Addressing Financing for Agriculture: Ensuring a triple dividend for smallholders

The report examines the financing gap for smallholder farmers in developing countries, who are critical for global food security but highly vulnerable to climate change. It argues that achieving a 'triple dividend'—increased food production, improved adaptive capacity, and reduced emissions—requires a coordinated mix of public, private, and climate-specific financing. The document analyzes the limitations of current mechanisms, such as the decline in official development assistance for agriculture and the high transaction costs of carbon markets, and recommends creating national funds and enabling policy environments to support climate-smart agricultural transitions.

• Smallholder farmers, defined as those owning two hectares of land or less, are essential for food security, providing up to 80 per cent of food in developing countries, yet they are among the most vulnerable to climate change.
• Significant annual investments are required in developing countries to achieve the triple dividend: approximately US$210 billion for food security, US$14 billion for adaptation by 2030, and roughly US$12.8 billion for mitigation in 2030.
• Private sector investment, which accounts for two thirds of global agricultural financial flows, often fails to benefit smallholders and can lead to 'land grabs' or the promotion of industrial agriculture over subsistence farming.
• Carbon markets are currently not a viable source of large-scale financing for smallholders due to high transaction costs, slow approval processes, and the exclusion of soil carbon sequestration from the Clean Development Mechanism (CDM).
• UNFCCC financing mechanisms, such as the Green Climate Fund (GCF) and Nationally appropriate mitigation actions (NAMAs), offer potential for scaling up investment, but risk creating 'silos' between mitigation and adaptation.
• National governments in developing countries often allocate very little of their budgets to agriculture, with some sub-Saharan African countries spending as low as 4 per cent of agricultural GDP.

APA

Parry, J.-E., & Boyle, J. (2012). Addressing Financing for Agriculture: Ensuring a triple dividend for smallholders. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/food_security_agriculture_financing.pdf

Chicago

Parry, Jo-Ellen, and Jessica Boyle. Addressing Financing for Agriculture: Ensuring a triple dividend for smallholders. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/food_security_agriculture_financing.pdf.

Wikipedia

{{cite report |last1=Parry |first1=Jo-Ellen |last2=Boyle |first2=Jessica |title=Addressing Financing for Agriculture: Ensuring a triple dividend for smallholders |publisher=International Institute for Sustainable Development |date=June 2012 |url=https://www.iisd.org/system/files/publications/food_security_agriculture_financing.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{parry2012addressing, author = {Parry, Jo-Ellen and Boyle, Jessica}, title = {{Addressing Financing for Agriculture: Ensuring a triple dividend for smallholders}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = jun, url = {https://www.iisd.org/system/files/publications/food_security_agriculture_financing.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }