Interview Richard McNally
Richard McNally highlights the role to be played by private sector investment in the growth of climate-smart value chain
Why is it important to take a multi-sectoral approach to address the challenges posed by climate change?
The impacts of climate change are experienced across large areas and therefore any response needs to happen at multiple scales (local to regional) across multiple sectors; in particular the agriculture, water, energy and forests sectors. We know that climate change is projected to impact on the frequency and magnitude of both floods and droughts which will impact crop yields. Agriculture, water and climate change are inextricably linked and therefore require integrated solutions across these sectors.
As a result of unsustainable practices, the land area and fertile soil available for crop and animal production is shrinking in many regions. This will be further exacerbated by climate change, particularly in highly vulnerable regions. Since we do not want the further conversion of forests and the detrimental impacts that would cause, we are looking to support increased productivity per hectare while, at the same time, reducing water, fertiliser and other inputs. This can be achieved by identifying and supporting more resilient and productive agricultural practices, while also helping to ensure that it does not lead to continued forest loss.
How does SNV support development of climate-smart agricultural value chains? Can you give an example?
SNV has developed the Climate Risk Assessment Tool (CRAT) to help identify the main climate impacts, and the actors, resources and processes along the value chain that are most vulnerable. This allows us to integrate climate change adaptation options into our projects. We have applied this in a growing number of SNV’s projects and this has helped shape interventions in Cameroon, Ethiopia, Kenya, Mozambique, Uganda and Zambia. CRAT has proved a critical tool in raising stakeholder awareness on climate change issues.
CRAT follows a seven-step process: first, we use the best scientific data and field visits to identify the most likely climate hazards and trends to determine their impacts on the farming system (steps 1 and 3a). As part of the local data collection, we also get to better understand current adaptive capacities (step 3b), ensuring more vulnerable groups, like women, are included. Step 2 maps out the main actors and resources along the value chain, which can then help to inform an assessment of where the risks are highest (step 4). Once the climate risks and the gaps in actors’ adaptive capacity are clear, we determine adaptation options that can adequately address these risks and gaps (step 5). These options are then assessed (step 6) and integrated into the programme (step 7). In Mozambique, for example, we used the tool to provide advice on various climate-smart practices for a variety of crops (maize was a key one), including integrated soil fertility management, different seed varieties and improved harvesting, post-harvest handling and storage.
What role do public-private partnerships play in promoting more resilient food systems?
As mentioned, in order to adapt to the impacts of climate change we need to be working across sectors, with a range of stakeholders at different scales of intervention. This includes working at the farm level to support more resilient practices, engaging businesses towards more resilient supply chains and driving changes in the sector through working with governments on a supportive enabling environment.
In May 2018, The Netherlands Ministry of Foreign Affairs contracted SNV to implement the Climate Smart Agriculture East Africa programme in Kenya, Tanzania and Uganda. The 5-year programme, valued at €39 million, will be implemented by SNV in partnership with Wageningen University and Research, the CGIAR Research Program on Climate Change Agriculture and Food Security, and Agriterra, in cooperation with Rabo Partnerships. The overall programme goal is to increase the availability of climate-smart food for the growing population in Kenya, Tanzania and Uganda. The programme will focus on increasing the adoption of climate-smart practices and technologies among farmers and agro-enterprises; increasing investments and business growth in climate-smart value chains; and creating the enabling environment necessary to ensure large-scale rollout of market-driven climate-smart agriculture. The programme highlights the need for producer-private-public partnerships to drive the necessary sectoral transformation needed to respond to climate change and to promote more resilient food systems.
Which innovative financing mechanisms do you think have the most potential to stimulate climate-smart agriculture?
There is a critical urgency to catalyse the expertise and innovation capacity of the private sector, develop new technologies, and tap into the financial leverage that businesses and investors can provide. SNV is helping to stimulate private sector investment in climate change adaptation and mitigation solutions, creating shared value for the companies, society and the environment. We are using public funds in combination with company funds to create business cases ready for further investment to scale up. We use these public funds to cover some initial costs, to allow companies to better respond to the challenges and opportunities of climate change, and to help put them in a better position to attract investment.
For example, SNV’s East Africa Catalytic Sustainable Agribusiness Investment Project has worked with businesses and investors in Kenya to identify bankable projects that offer a return on investments. A screening tool has been developed to determine possible companies and a further tool was developed to assess potential investors. The project produced a pipeline of firms receiving incubation and acceleration support in the form of analysis, training, technical assistance, public-private dialogue, and strategic partnerships to develop and expand market uptake of their climate-smart and inclusive innovations to make them investment ready. For example, under this programme we supported Dryland Seed which is a seed multiplier for seeds suitable in low and medium altitude agro-zones, as well as drought-tolerant and fast maturing varieties; Mara Beef and Ol Pejeta Conservancy were helped to integrate pastoralist communities into their business models to mitigate some of the vulnerabilities that these communities face during droughts. Cogar Farm was given advice on an approach to test the bundling of the sale of improved breeds with fodder services and biogas products as a climate-smart approach to dairy. We helped them access financing for smallholder farmer feed costs through Century Microfinance Bank.