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Unlocking Finance for Smallholder Farmers in Africa’s Food System

A three-day African Regional Exchange was held recently, bringing together farmers, bankers, governments, and development partners from across Africa and beyond to discuss ways to provide smallholder farmers with the finance they need to improve and scale up the sustainable forest and farm management practices. The event, organized by the Forest and Farm Facility, aimed to share experiences and lessons on how to overcome the challenges of getting finance to smallholder producers living in remote areas and experiencing some of the worst effects of climate change.

The meeting was held in collaboration with various organizations such as the Food and Agriculture Organization of the United Nations (FAO), the International Institute for Environment and Development (IIED), the International Union for Conservation of Nature (IUCN), and AgriCord – in collaboration with CIFOR-ICRAF, the Kenya Forestry Research Institute, and the Kenya Forest Service. It brought together over 200 participants to raise awareness of the different ways in which these groups can access available resources and how banks and governments could better understand the valuable work of small farmers and develop financing systems tailored to their needs.

Smallholder producers, including Forest and Farm Producer Organisations (FFPOs), Indigenous Peoples and Local Communities (IPLCs), women’s organizations, and their enterprises, are often unable to qualify for finance for improving or scaling up the sustainable forest and farm management practices. They end up spending some of their resources on adapting to climate change to protect their livelihoods, leaving nothing to invest in education or other needs. Unlocking finance for smallholder forest and farm producers can help to achieve sustainable development and respond to climate change.

The meeting aimed to treat smallholder farmers as private-sector actors and unlock private-sector investment in farm forestry. On the second day of the meeting, participants had a field trip designed to offer insights into some of the challenges faced and solutions found by smallholder cooperatives in two counties of Kenya.

Globally, smallholder farmers produce a third of the world’s food but receive only 1.7 percent of climate finance, according to a 2022 report from the International Fund for Agricultural Development (IFAD).

The African Regional Exchange builds on discussions at the Exchange of Knowledge on community mechanisms for territorial financing held in Mexico in October 2022, and some delegates from Latin America and Asia shared their knowledge at the African exchange.

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