Last month, at the Skoll World Forum, I was moved by a powerful video, Hanging in the Balance, the Future of a Forest, about the efforts of four organizations fighting deforestation in the Amazon Rainforest: the Amazon Conservation Team, Forest Trends, Gaia Amazonas and Imazon. Using cutting edge mapping technologies, market-based approaches and other innovative strategies, these organizations have helped slow the rampant destruction of one of the most beautiful and biodiverse regions on earth. As a result, they’re reducing greenhouse gas emissions from the third largest driver of climate change, deforestation.
Root Capital has also been working to slow deforestation in the verdant Andean-Amazon region. Over the past decade, we’ve financed hundreds of small and growing businesses that source from hundreds of thousands of farmers using agroforestry and organic farming techniques which sustain ecosystems and build resiliency against climate change. Agroforestry systems produce myriad environmental benefits from absorbing carbon and maintaining soils to promoting biodiversity.
In celebration of Earth Day this month, I’ve been reflecting on how Root Capital can increase its efforts to help our clients develop climate-smart agricultural practices that conserve natural resources and boost yields, while helping farmers become more resilient to increasingly erratic and extreme weather.
Beyond supporting agroforestry systems, we’re financing clean technologies like sub-foliar drip irrigation and solar dryers, and local African entrepreneurs producing high-yielding, drought resistant seeds. We also finance producers of shea nut butter, which helps preserve the Shea trees that are the last line of defense against encroaching desertification in the Sahel of West Africa. I believe that scaling climate-smart farm practices like these at the smallholder level will help tremendously to drive sustainable natural resource management in vulnerable ecosystems, while providing more stable income for farmers.
Moving forward, we’re developing lending models for other climate-smart technologies and practices, from coffee tree renovations and high-efficiency coffee-washing stations to bio-digesters and payment for ecosystem services (i.e. carbon credits). We're also experimenting with innovative mapping techniques that will enable us to better anticipate how climate change may impact our clients.
I look forward to reporting on Root Capital’s progress in this vital area during the year. Thank you for your support.
William Foote, Founder and CEO
Video: Empowering Women through Shea Butter Production in Ghana
The shea tree is unique to Africa and forms part of the "Green Belt," a forested area that helps stem the southward creep of the Sahara Desert. Traditionally, the activity of collecting shea nuts and processing butter has been women’s exclusive domain, and the income earned from shea butter is theirs alone.
By financing shea butter producers, Root Capital not only supports women, but also helps conserve the Sahel ecosystem. Increasing the value of Shea trees prevents them from being cut for firewood or cleared for farming, allowing them to maintain soils, retain rainwater, produce shade and absorb carbon emissions.
Interview with Frank Hicks, Senior Advisor to Forest Trends and Root Capital Board Chair
Frank Hicks is Manager of Forest Trends’ Ecosystem Services Incubator for Africa and Root Capital’s Board Chair. We spoke with him about the emerging field of climate-smart agriculture, an approach to sustainable development with three components: increasing farmer productivity and incomes, enhancing resilience of livelihoods and ecosystems, and reducing and removing greenhouse gas emissions.
RC: What’s the current thinking on climate-smart agriculture?
FH: It’s early days. I believe the term was coined in just the last few years, but the concept is resonating with various constituencies. The main focus currently is about understanding what the effects of agriculture are on the environment. The awareness of agriculture being responsible for 25 percent of greenhouse gas emissions globally, and the need to address agriculture as a major driver of deforestation, has come to the fore in recent years.
A lot of the focus now is on trying to understand the greenhouse gas and water footprints of various agricultural supply chains. I think there’s a growing awareness that you’re not going to be able to address climate change in developing countries without having a strategy for agriculture and that often the climate change goals that countries espouse are at cross purposes with agricultural goals for increasing yield and total production.
RC: Are there well-defined practices for climate-smart agriculture?
FH: There’s not a well-defined set of practices, but there are good examples. And, there’s a huge need to develop those practices, to implement them and to measure their impact on climate change over time.
In coffee and cocoa, most people would agree that having agroforestry systems with more trees, with the right varieties and the right shade management—taking into account factors such as humidity, average temperature, and the relationship with the control of fungal diseases—is a better way to go. You might sacrifice short-term productivity but you probably ensure better resiliency, lower costs, and perhaps better longer-term returns.
The work Root Capital is already doing on hybrid varieties of maize and other cereals in Africa is a very good example of climate-smart agriculture where you’re increasing yield and increasing resilience to climate change.
RC: How is Root Capital advancing climate-smart agriculture?
FH: I think the fact that there’s Root Lab and the Innovation Fund where the organization tries new things, and measures the impact and learns, is cutting edge. The fact that Root Capital is already lending for hybrid seeds, clean technology, drip irrigation and water efficient coffee and other processing; cocoa, coffee and agroforestry; shea nuts wild-crafted from native habitat; sustainable timber in Peru and sustainable fisheries in the Gulf of Mexico—these are all examples of what the organization is doing right.
I believe that Root Capital is well positioned to be more proactive in identifying practices and technologies that will have greater effects, on a commodity by commodity or region by region basis.
Just hybrid plants (i.e., grafted seedlings) would be huge. If you had people in Africa plant hybrid cocoa that was selected for climate resilience that would be significant. Everyone does it in West Africa for mango and citrus, but not cocoa. It’s not rocket science; it’s just people with a razor blade and grafting tape.
New and Noteworthy
CGAP launched its blog series on climate-smart financial services with a guest post by Root Capital Senior Lending and Strategy Associate Jesse Last on climate-smart agriculture.
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