COP26: support smallholders for forests, agriculture and commodity trade 

On 8 June, IDH participated in a multi-stakeholder session of the COP26 Forest, Agriculture and Commodity Trade (FACT) Dialogue, which brings key countries that buy and produce products such as beef, soy and palm oil together to agree how these can be traded more sustainably.

We need to invest in smallholders, and move beyond what we've done before, in that nexus of the social and environmental dimensions of sustainability but underpinned by sound economics and finance. 2021 really holds the opportunity to deliver on that, because the private sector, governments, civil society, academia, are all focused on these conferences and on charting out the agenda for the next couple of years to deliver on the Sustainable Development Goals.

IDH CEO Daan Wensing

This meeting follows a government to government working session of the FACT Dialogue last Thursday 3 June, where IDH CEO Daan Wensing and IDH UK Country Director Ruchira Joshi presented on how to increase the involvement of smallholders, local communities and indigenous peoples within agricultural commodity supply chains.

Smallholders can play a critical role in acting as forest guardians, and helping prevent tropical deforestation. We hope that through convening the smallholder support thematic deep dive with the FACT Dialogue, IDH will be able to help unlock significant new investment in ensuring smallholders are part of the necessary but uncomfortable systemic shift to new systems of production.

IDH UK Country Director Ruchira Joshi

To mark the beginning of the FACT Dialogue working sessions, 24 countries endorsed a joint statement committing them to working together to protect the world’s precious forests while also promoting sustainable trade and supply chains of agricultural commodities.

In the statement, the countries identified four topics for particular focus:

  • Trade and market development;
  • Smallholder support;
  • Transparency and traceability;
  • Research, development, and innovation.

25 leading figures from the world of business and civil society, including IDH, will work on these topics in a Global Multi Stakeholder Taskforce on commodity trade. IDH will convene a Smallholder Thematic Deep Dive on 24 June 2021 (tbc). IDH teams have also been contributing to regional consultations in Asia, West Africa, Latin America and supporting the Government of Indonesia in its co-chair role.

Transforming smallholder business models requires support from different parties, ranging from government, supply chain companies and financiers, as well as donors and CSOs. The support, enhanced through the FACT Dialogue, shall focus on developing appropriate business models for smallholders so that they can be more productive and profitable while ensuring environmental safeguards such as forest and peatland protection.

Executive Chairman of Yayasan IDH in Indonesia and Country Representative of IDH in Malaysia, Fitrian Ardiansyah

The FACT Dialogue was launched in February 2021 and is led by the UK Government and co-chaired by the Government of Indonesia as part of preparations for this year’s UN Climate Change Conference of the Parties (COP26) in Glasgow, UK. It aims to find policy measures to support smallholder inclusion in markets, access to financial resources, and support their role in sustainable forest management and preservation.

The FACT Dialogue has further work ahead to deliver on its objectives as we move towards COP26. But the publication of today’s joint statement marks a highly important first step in laying the foundation for our work.  To have brought so many countries together, through the FACT Dialogue, both producers and consumers, and to plan a way forward on sustainable trade is a fantastic start. I am confident that this is just the beginning as we work to protect trade and development, and our biodiversity-rich forests, in equal measure.

COP26 President-Designate, Alok Sharma

2021 is a particularly important year for decisions by the international community on climate change, and many targets and investments are predicted to be decided in the coming months. COP26 will be the first time countries around the world will commit to new climate targets since the Paris Agreement at COP21.

On 5 June 2021, G7 leaders published a communiqué including commitments to action on biodiversity, climate change adaptation and climate change mitigation:

We commit to increase and improve our climate finance contributions through to 2025, including increasing adaptation finance and finance for nature-based solutions. We welcome the commitments already made by some G7 countries to increase climate finance. We look forward to further commitments at the G7 Leaders’ Summit or ahead of COP26. We call on all the Multilateral Development Banks (MDBs) to set ambitious dates for Paris Alignment ahead of COP26, and welcome their work supporting client countries. We urge the MDBs to mobilise increased climate finance including from the private sector, and to increase their support for a clean energy transition, adaptation and resilience, and nature.

 Finance Ministers and Central Bank Governors of the G7, Heads of the International Monetary Fund, World Bank Group, Organisation for Economic Cooperation and Development, Eurogroup, and Financial Stability Board.

International trade in agricultural commodities like palm oil, soy and beef, is worth over $80bn per year. Globally, 1.6 billion people depend on forests for their livelihoods, many of them in developing countries.  Forests are disappearing at an alarming rate – eighty percent of tropical deforestation is driven by agricultural commodity production. Global collaboration and an all-society approach, involving everyone from political leaders to businesses through to individual consumers, is needed to protect the planet’s biodiversity and establish a sustainable future.

Click here to read the full statement on the FACT Dialogue. The FACT Dialogue statement is supported by the following countries:

  • Belgium
  • Brazil
  • Colombia
  • Cote D’Ivoire
  • Democratic Republic of Congo
  • Denmark
  • France
  • Gabon
  • Ghana
  • Indonesia
  • Italy
  • Japan
  • Liberia
  • Malaysia
  • Netherlands
  • Nigeria
  • Norway
  • Paraguay
  • Peru
  • Republic of Congo
  • Republic of Korea
  • Spain
  • United Kingdom
  • Uruguay

Click here to read the G7 Communiqué.