Authors: Margherita Calderone, Ilaria Firmian, Sebastien Subsol
Affiliated organizations: Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED), International Fund for Agricultural Development (IFAD)
Site of publication : Braced
Type of publication: Report
Date of publication: September, 2019
The aim of this study is to draw on BRACED and ASAP examples and, more broadly, review evidence on initiatives investing in climate-resilient infrastructure to support smallholder farmer organisations and agri- businesses in the micro, small and medium enterprises (MSMEs) category and, ultimately, foster inclusive and sustainable agricultural value chains.
Climate-resilient infrastructure for agri-businesses
Infrastructure is essential for participation in value chains to upgrade economic structures. It can power farms and businesses, improve market access, connect workers to jobs and – if well allocated – help in reducing inequalities.
In addition, supporting the necessary complementary institutions and regulations, or so-called ‘soft infrastructure’, can address market failures in the value chain and assist in processes of economic transformation.
Surveys among small businesses identify poor infrastructure services, particularly electricity supply, as a relevant bottleneck, as important as insufficient access to finance (Page and Söderbom, 2015).
Given the nature of infrastructure,with high initial sunk costs and long service life (of one to two decades for small-scale infrastructure), there is a clear need to redesign and overhaul it to withstand the strain of recurrent droughts, floods, wind storms, warming temperatures, heat waves and changing climates.
Costs arise not only as a result of disasters linked to natural hazards: increased climate variability can create disturbances too. Moreover, infrastructure can influence adaptive behaviours – shifts in weather patterns may result in shifts in crop production and trade patterns – but the capacity to utilise trade in response to climate change depends on the availability of appropriate infrastructure – for example of suitable transportation and processing facilities.
Hence, investing in more resilient infrastructure is urgent and profitable. On average, climate change doubles the net benefits from investing in resilience, whereas making infrastructure users better able to manage disruptions can reduce the costs.
Given the nature of infrastructure,with high initial sunk costs and long service life (of one to two decades for small-scale infrastructure), there is a clear need to redesign and overhaul it to withstand the strain of recurrent droughts, floods, wind storms, warming temperatures, heat waves and changing climates
There appears to be increasing interest in supporting irrigation projects that serve climate change adaptation priorities. These include strengthening the management of small and medium irrigation structures, adjusting irrigation practices in response to transformations in production, protecting landscapes and conserving water resources, improving water use efficiency.
Using different value chain approaches, several recent studies show that the disruptive impacts of climate extremes and disasters on infrastructure can spread far beyond directly affected firms – especially as they become more specialised and interdependent – and ultimately generate systemic risks.
Discussion and final recommendations
According to Hallegatte et al. (2019), in fostering resilient infrastructure, the first recommendation is for countries to get the basics right in terms of proper planning of operations and maintenance and defining appropriate institutional mandates and strategies.
Hence, proper integration of climate change in the planning and maintenance of infrastructure at different levels should be consistent with countries’ national and local priorities and be supported by regional, national and community plans. This means that climate-resilient infrastructure investments need to consider the local context, especially the physical and human resources available. This requires integrating technical considerations with participatory approaches, and also ensuring equitable access to resilient infrastructure.
Resource mobilisation plays a crucial role in fostering risk-informed development and the development community should do more to find common financial and risk-transfer mechanisms. There is a need to better understand which initiatives and financing modalities are suitable for infrastructure investments at the local level
Moreover, new approaches for the design of climate-resilient infrastructure should enable more comprehensive assessments of spatial priorities, while risk appraisals should look beyond
asset losses and take into account secondary impacts on local communities, households and businesses. It is then essential to create, in cooperation with local authorities, new user-friendly climate services and mapping products suitable to solving current challenges.
Resource mobilisation plays a crucial role in fostering risk-informed development and the development community should do more to find common financial and risk-transfer mechanisms. There is a need to better understand which initiatives and financing modalities are suitable for infrastructure investments at the local level.
More broadly, ensuring that infrastructure decisions are made with a proper consideration of climate risks will require decision- makers at all levels in the public and private sectors to review their current approaches to infrastructure planning and project assessment. For this, there is a need to establish common data sources, which could be made available to the public, and to leverage the knowledge of the private sector.
Investing in data collection at regional or community level is also key, to improve the knowledge on variables such as water resources and deforestation trends. This kind of data can be critical to design climate-resilient and -smart infrastructure, which must be planned with a landscape perspective and a participatory approach, to include local governments and actors.
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