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Important progress has been made in reducing poverty around the world. Nevertheless, as the 2030 Agenda for Sustainable Development has explicitly recognized, eradicating poverty remains a major challenge. In 2016, 767 million people were considered extremely poor, living on less than USD 1.90 a day (World Bank, 2016), and 795 million were undernourished (FAO, 2015a). Gains made in reducing poverty have not been even across the globe. Some regions still lag behind. Close to 85 percent of the world’s poorest people are concentrated in sub-Saharan Africa and South Asia (World Bank, 2016). Poverty is overwhelmingly a rural phenomenon. In 2017, 70 percent of the world’s extremely poor live in rural areas; 64 percent work in agriculture; and most of them rely on subsistence farming as their main source of income. For many poor households, their labour is their only asset. Globally, poverty ratios are three times higher in rural areas than in urban areas, and agricultural workers are four times more likely to be poor than workers in other sectors (World Bank, 2016). Agricultural production relies heavily on these small-scale, often poor farmers. In developing countries, these farmers produce most of the food. In Asia and Africa, for example, 80 percent of food production comes from small-scale farms (IAASTD, 2016). 

Agriculture, climate change and poverty are strongly connected. The impacts of climate change on agriculture disproportionately affect the poor, and impoverished communities are more exposed to hazards. Over 90 percent of the world’s poor live in risk-prone contexts (Global Humanitarian Assistance, 2015). These communities have less capacity to manage risk and cope with crises, and as a result, their assets and livelihoods, and their entire socio-economic environment, are more heavily affected by climate shocks (Rentschler, 2013;  Hallegatte et al., 2016). In the aftermath of a disaster, smallholder farmers may be forced to resort to what are known as negative coping strategies. To meet urgent needs, they may, for example, adopt unsustainable, environmentally harmful agricultural practices that deplete their long-term assets. A recent simulation study has looked at the potential impacts of climate change and their relationship with pro-poor policies. The study found that in the absence of pro-poor policies, by 2030, an additional 35 to 122 million people could be in poverty because of climate change. When factoring in pro-poor policies, the impacts of climate change would 'only' push 3 to 16 million people into poverty (Hallegatte, et al., 2016).

Given the strong links between climate change, agriculture and poverty, the promotion of  climate-smart agriculture should be integrated within national and sectoral policies and plans for relieving poverty and addressing some of its root causes. This is treated in greater detail in module C3 on policies and programmes. Investing in strategies to build resilience, including social protection, could save about USD 100 billion a year globally (Hallegate et al., 2017).

FAO has been working to develop a comprehensive approach to reducing poverty and building resilience. Social protection is a crucial element of this approach, and a key aspect of FAO corporate strategy. The Organization recognizes the contribution social protection makes to livelihoods and rural development strategies and resilience. Social protection serves to break the vicious cycle of social and economic deprivation, increased vulnerability to poverty and exclusion, and heightened exposure to threats and crises. Promoting decent employment in rural areas is also crucial for generating incomes and reducing rural poverty. FAO supports countries in the development of policies, strategies and programmes that foster the creation of decent employment opportunities in rural areas, especially for youth  and women. See also module C6 on the integration of gender equality issues in the conceptualization, design and implementation of climate-smart agriculture interventions.