Protecting smallholder farmers and building resilience [interview part 1]

What issues are smallholder farmers facing that led to the Smallholder Safety Net Upscaling Programme (SSNUP)?

Nearly 80 percent of the world’s poor live in rural areas, 500 million of them being smallholder farming households. Growth in the agricultural sector is two to four times more effective in reducing poverty than growth generated by other sectors; however, smallholder farmers face vast challenges. Among other things, they are vulnerable to price volatilities and lack access to resources, technology, inputs, finance, knowledge and markets.

On top of that, the effects of climate change are becoming increasingly evident. We see rural communities being flooded by rising sea levels and becoming coastal landscapes, while other areas are becoming arid regions by prolonged drought. This deprives people of their basic livelihoods and leads many of them to migrate to cities.

Food security is massively threatened. If we don't find solutions now, it will soon be too late. In order to protect food security and combat widespread rural poverty, smallholder household productivity, income and resilience must significantly increase along with the adoption of more sustainable farming. This is why SSNUP exists.

What is SSNUP and how is it going to protect smallholder farmers?

SSNUP is a project that has brought together five major impact investors, including Oikocredit, to address the weaknesses in smallholder farmers’ productivity, income and resilience. It is a 10 year programme with a combined budget of € 55 million to sustainably improve the business transactions between responsible agricultural value chain market actors and smallholder farmers, with a particular emphasis on gender equality and job creation.

The impact investors will use their local expertise and capital to deepen and strengthen the safety nets of 10 million smallholder households in Africa, Asia and Latin America. The efforts of this project will reach an estimated 50 million low-income and highly vulnerable people and will be carried out in three phases. Oikocredit’s contribution to the first phase, which was approved in January this year, will focus on price risk management and weather index insurance [learn more about this in the second part of the interview].

In addition to promoting agriculture value chains, SSNUP will make significant and lasting contributions to seven of the Sustainable Development Goals (SDGs): no poverty, zero hunger, gender equality, decent work and economic growth, responsible consumption and production, climate action, and life on land.

Who is involved in this programme?

It was developed by the Swiss Agency for Development and Cooperation and the Luxembourg Directorate for Development Cooperation and Humanitarian Affairs, in cooperation with Lux-Development. It is coordinated by ADA (Appui au Développement Autonome). In addition to Oikocredit, four other large impact investors are involved: Grameen Crédit Agricole Foundation, Incofin, responsAbility and Symbiotics. The programme relies on the expertise and experience of impact investors already working in the regions where the project will take place.

What is unique about SSNUP?

Well for one thing, five of the largest impact investors are being brought together for this project. Their assets are between 92 million and 3.5 billion euros, investing between 10 and 100 percent of their portfolios in agriculture. Having all of us focus on smallholder agriculture farmers in this type of setting is new and it enables us to think and act big. It’s also about working together to develop something innovative that will help smallholder farmers become stronger and more resilient.

Why is Oikocredit participating in the programme?

Our heart beats for agriculture. Increasing productivity and sustainability in agriculture, and improving the living conditions of smallholder farmers, has been a core concern of Oikocredit from the start. This is a major challenge because of the different contexts and volatility in this sector.  We know that the majority of poverty-stricken people live in rural/agricultural areas, and we know that this sector doesn’t get the support it needs. Rural regions are also the ones to suffer from the effects of climate change. So if we want to see people make a way out of poverty for the long term, we have to strengthen their resilience.

We were immediately convinced to participate in SSNUP when we learned that the intention was to expand the safety net for smallholder farmers with insurance, climate-smart agriculture, access to finance, new technologies and training courses for their application. Our social impact management, capacity building, and agriculture experts will work on the programme. We hope for two things: when the work of the agricultural partners becomes more secure, we will have the opportunity to expand our agricultural portfolio. At the same time, stronger partner organisations are more attractive and therefore have more access to additional donors outside of Oikocredit. It has long been known that smallholder farmers around the world need much more support, access to markets and resources, and fair profit sharing in value chains. 

Find out just how Oikocredit plans to help SSNUP achieve its goal with ‘weather index insurance’ and learn about what partner organisations have been selected for this initiative, in the second part of this interview.

This interview was conducted by Marion Wedegärtner from Oikocredit’s West German Support Association