Sustainable Agricultural Intensification

Population growth and increased standards of living have resulted in the expansion of agriculture globally. This in turn results in habitat loss, land degradation and increased carbon emissions. By creating financial incentives for farmers to increase production on available land while also encouraging sustainable practices, CPIC’s Sustainable Agriculture Intensification Working Group seeks to develop profitable solutions that meet human needs in a sustainable way.

The working group is led by the Global Environment Facility (GEF) and The Nature Conservancy (TNC). 

Financing Climate Smart Practices to Protect Forests and Improve Livelihoods
The challenge for small-scale cocoa farmers is to access the capital and tools to support their transition to more productive and sustainable practices, which often entails farm renovation and rehabilitation (R&R). This blueprint presents an innovative, blended value chain finance approach, involving investment from external investors and cocoa offtakers in smallholder cocoa farms by bundling loans through ground operators.

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Conservation-smart credit line for agriculture

The Conservation & Climate-Smart Lending Platform (C2SLP) is based on the inclusion of requirements for improved environmental practice in agricultural loan terms, which makes improved on-farm conservation a contractual obligation and a component of a farmer’s credit score. Farmers repay their loans with interest, but also build environmental restoration systems on their farmland, thereby creating both financial and environmental returns. The C2SLP is scalable and flexible: it can be adapted to different agro-ecological contexts and land management measures and as a pay-as-you go model, it is designed to save costs for lenders and investors.

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Organic dairy farm transformation through a hybrid bond

Dairying land use is a major contributor to elevated emissions, nutrient levels and water contamination in the Waipa catchment (New Zealand), where this blueprint is being piloted. Sub-scale dairy farmers are therefore under regulatory pressure to improve their environmental performance; however, they lack access to funding from the usual banking sources. This green hybrid bond represents a novel impact investment structure that will fund long-term environmental improvements and capture a market premium through organic certification.

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