Ensuring zero-deforestation approaches include smallholders’ perspectives and deliver environmental, social and economic benefits
Smallholders in the tropics produce a large share of the forest-risk commodities traded globally. With public and private actors increasingly committing to eliminating deforestation from supply chains, smallholders find themselves at the heart of a transition towards sustainable production. But how can smallholders invest in sustainable practices when they live below the poverty line and have limited access to finance? And how can large companies that buy products from smallholders help?
Some major companies that have committed to eliminate deforestation from their cocoa supply chains are encouraging smallholders and communities to implement zero-deforestation activities in exchange for technical and financial support. Yet for change to happen at scale, it is essential to understand the economic implications for smallholders. This is to ensure that these initiatives not only support the initial costs of shifting to sustainable production but also assess risks for smallholders and provide solid income diversification opportunities, alongside securing assets and building capacity. Such understanding is also key to ensuring that innovative financial solutions can scale up effective approaches.
As part of its efforts to mitigate climate change and implement its REDD+ national strategy, the Government of Côte d’Ivoire is implementing a forest-friendly agriculture policy. With assistance from the Facility, it is piloting a ‘payment for environmental services’ (PES) scheme to reintroduce trees in cocoa plantations and boost agricultural productivity, food security and living conditions of cocoa farmers while preserving forests and biodiversity.
The project, which started in 2017, is implemented through a public-private partnership with a major chocolate company. By December 2018, it had recruited 500 tree-planters and trained more than 900 cocoa farmers on agroforestry practices, such as growing seedlings and taking care of trees. They see agroforestry as a way to make their plantations more resilient to droughts and to diversify their revenues, in a time of volatile cocoa prices. Local women’s cooperatives run three nurseries set up to provide seedlings for the project, which is offering early lessons for future replication and scale-up.
The Facility also worked with the UN Environment Programme’s Finance Initiative (UNEP-FI) to propose to the Government of Côte d’Ivoire and its partners financial solutions for scaling-up zero-deforestation cocoa production. The Facility and UNEP-FI then convened representatives of the Government, smallholders and the corporate and financial sector — at domestic and international levels — to discuss ways to incentivise the implementation of zero-deforestation agriculture commitments. As a result, major international financial institutions started engaging in the design of innovative finance to support zero-deforestation production. A partnership is in the making to help the country mobilise private finance for sustainable commodity production in 2019.