Learning Event No 2, Session 1 from Agriculture and Rural Development Day (ARDD) 2011

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Seth Shames, EcoAgriculture Partners. Learning Event number 2, Session 1 in Room A. What are the financing possibilities for CSA in Africa and what role might there be for carbon finance.

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Learning Event No 2, Session 1 from Agriculture and Rural Development Day (ARDD) 2011

  1. 1. What  are  the  financing  possibilities   for  CSA  in  Africa  and  what  role  might   there  be  for  carbon  finance?  Seth  Shames  EcoAgriculture  Partners    December  3,  2011  Agriculture  and  Rural  Development  Day    Durban,  South  Africa    
  2. 2. Overview    1)  The  climate-­‐smart  agriculture  finance  disconnect    2)  Status  of  Climate  and  Agricultural  Finance    3)  Constraints  of  the  current  finance  structure          4)    Options  for  Sustainable  Agriculture  in  a  Changing   Climate  (SACC)  project  in  western  Kenya    5)  Steps  towards  finance  integration      
  3. 3. The  CSA  finance  disconnect       ●  Funds  for  agricultural,  food  security,  mitigation  and  adaptation  generally  come   from  different  sources  though  these  goals  are  inextricably  linked  in  agricultural   systems       ●  SACC  project  designed  for  voluntary  carbon  market     ●  Project’s  primary  objective  is  livelihood  development  and  resilience  to  climate   change  for  farmers   ●  Given  the  current  low  price  of  carbon,  relatively  low-­‐sequestration  potential,   costs  of  project  implementation  and  the  length  of  time  required  for  credit   development,  carbon  revenues  are  far  less  than  the  full  costs  of  the  project  
  4. 4. Status  of  climate  finance  for  agriculture  ● Green  Climate  Fund  ● Multilateral  funds  ● Carbon  markets:  regulated  and  voluntary  ● NAMAs  ● Company  supply  chains  standards  ● Philanthropic  
  5. 5. Status  of  agricultural  finance   •  US  $210  billion/year  needs  annually  to  maintain  and  expand   capital  stock  across  the  ag  value  chain   •  Most,  especially  for  smallholders,  will  be  provided  by  domestic   sources  (public  and  private)   •  US$  33  billion/year  in  public  ag  investment  in  developing   countries   •  US$  7.2    billion/year  in  ODA   •  Private  financial  sector  investment  in  farmland  and  agricultural   infrastructure:  US$10  to  25  billion     •  FDI  for  the  entire  agriculture  value  chain:  US$40  billion/year  
  6. 6. Constraints  of  the  current  finance  structure   ● Modest  scale  of  climate  finance  relative  to  overall   agricultural  finance   ● Separation  of  adaptation  and  mitigation  funding   ● Lost  synergies  across  landscapes   ● Limitations  of  carbon  offset  credit  markets  for   farmers  and  community  land  users   ● Sectoral  silos  in  national  public  investment  (the   case  of  Kenya)  
  7. 7. SACC  finance  options   ● Patient  private  capital  with  public  or  philanthropic   support     ● NAMAs     ● Agriculture/  food  security/adaptation  financing     ● SLM  project  with  global  benefits  (GEF)        
  8. 8. Steps  towards  climate  and  agriculture  finance  integration     ●  Use  climate  funds  strategically  to  influence  the  trajectory  of     agricultural  investments   ●  Structure  climate  finance  to  support  agricultural  institutions  that  can   deliver  production,  livelihood  and  ecosystem  benefits.   ●  Open  financing  windows  specifically  for  multi-­‐objective  climate-­‐smart   agriculture  and  agricultural  landscape  projects  and  programs   ●  Develop  efficient  monitoring  systems  to  capture  the  multiple  impacts   of  climate-­‐smart  agriculture  
  9. 9. Thank  you  Seth  Shames  EcoAgriculture  Partners  sshames@ecoagriculture.org  www.ecoagriculture.og    

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