Sharm el-Sheikh, 11 November 2022: A new report which was co-produced by the World Business Council for Sustainable Development (WBCSD), the Sustainable Rice Platform (SRP) and the Just Rural Transition (JRT), with technical input from the Food and Agriculture Organization of the United Nations (FAO), was launched at a Good Food Finance Network (GFFN) press conference at COP27 on 11 November.
The "Scaling private sector investment in sustainable rice: Needs and opportunities" report finds that finance models that can successfully scale up investment in sustainable rice will require strong partnerships involving a range of public and private actors with different appetites for risk and return. To ensure that farmers are not left behind in the shift to regenerative food systems, a mix of funding sources and instruments will be required, the most catalytic being long-term patient capital and de-risking using concessionary finance and technical assistance. Together, these efforts will transform rice production – which currently emits more greenhouse gases than the aviation industry – into a sustainable agrifood system.
Two new finance tools are already being developed based on the report’s findings. A blended finance facility funded by the Global Environment Facility (GEF) is currently being designed and will be piloted in Bangladesh, Cambodia and Vietnam. The facility aims to catalyze public and private funds for climate-resilient rice farms, value chains and livelihoods. Partners are working on designing the facility’s integrated financing mechanism, developing local and national stakeholder capacities and establishing impact monitoring of the facility.
The second finance tool is an accelerator for nature-based rice solutions. Due to be launched in 2023, this platform will leverage the rapidly expanding carbon markets to increase private-sector funding for sustainable rice production. It will engage businesses, address challenges to funding and provide companies interested in investing with the necessary technical support and guidance needed to mobilize high-quality credit generation.
Victoria Crawford, Investment Partnerships Lead at the Just Rural Transition, said: “Rice production is crucial for global food security and nutrition and provides livelihoods for nearly a billion people. However, the way rice is typically produced has a substantial environmental impact, including emitting 10% of global methane and consuming 40% of global irrigation water. This jeopardizes the long-term viability of rice farming and the communities that depend on it.
“Farmers need access to finance, technical assistance and services to adopt tried and tested approaches to improving rice sustainability, such as better water management or improved rice varieties. By improving the flow of capital into the rice sector, these new finance tools will make a real difference for farmers – whether that’s by lowering interest rates for new equipment, extending access to weather advisories and early warning systems or enhancing post-harvest infrastructure to reduce food loss.”
Tony Siantonas, Director, Scaling Positive Agriculture, WBCSD, said: “The widespread adoption of proven and investment-ready sustainable rice production techniques will transform rice value chains. This will be critical to meeting global climate, nature, inequality and nutrition goals. However, rice landscapes pose particular challenges for investors, including small farm-level funding requirements, limited demand for sustainable rice and the need to provide comprehensive support to farmers, such as technical advice, market linkages and financial inclusion.”
Dr Wyn Ellis, SRP Executive Director, said: “With rice attracting increasing attention in the global climate change debate, this report offers a timely and authoritative review of the opportunities and challenges of financing a transition to sustainable rice production. Innovative finance mechanisms will be essential to catalyze a sector-wide transition to sustainable rice landscapes, focusing on the funding needs of farmers, businesses and governments. The Sustainable Rice Platform and Sustainable Rice Landscapes Initiative look forward to engaging with our partners in the finance and development communities to unlock these opportunities.”
