The Climate Finance Gap for Small-Scale Agrifood Systems

This report by the Climate Policy Initiative analyzes climate finance flows to small-scale agrifood systems for the 2019/20 period, revealing a significant funding gap and a sharp decline in investment compared to 2017/18. It highlights the critical role of small-scale producers in global food security and their high vulnerability to climate change, while recommending a 'just transition' approach to scale up equitable financing.

• Climate finance for small-scale agrifood systems was extremely low in 2019/20, totaling USD 5.53 billion. This amount represents only 0.8% of all tracked global climate finance across all sectors (USD 660.2 billion) and 19% of the total climate finance directed toward agrifood systems (USD 28.5 billion).
• There is a massive gap between available climate finance and the estimated needs of small-scale actors. General annual financing needs for smallholder farmers are estimated at USD 170 billion, and USD 106 billion for agri-SMEs. Furthermore, total climate finance for all agrifood systems (USD 28.5 billion) is at least seven times lower than the most conservative estimated needs.
• Climate finance for small-scale agrifood systems fell by 44% in 2019/20 compared to 2017/18. This decline was driven by reduced commitments from public funders: bilateral DFIs cut commitments by 89%, governments by 45%, and multilateral DFIs by 24%. This trend occurred despite an overall increase in global climate finance across other sectors.
• Public entities provided the vast majority of climate finance for small-scale agrifood systems in 2019/20, contributing approximately USD 5.3 billion (96%). International finance made up about 81% (USD 4.3 billion) of this public total. Private finance was minimal at USD 0.14 billion (3%), with philanthropies providing 91% of that amount.
• Grants and concessional debt are the dominant financial instruments, together accounting for 88% of flows (USD 2.7 billion in grants and USD 2.2 billion in concessional debt). Equity investment is severely lacking, representing only 0.6% (USD 0.03 billion) of total climate finance for these systems.
• In 2019/20, 50% of finance targeted adaptation, 33% targeted dual climate objectives, and 17% targeted mitigation. While dual-objective finance reached USD 1.8 billion, USD 1 billion of this was attributed to China's Conversion of Cropland to Forest Program (CCFP); without this, dual-objective funding would be only 18% of the total.
• Geographic distribution of finance is uneven relative to need. Sub-Saharan Africa received the largest share (34%, or USD 1.86 billion). South Asia received only 11% despite being the second-most climate-vulnerable region. The Middle East and North Africa received only 1.5%.
• Finance is heavily concentrated in the agriculture (57%) and forestry (29%) sub-sectors. Fisheries were notably underserved, receiving only 0.5% of total climate finance, and food loss/waste received less than 0.1%.

APA

Chiriac, D., Vishnumolakala, H., & Rosane, P. (2023). The Climate Finance Gap for Small-Scale Agrifood Systems. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-Climate-Finance-Gap-for-Small-Scale-Agrifood-Systems-3.pdf

Chicago

Chiriac, Daniela, Harsha Vishnumolakala, and Paul Rosane. The Climate Finance Gap for Small-Scale Agrifood Systems. Climate Policy Initiative, 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-Climate-Finance-Gap-for-Small-Scale-Agrifood-Systems-3.pdf.

Wikipedia

{{cite report |last1=Chiriac |first1=Daniela |last2=Vishnumolakala |first2=Harsha |last3=Rosane |first3=Paul |title=The Climate Finance Gap for Small-Scale Agrifood Systems |publisher=Climate Policy Initiative |date=November 2023 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-Climate-Finance-Gap-for-Small-Scale-Agrifood-Systems-3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chiriac2023climate, author = {Chiriac, Daniela and Vishnumolakala, Harsha and Rosane, Paul}, title = {{The Climate Finance Gap for Small-Scale Agrifood Systems}}, institution = {Climate Policy Initiative}, year = {2023}, month = nov, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/The-Climate-Finance-Gap-for-Small-Scale-Agrifood-Systems-3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }