Monday, 6 June    13:15 - 15:15    Room: Wolfson Library Room 2

Smallholder finance – evidence from the tropics

Hosts:  CIFOR

Farmers are not a homogenous group. They range from subsidiaries of international corporations cultivating hundreds of thousands of hectares to smallholders seeking to secure a livelihood from two hectares — and everything in between.

As such, interventions to address the negative environmental and social impacts of agricultural expansion cannot take a “one size fits all” approach.

Current interventions that focus on driving change through improving the environmental governance of corporate supply chains tend to segregate supply chains in to “green” and “brown”, and threaten to exclude smallholders unable to comply with sustainability standards requested by processors and buyers.

Financial support is often seen as one of the key elements to upgrade smallholder production systems while making them more sustainable. But in order to avoid exclusion of certain stakeholders and leakage of bad practices, options at scale are required.

For more accessible and affordable credit, several other barriers have to be overcome. This session will seek to answer these questions from a panel of stakeholders with extensive experience in smallholder agriculture and financing.

Key questions addressed:

  1. What interventions are needed to improve sustainability among smallholders? What is the role of finance for removing barriers and supporting interventions?
  1. What interventions are needed to increase (conditional) access to credit that support more sustainable land use and production practices? And how can these be mobilized at a broader scale than pilot projects and boutique funds?
  2. What factors have to be changed to make these interventions scalable (policy, regulation, subsidies/incentives, social and economic systems, etc.)?

Background reading:

  1. How can the financial services sector strengthen the sustainability and inclusivity of smallholder farming in the supply of global commodity crops? (White paper; 2016)
  2. Brazil explores investment in climate smart agriculture (Conservation Finance Network)
  3. Diagnostic study on Indonesian Oil Palm Smallholders. Developing a better understanding of their performance and potential (IFC)
  4. Catalyzing smallholder Agricultural Finance (Dalberg)
  5. Financial literacy and agricultural training for Indonesian oil palm smallholders (Solidaridad Network)
  6. Agricultural intensification by smallholders in the western Brazilian Amazon. From deforestation to sustainable land use (IFPRI)