Agri-food Small and medium sized enterprises (SMEs) play an important role in the development of sustainable food value chains.  They provide near-by market outlets for small family farmers, as well as generating scarce off-farm rural jobs for young people. They are also familiar with local tastes and dietary habits, and can offer a variety of affordable and nutritional foodstuffs locally.  Small agro-manufacturing businesses are also important conduits of innovative green technologies that contribute to reducing waste, improving resource efficiency and reducing pressure on the environment. However, despite their potential role in adding value to rural economic development and the development of sustainable food value chains they are often underserved in the policy dialogue which tends to focus on production, trade and broader industrial development, failing to address the specific needs of small food manufactures operating in the agriculture sectors.  SMEs also tend to have restricted access to innovative technologies and finance, which limits their capacity to adapt and contribute to the reduction of climate and disaster risks. The adoption of climate-smart agriculture measures, that incorporate post-farm gate actors, will not only promote sustainable agriculture, but also strengthen the comparative advantage of agricultural value chains in regions that could be negatively affected by climate change and disasters to improve their trade position.  A FAO study revealed that good agricultural risk reduction practice/measure is 2.5 times better than usual practices under hazard conditions.

Results

In line with background, FAO organized a workshop on “Trade and Climate Change Policies - Stimulating Efficient, Inclusive and Sustainable Agricultural Value Chains” on 31 October 2018. The workshop aimed at (i) showcasing successful agri-SMEs practices and technologies that enhance their resilience to climate change and disasters; (ii) identifying trade and other policies needed to support inclusive agricultural value chains in the face of climate change and disasters; (iii) identifying policy options including in trade to stimulate/incentivize private sector investment to sustain agricultural value chains in the context of climate and disaster resilience; and (iv) identifying how private sector can mutually strengthen and support WTO agreements, the Paris Agreement and the Sendai Framework for Disaster Risk Reduction.

The events resulted in fruitful and interactive discussions between panelists and the audience.

Key messages from the discussion are as follows:

• Climate change increases production costs for SMEs and reduces return on investment: water logging leads to nutrient leaching; drought reduces yields; increased post-harvest loss, increased pest vulnerability; and delays in planting.

• Variety of climate-smart technologies and strategies used by SMEs to mitigate climate change include: (i) irrigation and rain water harvesting; (ii) reverse slope terraces; (iii) mixed cropping and crop rotation; (iv) minimum tillage; (v) short maturity crops; (vi) drought tolerant varieties; and (vii) skills and capacity development, particularly for the youth.

• Risk reduction and climate change mitigation is joint responsibility of public and private sectors – innovative approaches from Guatemala where climate change and environmental policy is developed through multi-stakeholder and multi-sectoral consultation in a Climate Change Council. Each responsible ministry actively contributes to the process. Climate change policy has been mainstreamed into the priorities of broad range of key ministries and public agencies. This however requires strong communication and coordination and climate change and risk reduction champions are needed.

• Investment needs to focus on promoting resilience and sustainability –  we need to invest in areas where we can do more with less. To do so it requires innovation and research to foster productivity increases. There is also a need to have more flexible research responsive to private sector needs. Risk management mechanisms are key to protect vulnerable actors in the agricultural value chain, particularly small farmers and SMEs. Finally, we need to promote an enabling environment such as innovations in Information & Technology (IT) for data collection and information sharing, education and capacity building and infrastructure.

• Various mechanisms provided by the World Trade Organization (WTO) to support private sector is a key information source in particular on data and information sharing. For example, it provides updated information on food safety, Sanitary and Phytosanitary Measures (SPS) and Technical Barrier to Trade (TBT) requirements before they become regulatory requirements. It also informs private sector before these become regulations and gives time to adopt and adapt. It helps traders overcome cross-border constraints e.g. through E-Phyto documentation.  A database of questions and concerns from private sector also is made available to facilitate information exchange to support the monitoring of trade concerns.