Helping farmers cope with climate change

Helping farmers cope with climate change

Coffee farmers in Peru suffered heavy losses in 2013 when 40% of the country’s coffee plantations were adversely affected by coffee leaf rust. The disease, which scientists blamed on climate change, damaged leaves and slowed coffee cherry growth, resulting in smaller, lower quality yields.

The risks posed by climate change are not limited to coffee. In developing countries, nearly two thirds of the extremely poor earn a living from agriculture. They are on the frontline in the fight against climate change, yet they often lack the finance and knowledge to withstand its effects. This can prove devastating to their livelihoods.

So what can be done to address this poverty imbalance and empower smallholder farmers? This was the question posed at a recent Guardian Sustainable Business seminar, supported by social impact investor Oikocredit and chaired by broadcaster and Guardian journalist Lucy Siegle.

Lebi Hudson, general manager at the Rungwe Smallholders Tea Association in Tanzania, said climate change is already having a direct impact on the association’s 15,000 members. Growers have experienced reduced yields in recent years due to extreme weather, including prolonged droughts.

The impacts extend to the wider community, too, he said, with young people in particular seeing farming as an unattractive prospect and migrating to urban areas. For smallholders, “crisis is a constant way of life”, said Hudson, but climate change presents a more extreme challenge than any previous situation, he added.

What it boils down to is farmers managing risk, said Paul Steele, chief economist at the International Institute for Environment and Development. “The issue is whether climate change is such a huge risk that they can’t recover from it and need outside support from governments and other agencies.”

With insufficient international aid for smallholders, the need for investment is clear, said Steele. And with the UN calling for collective action to end poverty by 2030, the need to support rural communities is increasingly pressing.

But who will provide the funds? Just 16% of traditional banks offer loans to smallholders, according to a report by the Consultative Group to Assist the Poor, a global network seeking to advance financial inclusion. Alternative sources of funding for smallholders include: climate finance (funds for activities that reduce greenhouse gas emissions or help society adapt to climate change); microfinance; or social impact investors that seek a social, environmental and financial return. Some corporate businesses are also helping to provide loans.

However, social impact investors must be wary of climate-related risks, which have a direct knock-on effect on the ongoing viability of lending to smallholders. Rubio said climate change had delivered a “real wake-up call” for Oikocredit, which has seen its coffee portfolio drop by 20% in the past three years.

Urvi Kelkar, livelihoods and economic impact manager at multinational beverage company SABMiller, said her company was also facing immediate challenges as a result of climate change. “Declining yields are a threat to security of supply,” she said, referring to the fact that SABMiller sources many agricultural crops from developing countries.

Despite the challenges, Kelkar said sourcing from smallholders in Africa was a “strategic priority” for SABMiller. The company claims it seeks to build inclusive supply chains, where it sources raw materials from smallholders, with the aim of improving incomes and livelihoods, as well as contributing to the host country’s economic growth.

SABMiller has increased its competitiveness in the Ugandan beer market by developing an affordable lager through its subsidiary, Nile Breweries. Eagle Lager is made from sorghum, a cereal grain sourced from smallholder farmers. Some 20,000 smallholders have earned $15m (£11.5m) from Eagle Lager, which has also generated $70m for the Ugandan government.

Hudson also highlighted the opportunities for smallholders in supplying domestic markets, referring to the World Bank’s Africa Can Help Feed Africa report (pdf), which suggests the continent could generate an additional $20bn annually if African leaders remove cross-border food trade restrictions.

“Smallholders are directly contributing to food security,” he said, explaining that his members have diversified by growing potatoes and bananas, with approximately half of their bananas destined for Dar es Salaam in Tanzania.

However, it would be wrong to “idealise” smallholders, Steele said, with unpredictable yields still a critical issue.

To improve smallholders’ yields, Oikocredit is encouraging production partners to help farmers adopt sustainable farming techniques. For example, Cafédirect, which Oikocredit invests in, is helping 6,600 coffee smallholders plant trees in the Peruvian region of Piura. The initiative contributes to reforestation, which earns the farmers additional income through carbon credits.

In east Africa, a project funded by Cafédirect aims to help empower female farmers, who stand to improve their yields by up to 30% by having access to the same knowledge and inputs as their male counterparts. But, as Hudson pointed out, there are wider cultural barriers that need to be addressed. “In some farming communities, women aren’t allowed to speak in front of men. [Women] have to be able to make decisions, too,” he said.

Partnering with a range of different stakeholders is fundamental to supporting the developing world’s farmers, said Rubio. Oikocredit is working with technology providers such as Technoserve to help farmers monitor crop performance (which is important for gaining sustainability certifications), as well as financial literacy trainers.

Kelkar said partnerships and collaboration have been critical for SABMiller as the company has developed new supply chains with smallholders. Brewing the company’s Impala beer in Mozambique, for example, was done through a local partnership which turned raw cassava into a “cake” that could be transported more easily to its brewery. The operation sources cassava from 1,500 smallholder farmers.

“You have to think holistically,” Kelkar said, emphasising the importance of addressing access to markets, training, appropriate funding and technology, and more accurate weather predictions. SABMiller is working with climate experts to help predict rainfall patterns in production countries and understand water risk, particularly where its factories share water resources with local communities. “We need a broader conversation between science and business,” she said. “It’s not happening quickly enough.”

As climate change continues to threaten the availability and cost of food for the world’s rapidly growing population, the panel agreed that everyone involved in global food production – from scientists and NGOs, to farmers, businesses, governments and funders – will need to take action in order to safeguard smallholders’ prospects and, ultimately, the future of global food security.

This article was originally published on the Guardian Sustainable Business site.