In regions like sub-Saharan Africa and Asia, smallholder farming is the most prevalent profession among families living in poverty, accounting for 1/3 of the global food supply – and up to 80% of all food in developing countries. These populations are also the most at risk from the impacts of climate change. At Opportunity International, we have seen first-hand how climate change threatens not only to erase the hard-earned progress of these communities – but also destabilize local economies, exacerbating risks for farmers and entire agricultural markets.
But with investments focusing overwhelmingly on short-term humanitarian efforts and long-term mitigation projects, investment strategies overlook the resources necessary to equip those most vulnerable to climate change with tools to face the coming storms. Less than 10% of global climate investments are focused on supporting adaptation efforts.
In particular, the need for increased climate adaptation funding is critical for Small Holder Farmers (SHFs), with women facing significant barriers in accessing finance to enhance farm productivity and climate resilience. The Climate Policy Initiative estimates only 0.8% of climate financing went to small-scale farmers and agri-food MSEs in 2023, and Dalberg and IDH Farmfit Intelligence highlight a $170 billion annual financing gap for smallholders – underscoring the crucial role of local financial institutions (FIs) in bridging this divide. However, most external funding has targeted less risky, larger-scale projects.
Despite the scientific community’s growing consensus that regenerative and adaptive practices proving fruitful to combat climate crises, there is still hesitation to buy into these transformations away from traditional techniques due to rising costs and global instability. So how do we address that risk? How can we bring more capital to the table despite the confluence of geopolitical and climate-related crises?
