Working towards a living income for smallholder farmers is critical to halting and reversing global deforestation. IDH has been convening a group of senior stakeholders to discuss this topic as part of the FACT (Forest, Agriculture and Commodity Trade) Dialogue co-chaired by the UK and Indonesia in the lead up to COP26. Through our discussions, it has become apparent that smallholder farmers in forest frontiers need to be at the centre of the sustainable agriculture transition for forests to thrive, and for declarations made at COP26 to be successful. Today, at the start of week two of COP and after Nature Day, I am buoyed by the collective commitment of governments, civil society, and the private sector to making these declarations a reality.
So why this sense of optimism now, after what has been a very protracted process? There are three reasons I believe we have everything to play for. First, nature, land use and agriculture have had more focus and airtime at COP, than in previous years. While fossil fuel emissions must remain a key priority, the Glasgow Leaders Pledge on Forests and Land Use demonstrates the centrality of these topics to the discussions. Leaders representing over 85% of the world’s forests have committed to halting and reversing deforestation and land degradation by 2030 at COP26. £8.75 billion ($12bn) of public funds will be committed to protect and restore forests, alongside £5.3 billion ($7.2 billion) of private investment. The FACT Roadmap provides us with a blueprint on how to move the topic of smallholders in forest frontiers from a central discussion point to an area for quick and concrete action.
Second, the majority of us agree on the specific nature of the problem. We can see that forest protection and agricultural productivity loss are intertwined in the case of high forest-risk tree crops such as cocoa, palm, and coffee for example. Research done by IDH shows that existing funds options to tackle this issue seek large ticket sizes and commercial returns. Furthermore, investable projects are often not situated within wider jurisdictional approaches, as my colleague Nienke Stam explored in her blog post in July. At the same time, great clarity that there is an urgent need to support smallholders financially, and in innovative ways over a 10–15 year time period. This is where we are missing specific types of financing that can bridge the smallholder income gap, and lead to reforestation and protection of forests. This problem statement has been validated in all the conversations I have had at COP with government ministers, civil society, and even business representatives.
Third, we don’t need to reinvent the wheel. We already know what we need to do, and even how to do it. Over the course of the last week IDH has hosted events discussing NI-SCOPS (National Initiatives for Sustainable and Climate Smart Oil Palm) the Cocoa and Forests Initiative, and the Mato Grosso Produce, Conserve and Include Strategy originally launched at COP21 in Paris. Each of these initiatives has plenty of elements to recommend it as a scalable solution to the challenge of smallholder support. We need only to identify the specific elements to achieve scale, and drive transformational change, rather than setting up more individual projects. This could be done through actions in countries where national and jurisdictional level actions are already underway.
Despite this positive outlook, progress will take a monumental effort from us all, and my optimism shouldn’t be mistaken for a lack of understanding of the size of the challenge moving forward. At the start of the so called ‘Decade of Action’ we must shift rapidly from dialogue to delivery. We are battling decades of perverse incentives, unsustainable agricultural production practices, and poverty incomes in forest frontiers. The introduction of standards and supply chain due diligence legislation can provide an answer but also, burden and even exclude smallholders from markets altogether. The increasing importance of ESG criteria for investors, lenders, and insurers, and need for climate and biodiversity related disclosures could be another route to move the needle but will take time to be regulated and harmonised. Similarly, the rising importance of issues such as deforestation in the consumer consciousness, means companies are responding more rapidly with alternatives to products that may present a risk from deforestation e.g., beef, once again creating unintended consequences by moving away from areas we should be working even more in, to address issues.
In reality, we will have to push on all these fronts at the same time. In the UK, IDH will do this by collaborating with all our partners to together address the shared challenges we face in protecting our climate and forests and ensuring that smallholders are seen as a central part of the solution. By lifting barriers of access to credit, information, and markets for smallholders in forest frontiers, we can relieve much of the current pressure to clear forests. In other words, by considering farmer income objectives and forest restoration objectives in tandem, we can reach both goals more effectively – and surely there is no better reason for optimism as we kick off week two here in Glasgow?