‘No system is more­re­si­li­ent than nature’

The Landscape Resilience Fund collects private and public funds for small agricultural enterprises in developing countries in the southern hemisphere so they can adapt to the impact of climate change.

Small-scale farmers are inte­gral to the global food supply, produ­cing 80 per cent of all the food consu­med in deve­lo­ping count­ries and 30 per cent of all the food consu­med in the world. Accor­ding to Urs Diete­rich, Mana­ging Direc­tor of the Land­scape Resi­li­ence Fund (LRF), this makes them key to guaran­te­e­ing the sustaina­bi­lity and resi­li­ence of the agri­cul­tu­ral sector so that it can absorb the impact of climate change. And yet this is a vulnerable group that doesn’t have access to tech­no­lo­gi­cal inno­va­tions or bank loans like larger compa­nies. It’s precis­ely these small­hol­ders that the fund set up two years ago is focu­sed on. It coll­ects funds from private and public donors to support SMEs in deve­lo­ping count­ries in the southern hemisphere. 

This support is earmarked for enter­pri­ses working in agri­cul­ture or forestry that source their products directly from local small­hol­ders, are commit­ted to promo­ting sustainable deve­lo­p­ment in their region and are willing to offer small­hol­ders rele­vant trai­ning opportunities. 

The LRF made its first invest­ment 18 months ago in ‘Koa’, a busi­ness in Ghana that proces­ses the cacao pulp that surrounds the beans in the pod. ‘The juice is consu­med as it is or turned into a powder that can be used as a sugar substi­tute in the food indus­try,’ explains Diete­rich. ‘Koa is gene­ra­ting added value using a raw mate­rial that was previously discarded or left to rot in the fields.’ For small-scale farmers, this boosts profits by 30 per cent without any addi­tio­nal expen­dit­ure. The Ghana-based busi­ness used the two million Swiss francs allo­ca­ted by the LRF to set up state-of-the-art produc­tion faci­li­ties, crea­ting jobs for locals in the process. ‘Koa origi­nally worked with 1,800 small-scale farmers and that figure has alre­ady increased to 3,000. We’re expec­ting it to jump up to 10,000 within three years,’ says Dieterich.

Using the pulp from the cacao plant as a sugar substitute.

Blen­ded finance

The LRF was laun­ched by WWF and climate consul­tancy South Pole in 2021. It’s finan­ced by an inter­na­tio­nal luxury goods company as the anchor inves­tor and the Global Envi­ron­ment Faci­lity (GEF), which Diete­rich says is pionee­ring in climate adapt­a­tion. ‘Climate resi­li­ence is still not being talked about enough and is rely­ing almost exclu­si­vely on state funding.’ The fund was also set up with the aim of finding more private inves­tors. This is what Diete­rich calls ‘blen­ded finance’, which invol­ves funding coming from various sources. 

The LRF, which is regis­tered as a foun­da­tion in Switz­er­land, combi­nes phil­an­thro­pic impact with profi­ta­bi­lity. Compa­nies like Koa have to pay back their loans with a mode­rate inte­rest rate applied. ‘As a foun­da­tion, making a profit isn’t our main prio­rity,’ says the mana­ging direc­tor. The LRF wants its invest­ments to empower compa­nies to set them­sel­ves up for long-term busi­ness success. In turn, those compa­nies will be able to attract other inves­tors. The idea is that LRF, as a credi­ble inves­tor with strong social and envi­ron­men­tal values, acts as a cata­lyst and encou­ra­ges other donors to get invol­ved. ‘The LRF has three focus areas,’ says Diete­rich. ‘We help SMEs in count­ries in the southern hemi­sphere to extend their capa­city so they can become profi­ta­ble busi­nesses, we provide loans, and we bring toge­ther local stake­hol­ders who want to make a posi­tive impact in their region follo­wing a land­scape approach.’ Along­side the envi­ron­men­tal focus, this work also addres­ses social aspects, such as promo­ting gender equality and sharing know­ledge about climate adapt­a­tion with small-scale farmers. 

Cacao farmers in Ghana during the harvest. Both beans and cacao pulp are used.

Actions with multi­ple benefits

The fund’s primary objec­tive is making enter­pri­ses working in agri­cul­ture and forestry more resi­li­ent to climate change. In this context, resi­li­ence isn’t about simply accep­ting climate change. Diete­rich, who hims­elf has a degree in Forest Science, firmly belie­ves that efforts to coun­ter climate change are important. But the reality is that the agri­cul­tu­ral sector isn’t in a posi­tion to prepare for extreme events like droughts or floods – no matter how hard it tries. The good news is that some actions can have multi­ple bene­fits. Small-scale farmers that swap mono­cul­ture for biodi­ver­sity will be more resi­li­ent finan­ci­ally because they won’t be hit as hard by crop fail­ures. They’ll also be impro­ving soil ferti­lity, which will increase their crop yields. Plus, healthy soil can store more water and CO2. That’s a posi­tive in the fight against the climate crisis. Diete­rich belie­ves that people can learn so much from nature: ‘No system is more resi­li­ent than nature, which has alre­ady adapted to climate change many times in the past.’ 

Deve­lo­p­ment phase complete

The Land­scape Resi­li­ence Fund has alre­ady taken seve­ral SMEs in the southern hemi­sphere under its wing since it was laun­ched. Along­side Koa in Ghana, a company in Tanz­a­nia working with small-scale farmers to produce certi­fied orga­nic spices has also bene­fi­ted. Support is also being provi­ded for the sustainable deve­lo­p­ment of vulnerable land­scapes in Brazil and Viet­nam. The foun­da­tion supports ongo­ing opera­ti­ons and also allo­ca­tes advance payments to allow SMEs to deve­lop their busi­ness with a speci­fic focus on climate change. That’s a risk that inves­tors aren’t willing to take if all they care about is making a profit. Accor­ding to Diete­rich, the deve­lo­p­ment phase is now over after two years. The foun­da­tion is ready for the next stage, which will involve coll­ec­ting even more funding to add to the ten million dollars alre­ady recei­ved in dona­ti­ons to make a real impact. 


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