The challenge

Smallholder communities, cooperatives, and small enterprises produce up to 60% of the world’s food. They also meet their demands for fuelwood, fodder, and other tree and forest products, and trade surpluses locally and beyond. However, smallholders are rarely consulted when designing value chain or conservation-driven investment initiatives, and such investments tend to benefit only those who directly contribute to the company or donor goals.

Though the local economy is stimulated, limited attention is given to ‘the bigger picture, including the need to move towards social equity and sustainable landscape management. Farmers also have limited access to finance for improving and diversifying their production, which would discourage the need to move to frontier areas.

Landscape analysis of financial flows has confirmed that landscape-level investments do improve average income, but they rarely contribute to maintaining or enhancing essential ecosystem services on which communities directly depend, and do little to enhance food security or the capacity to adapt to climate change. In a study in 2019, barriers were identified that restrict smallholder access to finance and hinder food system transformation, but few successful examples were documented.

Towards inclusive food systems

After coordinating seven case studies of locally-led initiatives in 2021, we can see how locally driven initiatives have been able to overcome challenges of risk, scale, locally appropriate financial and non-financial services, etc. To better address how both local needs and international objectives can be achieved, results from selected case studies are used in this session to answer two key questions.

(a) How to make local innovations complementary to internationally driven initiatives?
(b) What investment mechanisms address the finance needs of all actors at the landscape level?

The outcome of the presentation aims to provide a framework for locally-led, inclusive financing mechanisms that enable the transformation of food systems.