Inclusive agribusiness models aim at benefitting broad layers of the farming population in developing countries, not only farmers in well-structured value chains, but also (remote) subsistence smallholders producing for local markets. Under climate change, inclusive business models also need to be made climate-smart to increase the farmers' resilience. In this paper we provide a brief review of the role of inclusive finance as an inherent as well as synergetic component of inclusive agribusiness models. Financial institutions have difficulty in reaching out to remote smallholders, and community-based organizations often lack capacity to upscale financial services. This limits many farmers in their capability to deal with increasing climate risks. Closing this finance gap requires innovations in delivery models, and in financial products and services. Developing such adapted products requires better insight into the financial lives of smallholders, particularly under climate change, for instance from further research into climatesmart financial diaries.
We assess the impact of community-based approaches to promote adoption of integrated climate smart agriculture (CSA) practices based on soybean cultivation combined with mulching, intercropping, crop rotation, manure application and rhizobium inoculation methods. We use quasi-experimental data of farmers participating in Farmer Field Business Schools (FFBS) and Village Savings and Loan Associations (VSLAs) in Iringa region of Tanzania. Farmers received technical training and financial support for the initial adoption of soybean production, and women's empowerment supported household's continuous involvement in CSA practices. We find a positive effect for farmers participating in the trainings provided by the FFBSs and receiving microfinance services from VLSA members on the adoption rates of several CSA practices, and this effect became more pronounced for households with higher scores on women empowerment. Farm-level improvement in soybean production and market-level incentives for soybean sales should also strengthen household income, consumption and nutrition levels to maintain CSA practices. Community-based platforms create critical external conditions for introducing CSA practices, but women's empowerment is indispensable for intrinsic incentives for anchoring their adoption.
There is a large and growing literature on the potential use of policy instruments for stimulating the adoption of Climate-Smart Agriculture (CSA) practices amongst smallholders. The objective of this article is to review and understand how the array of potential policy incentives can serve as mechanisms for enhancing adoption and upscaling of potential CSA practices by small-scale farmers in low-income countries. The review follows a matrix approach capturing where specific CSA practices (rows) are supported by typical policy instruments (columns) for enhancing widespread adoption. We first identify six key CSA practices, namely water management, soil and nutrient management, crop tolerance to stress, agroforestry and intercropping, crop rotation and mixed systems, and pest and disease management. Then we discuss the impact of those typical policy instruments, namely market prices, taxes and subsidies, land rights, rural finance, training and information, and certification and labeling. The review finds that most studies on this subject have a rather narrow focus on functional properties of a specific policy instrument and a particular CSA practice, thereby ignoring substitution, complementary or conditional effects between policy measures and CSA practices. Consequently, previous studies identify few incentives, particularly effective on their own. Wider perspectives on impact pathways point to the importance of sequencing and scaling for enhancing farmers' CSA adoption. We therefore advocate for more integrated approaches that also consider indirect effects of policy instruments on CSA adoption and pursue their systematic anchoring through successful policies that enhance widespread adoption.
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