Towards a self-sufficient climate change mitigation and adaptation financing scheme for small farmers in Kenya.
Sustainable Agriculture Land Management (SALM) practices are methods experts have come up with to shield farmers against climate risks. They include adoption of clean energy technologies (solar, biogas), integrated pest management, waste management, agroforestry, improved animal feeding among others. SALM practices are a “double edged sword” that improves farm productivity and tackles climate change at the same time hence, improving farmers’ livelihoods. I was much privileged to have witnessed this while training at Vi-skogen/Vi Agroforestry in Kitale in their Livelihoods Mt. Elgon project. What a wonderful opportunity!
In this recognition, the scale up of such environmentally friendly approaches is crucial now than ever. And for this to happen, farmers need finance to adopt such practices since they involve huge capital outlays probably the reason why such projects are often donor funded in the developing world. Hence, to reap long running benefits, farmers need self financing mechanisms.
The backdrop is that despite noticeable progress in the financial sector, farmers still struggle to access credit. Mainly this is due to the underwriting models used give credit to borrowers that locks out farmers. The perception by lenders is that farmers are risky and costly to lend & as a result they are underserved. Nobody wants to touch them.
As temperatures rise beyond average and invasive pest outbreaks (locusts) persist, the urgent call for climate action still remains especially in the agricultural sector which is both vulnerable & a contributor to the climate problem. Therefore its important that farmers access finance to harness their potential in building resilience because the problem is here to stay (I believe so). However, the existing finance gap points a bleak future.
In the quest for solutions, an alternative market driven lending model presents an open door. There needs to exist a model that maximizes the advantage that farmers hold in their groups/farmer organizations especially on the principle of co-guaranteeing and risk diversification.
While engaging farmers on field days, I witnessed the solidarity farmers had in their respective clusters organized by Vi-skogen/Vi Agroforestry staff. They came to together to participate in the climate project. They contributed their land resources to establish field learning sites where their peers gathered to learn adaptation skills; they bulked milk in their respective cooperatives increasing their volumes hence improved bargaining power etc. This was a gesture that deprived groups could access essential services when they came together. Some farmers also contributed their resources towards welfare gains of their peers. Trust is what they build by coming together.
So, why cant we leverage such strong systems to deliver finance to them?
I believe that if they can convene in their clusters to mobilize resources for their social gains, then they could still mobilize their resources and diversify risk to suit crowdfunding models that serve their economic gains. And this is practical if we exploit the opportunity presented by the digital infrastructure in our country. We can leverage this capital raising model for the vulnerable cash strained farmers given the increasing rate of internet penetration and mobile phone proliferation.
