Small-scale farmers and related supply chain actors contribute a significant share of global food production, particularly in East Asia and the Pacific, South Asia, and sub-Saharan Africa.

Small-scale producers and the agri-MSMEs serving them are expected to face the most severe impacts of climate change and have limited capacity to manage them. Despite their critical position in food production, emissions, and climate vulnerability, small-scale farmers and agri-MSMEs receive a meager share of climate finance.

This report complements our recent Landscape of Climate Finance for Agrifood Systems publication by examining the climate finance going specifically to small-scale agrifood systems, with the aim of identifying gaps and opportunities for action in this crucial but under-researched sector.

Key findings

• Climate finance to small-scale agrifood systems was strikingly low in 2019/20, at just USD 5.53 billion, far below the needs of producers and supply chain actors. This represents just 0.8% of total climate finance tracked across all sectors (USD 660.2 billion), and 19% of climate flows to agrifood systems as a whole (USD 28.5 billion).
• • At USD 28.5 billion, the total climate finance for agrifood systems as a whole is at least seven times lower than the most conservative estimated needs (CPI, 2023). Similarly, the unmet general financing needs of smallholder farmers are estimated at USD 170 billion annually, and USD 106 billion for agri-SMEs (ISF Advisors, 2022).
  • Climate finance for small-scale agrifood systems experienced a 44% drop in 2019/20, compared with the previous tracking period (2017/18). This reflects the 20% decline in climate finance to agriculture, forestry, other land uses and fisheries (AFOLU) in the same period yet contrasts with a significant increase in overall climate finance across sectors.

  Even as global climate finance is on an upward trajectory overall, the funding tracked for small-scale agrifood systems falls short no matter the metric these flows are considered against – be it share of farmland managed, contribution to food supply and domestic economies, vulnerability to climate change or contribution to GHG emissions.