astralaga. “IFAD’s ASAP,  the world’s largest programme for smallholder farmers’ adaptation, shows that where investments are made that help farmers adapt to climate change the returned financial benefit to farmers is much, much higher.”

According to report findings, in all regions where IFAD invests in adaptation, the rate of return for farmers, or even the government agencies that put the projects in to practise, comes in 15 to 35 per cent higher, even when you take in to account the cost of borrowing.

“Agriculture is especially sensitive to climate change, as well as accounting for significant emissions, and is therefore a priority for both adaptation and mitigation,” said CCAFS’s Head of Research, Sonja Vermeulen.  

The Paris Agreement, adopted at COP21 in December 2015, provides a strong platform for action. The majority of Nationally Determined Contributions (NDCs) to the Paris Agreement have actions on agriculture and the report confirms the strong economic rationale for supporting this.

“Climate change proposals on agriculture need to be supported by credible economic and financial proposals in order to unleash significant public and private finance,” adds IFAD’s Margarita Astralaga. “The purpose of this report is to share emerging information to support the use of clear and concise economic data that shows when, where and how IFAD investments bring financial returns to the communities we work with.”

At the farm level, according to the report, positive economic returns can be demonstrated for several practices that build adaptive capacity and reduce emissions intensity such as innovative rice cropping in Vietnam,  or  switching from growing coffee to cocoa in Nicaragua.

Alongside farm-level actions are a further set of non-technical mitigation and adaptation interventions, which are just as important but more difficult to quantify and value, says the report. These include capacity building, institutional strengthening, access to value chains and research. These climate resilient practices also have a demonstrated effect on food security both locally and globally.

Download the report here

Note to editors:

Margarita Astralaga, Director of IFAD’s Environment and Climate Division, and CCAF's Head of Research, Sonja Vermeulen, are available for media interviews.

Press release No.: IFAD/PR/68/2016

IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided about US$18 billion in grants and low-interest loans to projects that have reached some 462 million people. IFAD is an international financial institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub.

For more information visit www.ifad.org