Dossier

Making value chains climate-smart

Climate-smart agricultural (CSA) practices are increasingly adopted as a means to both adapt to a changing climate, and to mitigate agriculture’s negative environmental impacts. Increasing emphasis is placed on a systems approach to CSA, where climate-smart interventions seek to address the entire value chain.

The focus of climate-smart agriculture has shifted, with interventions now taking the whole value chain into account. © Cecilia Schubert
The focus of climate-smart agriculture has shifted, with interventions now taking the whole value chain into account. © Cecilia Schubert

Wednesday, 03 October 2018

CSA is a now widely implemented approach to agriculture, which focuses on achieving three central goals: sustainably increasing productivity, adapting to adverse climate change, and mitigating the negative impacts of current agricultural practices on the environment. However, more recently, CSA stakeholders have intensified efforts to develop climate-smart value chains, which aim to address the impacts of climate change across the entire chain from – ‘farm to fork’.

This shift to a focus across the value chain results from the recognition that climate change can impact upon multiple stages – for instance, extreme weather conditions like flooding damages crops but can also render roads unusable, impacting on transport for processing or to get produce to markets. In addition, the imperative to mitigate agriculture’s negative effects on the environment also requires value chain actors to adjust off-farm processes along the chain – by introducing low-emission transport systems, or minimising water usage, for example.

Impacting landscapes

A climate-smart value chain approach identifies numerous entry points for the implementation of CSA programmes. “The impacts of climate change are experienced across large areas and therefore any response needs to happen at multiple scales, across multiple sectors,” says Richard McNally, Global Coordinator for Climate Change at Dutch development organisation, SNV (see Spore article, Creating Shared Values for Companies, Society and the Environment).

By paying attention to the entire system, value chain actors are better able to discern not only the most appropriate and effective farming practices, but also which actors are likely to have the most influence in achieving the desired outcome. SNV’s Climate Smart Landscapes Solution seeks to bring together a wide range of stakeholders, primarily by forming public-private partnerships, and pursuing innovative financing routes, in the development of climate-smart programmes. In Tanzania and Burkina Faso, SNV is working alongside national governments to help provide farmers with biomass in the form of wood and charcoal – used as cooking fuel by the majority of each country’s population – while replanting trees. As part of the project, SNV is also working alongside local private companies which produce more versatile and fuel-efficient cooking stoves.

Assessing risk

To help assess potential climate risks and the action required to mitigate these impacts along the value chain, several organisations focused on value chains have produced risk assessment tools to help inform the design of climate-smart initiatives. For example, the International Fund for Agricultural Development (IFAD) and the CGIAR research program on Climate Change, Agriculture and Food Security have produced a five-step climate change risk assessment, as part of a ‘knowledge-based’ approach to value chain development. A number of IFAD-led projects have utilised the risk assessment, including the Project for the Restoration of Livelihoods programme underway in Uganda, and the Nicaragua-based Adapting to Markets and Climate Change project, which focuses on coffee and cocoa value chains. SNV have also developed a Climate Risk Assessment Tool that helps to identify the primary impacts, actors, processes and resources across a value chain that is vulnerable to climate change.

A recent CTA discussion paper examines the implications of private sector investment in Caribbean CSA initiatives, giving a detailed breakdown of the relative impacts of climate change on various actors within the roots and tubers, and fruit and vegetables value chains. For farmers, more extreme droughts threaten yields, and limits access to critical inputs like water. Meanwhile, for agro-processors, supply disruption renders machinery under-utilised, resulting in a higher fixed operation cost per unit of raw material processed. Following this analysis, the paper explores ameliorative policy environments and financial support avenues for agricultural value chains, and specific actors, at risk of climate change impacts.

Further down the chain

Systems-based solutions, which take the entire value chain into account, are the ideal; this is not always a feasible aim, however, and the majority of climate-smart interventions are currently addressing individual points along the value chain including transport, storage, processing and consumer stages.

In Rwanda, even with more efficient and climate-smart maize production, irregular rainfall patterns and resulting market volatility has encouraged many farmers to hoard produce in order to profit from periods of scarcity. However, a lack of appropriate storage facilities has led to spikes in maize aflatoxin contamination, with contaminated produce going to waste when rejected by processors – who must then rely on maize imports. To ensure the proper storage of maize, and to help reduce the 30-40% of produce lost post-harvest, Rwandan processor Africa Improved Foods (AIF) has led a joint venture, alongside Rwanda’s government and the World Bank, to establish rural collection centres. “By setting up these collection points, we have been able to reduce our field rejections for aflatoxin-contaminated maize…by more than 52% in the second harvest season of 2017,” says AIF’s CEO, Amar Ali.

Efforts to achieve low emission, climate-resilient food systems can also be seen at the consumer end of the value chain. The Sri Lankan government has helped fund an industrial-scale compost plant for the city of Balangoda, in order to recycle organic waste unsuitable for incineration in the production of fertiliser. This is then used to add value back into the local food system as an organic input. From 2003 to 2017, the revenue generated in fertiliser sales has increased from around Rs 200,000 (€1,000) to over Rs 2,000,000 (€10,000) in 2017, allowing the city’s council to invest in improved infrastructure for gathering waste. With global food loss and waste estimated to produce 8% of total greenhouse gas emissions, such recycling schemes are instrumental in minimising the carbon footprint of food systems.

Liquid assets

The principle of low emissions or carbon neutrality is well established in the drive towards more climate-smart value chains. More recently, however, minimising the use of water, and maximising its efficiency in agricultural systems – from irrigation on the farm, to the cleaning of produce at the processing stage, to the transport of produce from ports – has also gained increasing attention from value chain actors. Water occupies a central position at multiple points across agricultural value chains. At the same time, climate change poses a major threat to water availability worldwide, with many farmers living in the least economically secure parts of the world already suffering from extreme drought.

At the farm level, Unilever have led a number of initiatives to fund the installation of drip irrigation systems, which, while offering more efficient water usage, can come at high cost to the farmer. In Africa, the Unilever Tea Tanzania and Kenya Biodiversity Action Plan has planted over 1.45 million trees across the two countries in order to help maintain stable rainfall patterns and to protect catchment areas. Unilever’s rehabilitation of two water springs in southern Kenya has also helped to ease conflicts between different stakeholders in the region, and to provide a separate, protected watering point for indigenous animals.

Harnessing the private sector

Unilever’s initiatives have demonstrated the positive results of private sector intervention in the emerging field of climate-smart value chain development.The importance of private sector involvement has been affirmed in the broader, systems-based approaches that have so far been developed.

Engaging the influence of the private sector, in combination with funding and regulation from the public sector, can also help to scale-up CSA practices with a proven record of success, and to scale-out diverse climate-smart interventions across entire value chains. As Oluyede Ajayi, Senior Programme Coordinator for Agriculture and Climate Change at CTA, explains, “The resources and effective engagement of the private sector players is essential for a successful climate smart value chain. The actions of the public sector is also key, as they create an enabling environment that influence the investment decisions of private sector and other value chain actors.”

Sam Price

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The focus of climate-smart agriculture has shifted, with interventions now taking the whole value chain into account. © Cecilia Schubert

SOURCE: Based on International Institute for Sustainable Development

The Technical Centre for Agricultural and Rural Cooperation (CTA) is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.