Economic benefits of investing in adaptation and agriculture

Farmers' Day at COP22 Marrakech saw IFAD and CGIAR's research programme on Climate Change, Agriculture and Food Security (CCAFS) host a side event on the “Economic advantage of agriculture in Intended Nationally Determined Contributions (INDCs)” to complement the release of a new IFAD funded publication “The Economic Advantage”.

Laurie Goering from the Thomson-Reuters Foundation asked how do you show donors, who have a lot of people knocking on their doors for funding, that what you are doing is actually going to work and is it worthwhile?

We are seeing lots of new research which says putting money into agriculture is worth it and IFAD commissioned The Economic Advantage report to prove just that. It found that farmers could earn a return of between US$1.40 and $2.60 for each dollar invested over a 20-year period by applying climate change adaptation practices.

Sonja Vermeulen from CCAFS explained that agriculture has taken ages to get on the negotiating table.

"Almost every country now includes agriculture in their NDCs,” Vermeulen said. “This gives us a whole new platform for action.”

"So far the information is patchy and this report is not the definitive answer," according to Vermeulen. "But it does contain a lot of guiding information which will help development agencies and governments if they implement it into their own work."

Linking agriculture and climate change to a monetary value is extremely difficult. For example, El Niño hit the wine industry in South America, but in New Zealand it actually benefitted it.

“Agriculture is the life of the Ugandan people, hence its prioritisation,” said Chebet Maikut, Commissioner of the Climate Change Department of the Ugandan ministry of Water and Environment. He explained that in Uganda in the next five years US$476 million will be spent on climate smart agriculture.

From a climate change perspective, agriculture has a number of co-benefits in contributing to emission reductions. The Ugandan government found that the cost of not addressing climate change impacts would be in the region of US$406 million by 2025, and if still no action was taken that number would rise exponentially into the billions over the coming years.

“As such 30 per cent of our budget in the next 15 years will be mobilised to fight this,” concluded Maikut.

Alongside farm-level actions are a further set of non-technical mitigation and adaptation interventions, which are just as important but more difficult to quantify and value, says the report. These include capacity building, institutional strengthening, access to value chains and research. These climate resilient practices also have a demonstrated effect on food security both locally and globally.

IFAD's Ilaria Firmian discussed IFAD’s Adaptation for Smallholder Agriculture Programme (ASAP) which currently has over 40 projects. She talked about how IFAD embeds indicators into the project monitoring and evaluation system. Depending on the type of interve

ntion, they can track certain outcomes more specifically. For instance, they may monitor outcomes of farm income.

“We can identify real opportunities with real payback, which a few years ago couldn’t have happened!” continued Firmian.

“It is very tricky to put a value on certain adaptation techniques, such as investing in a women’s groups or cooperatives. However, this study shows that these investments are still very important though," added Firmian.

IFAD is committed to working with farmer’s organisations - when cooperatives become successful, a whole country can be transformed.

At the farm level, positive economic returns can be demonstrated for several practices that build adaptive capacity and reduce emissions intensity such as innovative rice cropping in Vietnam, or switching from growing coffee to cocoa in Nicaragua.

Laurie Goring closed the session saying, “I think we have to keep in mind when discussing this, the cost of not investing. The numbers are so much higher; it has to contribute to the case for making this happen.”