In this report, we briefly chart the Agriculture, Forestry, and Land Use landscape in India and discuss how climate change is affecting agriculture.
Climate change is one of the biggest challenges of our times, and the growth in investments according to environmental, social, and governance issues as well as climate change criteria attests to the growing recognition by investors to the possibility that capital can make a difference. Agriculture, however, is an area that has a significant impact on climate change, and a large gap exists between the intention of investors and the actions that are needed to make a difference. This report and the accompanying case studies are an effort to bridge that gap, raise awareness, and hopefully catalyse private capital to areas where it is most needed.
Call to Action:
- Develop a Taxonomy for Sustainable Agriculture
- Address Training and Capacity Needs of Stakeholders
- Provide State Government Support for Basic Research in Climate-Resilient Agriculture
- Leverage Data and Technology to Increase Formalisation of AgTech Sector
Challenges in Scaling Up Sustainable Agriculture
- It is difficult to put large amounts of capital to work because of the smaller nature of most operations.
- An appropriate framework is lacking to evaluate projects along the impact and financial dimensions in a consistent manner.
- Awareness is low among farmers around climate-resilient farm practices. It is not sufficient to answer the question how climate-resilient agriculture benefits the environment. How it benefits the farmer also is essential.
- Projects have long gestation periods, which make them risky. The assets (i.e., landholdings) are difficult to collateralise, which makes banks reluctant to lend.
- Central banks do not account for climate-related risks in the computation of risk weights. Because banks are the largest source of financing, the lack of distinction between the status quo and climate-resilient agriculture creates obstacles in scaling up the latter.