FinDev Interview

Climate Change: The Impact and Challenges for Global Agricultural Markets

Shaun Ferris discusses the impacts of climate change on rural and agricultural markets globally
Woman working with plants. Photo by Yifei Liu, 2014 CGAP Photo Contest.

From increased droughts to higher temperatures, erratic rainfall and rising sea levels, climate change is one of the biggest threats to smallholder farmers around the world. How climate change is affecting rural and agricultural market development globally will be the focus of the upcoming Cracking the Nut 2015 conference which will take place in Lusaka, Zambia on 2-3 March, 2015. In advance of the event, conference organizer, Connexus, spoke with Shaun Ferris, Director of Agriculture and Livelihoods at Catholic Relief Services.

Global climate change is an issue that affects rural and agricultural markets around the world, yet the biggest impacts will be on developing countries. Working globally, what has CRS experienced as the biggest challenges in developing agricultural markets amid climate change?

CRS is working with smallholders around the world who are grappling with a range of different challenges in regard to both market engagement and the effects of increasingly volatile and severe weather. These weather events are increasing the risks for smallholder farmers, not only in terms of their food security, but also in terms of their ability to invest in technologies that will provide greater returns to their farming systems.

For many millions of smallholder farmers seasonal weather is changing and in some cases, short, second season production opportunities are now so unpredictable that farmers have stopped farming in these periods. At the same time, as populations grow and farm sizes are reduced, farmers are no longer able to fallow their land, which is leading to an increase in the intensification of farming systems. This has benefits in situations where farmers can afford to invest in the fertility of their land, but continued farming with limited investment is leading to declining soil fertility and an overall lack of sustainability.

Infrastructure plays an important role in market development and expansion. How can improving a country’s rural and agricultural infrastructure help strengthen markets while also protecting a country’s natural resources and environment?

Priority investments in infrastructure to support market linkages include roads, ports, physical markets, cold chain, storage facilities and more recently, telecoms. These elements enable farmers to access inputs, store and bring their surplus goods to market. More recently telecoms have significantly raised farmer access to information which strengthens improved market information and links to buyers.

Whilst support to infrastructure can improve market linkages, this alone will not help build sustainability and increase the ability of farmers to adapt to climate change. That requires investments in innovation through extension and physical factors that improve water management.

It is estimated that climate change, if left unaddressed, will reduce the growth in global food production by an estimated two percent per decade for the rest of this century, but at the same time, the world population continues to increase at a rapid rate. How can farmers increase production to meet demand while at the same time reduce the risk of environmental damage?

The combination of approaches being used by farmers to improve their productivity and commercial aspirations, amid the challenge of climate change, falls under the umbrella of developing climate-smart agriculture (CSA). According to FAO, CSA is an integrative approach to address the interlinked challenges of food security and climate change that includes three objectives:

  • Sustainably increasing agricultural productivity, to support equitable increases in farm incomes, food security and development;
  • Adapting and building resilience of agricultural and food security systems to climate change at multiple levels; and
  • Reducing greenhouse gas emissions from agriculture (including crops, livestock and ­fisheries).

Farmers are working with researchers, extension officers, their communities and commercial partners to take on these new practices to build their resilience to more severe weather events and also to maintain the productivity of their farms as seasons change and commercial requirements become more intense.

In your opinion, to what extent is climate change going to increase risks associated with agricultural markets, investments, and finance and how can these risks be mitigated?

All forms of farming are high risk business ventures and climate change may become the most significant factor increasing the level of risk. This risk further increases as farmers invest more in their farming systems, which is a requirement in more intensive and commercial farming systems. More volatile climatic conditions will increase the probability of severe weather events that lead to reduced harvests and increased levels of severe production losses. 

At the investment level, financial institutions are already making decisions on where they will provide loans, based on water availability and rainfall distribution patterns. Farmers who seek finance will need to show potential lenders what measures they are taking to improve their water-use approach and plans for diversification to offset the effects of severe weather events. The recent piloting of insurance for smallholder farmers is another critical element in the arsenal of options to reduce the risks to farmers. Scaling out these pilot programs and types of financial options, in addition to finding new means of financing smallholder, rain-fed agriculture, are essential for the long term success of the sector.  

CRS is a sponsor of the upcoming Cracking the Nut conference which will highlight innovations and best practices in expanding rural and agricultural markets amid climate change. What does CRS hope to get out of the conference?

The theme of the conference is very relevant to the work CRS is doing around the globe, including the scaling up of our Signature Program Area (SPA) in Agriculture and Livelihoods, as well as our work in high value crop production in Latin America and Africa in conjunction with private sector actors such as Ben & Jerry’s, Cliff Bar, and Green Mountain Coffee. In addition, CRS has joined the Climate Smart Agriculture and NEPAD Alliance and is one of five global INGOs which have signed an MOU to scale up support for CSA in Africa. We have various speakers who will be presenting at the conference and we hope to share our experiences, learn from others, and be a part of the conversation on “cracking the nut” for expanding rural and agricultural markets amid climate change.

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