Ideas are the lifeblood of innovation. To accelerate rural transformation while tackling rural poverty, food insecurity, nutrition, job creation and climate change, innovative ideas are needed. That is why IFAD in partnership with the Global Innovation Lab for Climate Finance (the Lab), launched a contest in 2018 to crowdsource ideas and unlock investments into sustainable agriculture in West and Central Africa. Investors and development partners have evaluated the candidates, and this month two winners emerged:
Bringing climate risk insurance to smallholder farmers
The first idea comes from Sprout Insure, a Germany-based start-up engaged in providing climate risk insurance to smallholder farmers. The proposal – Blockchain Climate Risk Crop Insurance – is an automated weather-indexed crop insurance infrastructure to help smallholders increase their resilience to the impacts of climate change, via transparent, affordable and efficient insurance tools. It will guarantee automatic pay-outs whenever an extreme weather event occurs through the use of smart contracts that are implemented on a blockchain – a system for recording transactions in digital currencies throughout a network of computers.
By creating templates for blockchain-based insurance products, the platform can give farmers, cooperatives, donors, buyers or even end-consumers the tools to create their own customized insurance product at a far lower cost. For the first time, risk-sharing processes could be placed in the hands of beneficiaries, supported by fixed and secure smart contracts. In comparison to dealing with a remote, traditional insurance company, the customer experience could become direct, immediate and automated.
Promoting climate smart agriculture
The second winning idea, the West African Initiative for Climate Smart Agriculture, aims to promote climate smart agriculture and resilient supply chains to achieve food security across 15 countries in West Africa. Proposed by the Commission of the Economic Community of West African States (ECOWAS), it works through the provision of grants for technical assistance and subsidized-rate loans or guarantees for smallholder farmer organizations and the agricultural private sector.
The ECOWAS Commission is uniquely positioned to mobilise large scale public and private investments. Loan conditions will be linked to sustainable agricultural practices, with preferential terms for women and youth. According to the proposal, scaling up climate-smart agriculture practices would help ensure adaptation to climate change to improve food security; for example in Burkina Faso, scaling up on 10 per cent of available land would store up to two million tonnes of carbon and feed more than 1.2 million people.
Unlocking investments for sustainable agriculture
These two ideas will receive support to unlock investments for sustainable agriculture and generate impact on the most vulnerable rural communities in West and Central Africa.
“West and Central Africa is a land of opportunities where more than 300 million smallholder farmers play a vital role in contributing to food security, nutrition and economic growth. However, these people are facing increasingly complex and interrelated challenges such as increased climate impacts, land and ecosystem degradation, conflict over resources and migration. We need to address these issues, and this is why IFAD has partnered with the Lab: to crowdsource, co-create and jointly apply innovative and sustainable solutions to leverage more of both private and public resources for the region’s smallholder agriculture,” says Margarita Astralaga, Director of IFAD’s Environment, Climate, Gender and Social Inclusion Division.
Every year the Lab launches cycles to gather ideas and develop the most actionable, innovative, catalytic and financially sustainable ones, having mobilized over US$1.4 billion since 2015. IFAD joined forces with the Lab in 2018 to introduce a thematic work stream focused on sustainable agriculture for smallholder farmers in West and Central Africa. This crowdsource-style approach has been adopted by IFAD thanks to funds from the second phase of the Adaptation for Smallholder Agriculture Programme (ASAP 2), which promotes innovative efforts for climate-resilient agriculture across developing countries.
Through the 2018-2019 cycle, the two winning ideas for sustainable agriculture have come with four successful proposals targeting the other three thematic streams: sustainable cities, energy access, and blue carbon in coastal and marine ecosystems. The selection was made by IFAD and other Lab Members, who include over 60 institutions in government, development finance, philanthropy, and the private sector. The contest had a record high number of 250 proposals submitted by leading development finance institutions, global NGOs, and entrepreneurs.
Read the original story on IFAD’s website here.