Examining the Climate Finance Gap for Small-Scale Agriculture

The report finds that climate finance for small-scale agriculture is disproportionately low, averaging USD 10 billion annually in 2017/2018, which represents only 1.7% of total tracked global climate finance. This funding is overwhelmingly public (95%) and primarily delivered via grants (50%). The analysis highlights a significant gap between these flows and the estimated annual financial needs of small-scale farmers, which are approximately USD 240 billion. The report identifies critical barriers, including limited land tenure, high transaction costs for dispersed customers, and a lack of private sector investment. It recommends enhancing public-private collaboration through blended finance, implementing weather-indexed insurance, and improving data collection on domestic and private financial flows to better target climate-smart agricultural investments.

• Annual tracked climate finance for small-scale agriculture in developing countries averaged USD 10 billion in 2017/2018, accounting for approximately 1.7% of total global tracked climate finance.
• Climate finance for small-scale agriculture is dominated by the public sector, which provided 95% of the tracked funds, with government donors contributing 39%, multilateral DFIs 32%, and bilateral DFIs 16%.
• Grants are the most common financial instrument, representing 50% of committed finance, followed by concessional debt at 33% and non-concessional debt at 16%.
• Small-scale agriculture climate finance is more balanced between adaptation and mitigation than general climate finance; 49% of funds targeted adaptation, 29% targeted both, and 21% targeted mitigation only.
• The largest share of funds (36%) was allocated to low-GHG and climate-resilient infrastructure, while improving agricultural production and rural livelihoods each received 14%.
• Funding is heavily skewed toward general rural communities (41%) and producers/cooperatives (31%), while value chain actors (7%) and formal financial institutions (3%) are significantly underserved.
• Significant data gaps exist regarding public domestic financial flows and private sector investments, which are often the largest sources of agricultural investment in low- and middle-income countries.
• Key barriers to finance include political and technical hurdles at the national level (such as poor land tenure and low absorptive capacity) and commercial barriers at the subnational level (such as high transaction costs and perceived risk).

APA

Chiriac, D., & Naran, B. (2020). Examining the Climate Finance Gap for Small-Scale Agriculture. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/11/Examining-the-Climate-Finance-Gap-in-Small-Scale-Agriculture.pdf

Chicago

Chiriac, Daniela, and Baysa Naran. Examining the Climate Finance Gap for Small-Scale Agriculture. Climate Policy Initiative, 2020. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/11/Examining-the-Climate-Finance-Gap-in-Small-Scale-Agriculture.pdf.

Wikipedia

{{cite report |last1=Chiriac |first1=Daniela |last2=Naran |first2=Baysa |title=Examining the Climate Finance Gap for Small-Scale Agriculture |publisher=Climate Policy Initiative |date=November 2020 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/11/Examining-the-Climate-Finance-Gap-in-Small-Scale-Agriculture.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chiriac2020examining, author = {Chiriac, Daniela and Naran, Baysa}, title = {{Examining the Climate Finance Gap for Small-Scale Agriculture}}, institution = {Climate Policy Initiative}, year = {2020}, month = nov, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/11/Examining-the-Climate-Finance-Gap-in-Small-Scale-Agriculture.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }