Towards Policies for Climate Change Mitigation: Incentives and Benefits for Smallholder Farmers

The potential to sequester carbon in soils, enhance aboveground biomass and reduce non-carbon dioxide emissions creates an opportunity for the agricultural sector to benefit from mitigation finance. Smallholders can tap into this opportunity provided that adoption barriers can be successfully addressed. This report provides an overview of the main international climate finance mechanisms and sources, and describes some of the main barriers to the adoption of sustainable agricultural practices by smallholders. It also describes what policies and instruments can be used to increase smallholder access to finance and investment, and investigates how climate finance can support the policies identified in the previous section to foster the implementation of sustainable agricultural practices by smallholders who could potentially benefit from climate finance. The conclusion of this report is that climate finance can be used as an instrument to overcome barriers to smallholders’ adoption of sustainable agricultural practices by accessing new funds, designing new disbursement mechanisms, and forging new partnerships.