SEARCA partners with CoSAI and IUCN, hosts dialogue on innovative agricultural finance

  • By Jean Rebecca D. Labios
  • 7 December 2021, Tuesday

LOS BAÑOS, Laguna, Philippines – The Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) collaborated with the Commission on Sustainable Agriculture Intensification (CoSAI) and the International Union for the Conservation of Nature (IUCN Asia) for a regional discourse titled "Paying for Nature and Society: Dialogue on Innovative Financial Mechanisms to Promote Equity and Sustainability in Agriculture – Asia." Held on 16 November 2021, the virtual dialogue is second in a series of regional discussions across the globe to understand how to incentivize farmers to protect and restore nature.

L-R: Dr. Dindo Campilan (IUCN), Dr. Glenn Gregorio (SEARCA), and Ms. Josefina Achaval-Torre (CoSAI).L-R: Dr. Dindo Campilan (IUCN), Dr. Glenn Gregorio (SEARCA), and Ms. Josefina Achaval-Torre (CoSAI).

Dr. Dindo Campilan, Asia Regional Director and Oceania Hub Director of IUCN, officially opened the dialogue by highlighting the intent of the organizers to generate interest around agriculture as a force for good in conservation. He also underscored the importance of innovation, such as in financial instruments, in promoting environmental sustainability in the different regions around the globe.

Through Dr. Ximena Rueda of CoSAI and the Universidad de los Andes, emerging evidence which highlights the urgent need for better innovation of equitable financial instruments to support environmental objectives in Asia were presented. Her discussion also highlighted the instruments developed for conservation, which offer great opportunities for expansion into agricultural landscapes where the rural poor live. To be more effective, innovations must factor in political, technological, and institutional facets that are within the reach of the target stakeholders.

The dialogue also featured a wide-ranging panel discussion with Dr. Gamini Samarasinghe, Additional Secretary (Agriculture Technology) of the Ministry of Agriculture of Sri Lanka; Ms. Irish Baguilat, Coordinator for UNDFF (Decade of Family Farming) and Women Farmers' Agenda of the Asian Farmers' Association; Dr. Prasun Kumar Das, Secretary General of the Asia Pacific Rural and Agricultural Credit Association (APRACA); Ms. Erin Sweeney, Lead for Sustainable Investment and Inclusion of Grow Asia; and Mr. Eelko Bronkhorst, Managing Director of Financial Access.

The panelists shared their different perspectives and experiences with design or implementation of innovative financial incentives in agriculture. Ways in which financial incentives are designed and what needs to change to consider a landscape approach were discussed, along with uncovering aspects of replicability, scalability, and temporality of financial incentives in agriculture to support sustainable and equitable development. To better contextualize the development and implementation of financial instruments, the panelists shared real-life experiences across Asia.

Dr. Samarasinghe shared a government perspective in the discussion. In Sri Lanka, their Department of Agriculture incentivize farmers to produce sustainably through locally-funded projects, and also closely monitoring internationally funded projects. He also shared the role of the state in providing an enabling environment by establishing effective and inclusive market systems and strengthening information management systems of lands, production, subsidies, and value chains.

Ms. Baguilat voiced out farmers' perspectives on the need for positive incentives, and the issues that may arise with it. She shared how farmers' organizations can play a key role in promoting innovative new green financial instruments. She cited AFA's joint project with FAO in Bangladesh, which promoted financial instruments in a larger scale.

Dr. Das discussed his experience in advocating for financial instruments through APRACA, which is one of the largest agricultural development banks in Asia. He identified several challenges for farmers, such as insufficient income to prove credit worthiness, fear of getting deep in debt, lack of insurance coverage, volatility of borrowers' businesses, and lack of technical know-how. Dr. Das suggested that financial instruments must be able to contextualize environmental, social, and governance factors in the target farming communities.

From the private sector, Ms. Sweeney drew from her organization's experiences and identified the need for greater collaboration across value chains to promoting known solutions and best practices. Referring to case studies is also an effective approach to contextualize and move from piloting to actual scaling. She also emphasized on the need for better policies to bridge the gap between farmers' needs and requirements of sustainability standards. For Mr. Bronkhorst, one of the main challenges is in the disconnect between investment opportunities and requirements for investment in sustainable agriculture. As such, it is important to bring together the different models and pilots from across the globe and identify how they can be contextualized per target stakeholder to maximize the potentials of these financial instruments.

In summary, the discussion highlighted how innovation of equitable financial instruments to support environmental objectives is possible with the leadership that is present in farmers' associations and cooperatives. It is important to note that in designing financial products, the providers must consider the adaptive capacity, including its strengthening, for scaling up financial services. Repeatedly, the discussion emphasized on the need for contextualization in applying financial instruments in different farming communities; there is no "one size fits" all and it varies per region, per country. It was also highlighted how participation is key; farmers must be included in crafting solutions and interventions should perceive them as change agents. Lastly, upgrading of infrastructures and creating enabling environments such as improved information management systems and market systems are crucial in the capacity building of farmers and farming communities.

Dr. Glenn B. Gregoio, SEARCA Director, closed the dialogue by reminding the audience how the on-going COVID-19 pandemic has put further emphasis on the need for effective and innovative financial mechanism, especially in agriculture and the food producers, farmers, and farming families. Dr. Gregorio expressed how he hoped the dialogue will help convince financial service providers to invest and offer products that are more supportive on sustainable agriculture. He also pinned on the importance of bringing forward academe-industry-government (AIG) linkages to provide beneficial support and necessary tools to promote equity and sustainability in agriculture, an advocacy that is in line with SEARCA's 11th Five-Year Plan of Accelerating Transformation through Agricultural Innovation (ATTAIN).

To stream the dialogue, please go to SEARCA's YouTube channel or refer to this link: https://youtu.be/dHspBSSOZZg. A narrative report on the event may be accessed through this link: https://bit.ly/31E5DgF.