Why the decline in climate finance threatens global food systems

by MMC
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Dar es Salaam. The 44 percent drop in climate finance to support small agribusiness players poses a huge challenge to global food security, according to a new report from the ClimateShot Investor Coalition (CLIC).

The move also subjected small farmers and agribusinesses to the enormous challenges of ensuring food security as well as maintaining the pace of climate change mitigation.

Responsible for providing 35 percent of the world’s food supply, small-scale agriculture continues to face increasing climate-related extremes; therefore, climate protection of its systems is essential to address 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 equates to 44 percent, putting small producers and agribusinesses at risk even greater despite their great vulnerability to climate change. .

“This is particularly true in the developing economies of East Asia and the Pacific, South Asia, and sub-Saharan Africa,” the report reads in part.

“This must change, given the vital role of small farmers and agribusinesses, which transport 65 percent of food to 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 exercise tracking climate finance for small-scale agrifood systems globally, analyzing annual flows averaged over the years. 2019 and 20.

The decline in climate finance also risks missing an important opportunity to make simultaneous progress on climate change mitigation and adaptation by enabling farmers to adopt more sustainable and resilient practices, given that they manage more than 30 percent of agricultural land in their respective regions. .

Daniela Chiriac, CLIC program manager and co-author of the report, said: “It is deeply troubling that climate finance for those who support the bulk of global agricultural value chains has declined. »

“Small farmers and the agribusinesses that serve them are the 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 was being done to ensure a just climate transition for agri-food systems and to protect global food supplies.

The climate transition for small-scale food producers is increasingly crucial, as their numbers are expected to exceed 500 million worldwide by 2030 and they are often among the world’s poorest communities.

Support may include promoting sustainable land management, improving access to irrigation, diversifying agricultural production and livelihoods, and facilitating market integration through development. infrastructures.

However, informal markets, fragmented supply chains and lack of clear land ownership can make access to finance difficult.

The recent decline in climate finance to support them contrasts with a general increase in climate flows in other sectors, notably energy and transport, but parallels a 20% decrease for the agriculture, forestry and other land uses (AFOLU) during the same period.

Speaking to The Citizen, Kenneth Kasigila, head of policy advisory and climate finance at CRDB Bank Plc, said a decrease in funding would reduce benefits for citizens, such as engagement in smart agriculture and reduced of the number of people using climate change mitigation technologies.

Others are a decline in the number of beneficiaries of capacity building on climate change issues as well as a failure to formulate and implement effective and efficient policies such as the crop insurance policy.

“Despite the promulgation of this policy, the uptake of insurance remains relatively low in Tanzania due to a lack of understanding on the part of the population. Public awareness is essential to provide sufficient education and introduce incentives that will allow insurance companies to offer their products,” he said.

“The unpredictable nature of weather conditions has deterred most companies from offering insurance products. Therefore, the decline in climate finance further reduces the possibility of having alternative methods as well as the introduction of varieties resistant to climate change,” he added.

The country’s capacity to finance access to clean energy and wastewater recycling remains limited, he said.

Mr Kasigila said as a member of the United Nations Framework Convention on Climate Change (UNFCCC), Tanzania has set a budget of $16.2 billion for climate mitigation measures between 2021 and 2030.

He said the country could not mobilize the said budget on its own, noting that Tanzania had hosted members of international organizations and the private sector to supplement its budget for climate action.

“CRDB Bank has developed the green bonds which, although attracting investor interest, the resources mobilized will mainly play an important role in climate change mitigation measures, thereby supporting the government’s efforts,” did he declare.

He said Green Bond focuses on mobilizing investments for green buildings, clean transport, promoting renewable energy, strengthening water, sanitation and hygiene (Wash) and alternative energies for cooking, among others.

Agricultural actor Audax Rukonge said climate change was a multi-sectoral and multi-institutional challenge, requiring a significant change in the country’s fiscal framework.

It should aim to prevent the use of available resources for the payment of salaries and the provision of technical assistance, but rather to benefit small agri-food producers.

He said the decline in climate finance could be caused to a large extent by a shift in focus among global funders from the fight against climate change.

“Key ministries, such as the Ministry of Agriculture, should allocate a certain percentage of their budget to climate change mitigation. Efforts should be made to ensure that the fund is not tempered, but rather paid to producers.

“Climate change should be an ongoing agenda that should be given top priority, as HIV/AIDS once was. Government ministries, institutions, departments and agencies have been addressing issues related to this deadly disease through what has been deemed a national campaign,” he said.

Mr. Rukonge suggested that the Vice President’s Office (VPO), Livestock and Fisheries, President’s Office for Rural Administration and Local Government (PO-RALG), Ministry of Water, Natural Resources and Tourism, the Department of Agriculture and the Department of Transportation are working together to step up the war against climate change.

“A certain percentage could be deducted from air passengers for climate change mitigation, as they contribute negatively to environmental pollution with every kilometer traveled. This could be introduced in domestic travel without necessarily increasing transport fares,” he suggested.

He said depending on the size of the land purchased for investment purposes, a reasonable amount could be charged to address climate change challenges without necessarily imposing additional costs.

“This could be extended to the export of raw agricultural products to discourage the shipment of unprocessed products, a measure that would also promote domestic processing of agricultural products,” he said, encouraging policymakers to seriously address specific issues.

Senior economist at the Ministry of Finance, Dr Aloyce Masanja, said drought, floods, pests and epidemics affecting crops and livestock were some of the notable impacts of climate change.

“Reducing climate change finance will negatively reduce agricultural yields and livestock prosperity, which are important elements of global food security,” he said.

He said that since the decrease in climate finance will affect the food production of farmers in developing countries, Tanzania should execute feasible programs and empower the Tanzania Meteorological Agency (TMA) by providing human resources and technology to improve forecast accuracy.

“A tree planting strategy should be adopted and strengthen the national campaign. The private sector should participate in the mission through alternative financing under the Public-Private Partnership (PPP) framework,” he said.

The move will allow the government to focus on providing social services to citizens, such as building roads and strengthening the provision of education and health services, among others.

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