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.

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. 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. 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. Status
of
climate
finance
for
agriculture
● Green
Climate
Fund
● Multilateral
funds
● Carbon
markets:
regulated
and
voluntary
● NAMAs
● Company
supply
chains
standards
● Philanthropic

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. 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. SACC
finance
options
● Patient
private
capital
with
public
or
philanthropic
support
● NAMAs
● Agriculture/
food
security/adaptation
financing
● SLM
project
with
global
benefits
(GEF)

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. Thank
you
Seth
Shames
EcoAgriculture
Partners
sshames@ecoagriculture.org
www.ecoagriculture.og