The report shows a drop in climate finance to $5.53 billion in 2019/2020 from 48.85 billion in 2017/2018, equivalent to 14 percent
Dar es Salaam. The 44 percent decline in climate finance to support small-scale agrifood actors poses a huge challenge to global food security, according to a new report by the ClimateShot Investor Coalition (CLIC).
The move has also subjected small-scale farmers and agribusinesses to the huge challenges of ensuring food security as well as maintaining the pace of climate change mitigation.
Responsible for providing 35 percent of the global food supply, small-scale agriculture continues to face growing climate-related extremes; hence, climate-proofing of its systems is critical to addressing the notable challenges.
The report shows a drop in climate finance to $5.53 billion in 2019/20 from $9.85 billion in 2017/18, which is equivalent to 44 percent, placing small-scale growers and agribusinesses at even greater risk despite the high vulnerability they have to climate change.
“This is especially true in the developing economies of East Asia and the Pacific, South Asia, and Sub-Saharan Africa,” reads the report in part.
“This must change, given the vital roles of small-scale farmers and agrifood businesses, who channel 65 percent of food into developing economies,” the report says.
Dubbed “The Climate Finance Gap for Small-Scale Agrifood Systems Report,” the report, released on November 22, 2023, is the second-ever tracking exercise of climate finance for small-scale agrifood systems globally, analysing annual flows averaged across the years 2019 and 20.
The decline in climate financing also risks missing an important opportunity to make simultaneous progress on climate mitigation and adaptation by enabling the said farmers to move to more sustainable and resilient practices, given the fact that they manage over 30 percent of agricultural land in their respective regions.
CLIC programme lead and report co-author Daniela Chiriac said: “It is deeply troubling that climate finance to those supporting the bulk of the world’s agricultural value chains has fallen.”
“Small-scale farmers and agribusinesses that serve them are pillars of global food security and their countries’ economies. Yet, they are also among the most vulnerable to the effects of climate change,” she added.
She said too little is being done to ensure a just climate transition for agrifood systems and to protect the world’s food supplies.
The climate transition for small-scale food producers is increasingly critical, as they are projected to surpass 500 million in number globally by 2030 and are often among the world’s poorest communities.
Support can include promoting sustainable land management, enhancing irrigation access, diversifying agricultural production and livelihoods, and facilitating market integration through infrastructure development.
However, informal markets, fragmented supply chains, and a lack of clear land ownership can make finance hard to reach.
The recent decline in climate finance to support them contrasts a general rise in climate flows across other sectors, including energy and transport, but parallels a 20 percent decrease for the agriculture, forestry, and other land use (AFOLU) sectors in the same period.
Speaking to The Citizen, CRDB Bank Plc head of policy advisory and climate finance, Kenneth Kasigila, said a decrease in funding will reduce citizens’ benefits, such as engagement in smart agriculture and a decline in people using climate change mitigation technologies.
Others are a decrease in capacity-building beneficiaries in climate change issues as well as an inability to formulate and implement effective and efficient policies such as the Crop Insurance Policy.
“Despite the enactment of the policy, insurance uptake remains relatively low in Tanzania due to a lack of people’s understanding. Public awareness is vital in providing enough education and introducing incentives that will enable insurance companies to come up with their products,” he said.
“The unpredictable nature of weather has made most companies unwilling to come up with insurance products. Therefore, the decline in climate finance further reduces the possibility of having alternative methods as well as the introduction of climate change-resistant varieties,” he added.
The country’s ability to finance access to clean energy and recycling of sewage water remains limited, according to him.
Mr Kasigila said that being a member of the United Nations Framework Convention on Climate Change (UNFCCC), Tanzania has set a $16.2 billion budget for climate mitigation measures between 2021 and 2030.
He said the country cannot mobilise the said budget alone, noting that Tanzania has welcomed members of international organisations and the private sector to supplement its budget for climate action.
“CRDB Bank has come up with the Green Bond, which, despite providing people with investment interest, mobilised resources will principally play an important role in climate change mitigation measures, hence supporting government efforts,” he said.
He said Green Bond focuses on mobilising investment for green buildings, clean transportation, promoting renewable energy, strengthening Water Sanitation and Hygiene (Wash), and alternative cooking energy, among several others.
Agriculture stakeholder Audax Rukonge said climate change was a multi-sectoral and multi-institutional challenge, requiring a significant change in the country’s budget framework.
It should aim at preventing utilisation of available resources for payment of salaries and provision of technical assistance, instead they should benefit small scale agrofood producers.
He said the decline in climate finance could be significantly caused by a diversion of interest among global funders away from fighting climate change.
“Key ministries, such as the Ministry of Agriculture, should allocate a certain percent of their budgets for climate mitigation. Efforts should be made to ensure the fund is not tempered, but rather delivered to producers.
“Climate change should be an ongoing agenda that should be given top priority, like what used to be for HIV/Aids. Ministries, institutions, departments, and government agencies addressed issues of the killer disease through what was taken as a nationwide campaign,” he said.
Mr Rukonge suggested that the Vice President Office (VPO), Livestock and Fisheries, President’s Office Rural Administration and Local Government (PO-RALG), Ministry of Water, Natural Resources, and Tourism, Ministry of Agriculture, and Ministry of Transport should collaborate in intensifying the war against climate change.
“A certain percentage could be deducted from air passengers for climate mitigation as they adversely contribute to environmental pollution from every kilometre of travel. This could be introduced in domestic travel without necessarily increasing transport fares,” he suggested.
He said depending on the size of land purchased for investment, a reasonable amount could be charged for addressing climate change challenges without necessarily imposing additional charges.
“This could be extended to the export of raw crops in order to discourage the shipment of unprocessed products, a move that will also promote domestic processing of agricultural products,” he said, encouraging decision-makers to seriously tackle peculiar things.
The principal economist at the Ministry of Finance, Dr Aloyce Masanja, said drought, floods, pests, and disease outbreaks affecting crops and livestock were some notable impacts of climate change.
“Reduced climate change finance will adversely reduce crop yields and the prosperity of livestock keeping, which are important components of food security worldwide,” he said.
He said since the shrinking of climate funding will affect food production among growers in the developing world, Tanzania should execute implementable programmes and empower the Tanzania Meteorological Agency (TMA) through the provision of human resources and technology to improve forecast accuracy.
“Tree planting strategy should be adopted and strengthen the nationwide campaign. The private sector should participate in the mission through alternative financing under the public-private partnership (PPP),” he said.
The move will enable the government to concentrate on the provision of social services to citizens, such as the construction of roads and strengthening the provision of education and health services, among others.
