Globally, we are facing grand, complex challenges with regards to sustainability and inclusivity. To address these, we need to implement smart and holistic solutions. We have to look beyond the commodity level to understand how landscape innovation can contribute to sustainability. It is imperative to take gender equity issues into account, not just because we value inclusivity, but because there is a clear business case for including women. We need to look at how we can make our solutions more suitable to mitigating the negative effects of climate change. And, in one of our most prestigious programmes, we are exploring how the use of data and digital tools can increase the scale of our interventions and give farmers more ownership. Last, but not least, we are working on making new types of financial models, such as impact investment, to accelerate sustainable production.
IMPLEMENTING CLIMATE-SMART INNOVATION
Climate adaptation is key for farmer resilience. To combat the detrimental effects of climate change we are piloting climate-smart packages to enable farmers to sustain or increase yields in the face of climate variability and extreme weather events.
These packages advocate agroforestry systems in coffee and cocoa, improved water management practices such as solar drip irrigation in sugarcane programmes in India and Southern Africa, and introduction of trees and restoration of soils in pasture land in Novo Repartimento, Brazil and Irala Fernandez, Paraguay. In our coffee programme, we have developed climate-smart practices which include non-shade to agroforestry conversion, renovation (planting new rust-resistant varieties), improving tree density, rehabilitation (systematic pruning and 30% rotation in coffee plot), integrated fertilizer management based on soil analysis, soil erosion management by introducing cover crops, wastewater management with biofilters and biogas installations, and composting. Farmers who applied our climate-smart practices were much better adapted to cope with the effects of El Nino in 2016. These farmers made a profit in 2016 and 2017, while farmers using traditional open sun systems made substantial losses. Worldwide, Solidaridad has hired five additional climate experts who have been added to the Climate Innovation Taskforce with representatives from seven regional offices. The taskforce agreed on five climate contentious issues such as deforestation as topics for our climate positioning. The team have reviewed and scored 44 projects in the current Solidaridad portfolio on its climate mitigation and adaptation performance. The portfolio review feeds into the formulation of our innovative climate solutions in 2018.
DIGITAL SOLUTIONS DRIVE TRANSFORMATION FOR A SUSTAINABLE WORLD
Advances in technology create unique opportunities for applications in agriculture. Solidaridad wants to make use of these opportunities to improve the speed and scale of its programmes. In 2016, Solidaridad announced its intention to become a data-driven organization. Since then, Solidaridad has made important progress towards this goal by developing requisite tools and an organizational culture that acts on data.
Based on the success of Solidaridad’s Rural Horizons Programme, we have developed and tested digital solutions to support farmers, extension workers, cooperative leaders, and business partners. Going forward, our digital solutions will help to engage a higher number of producers, increase the frequency of interactions with farmers, and provide them with tailor-made information on how to improve their production system and connect to markets. In 2017, Solidaridad launched its first mobile application for farmers. The Farming Solution targets the social and environmental sustainability of smallholder production systems and is designed to foster farmers autonomy to identify, plan improvements, and monitor progress on their farms. The solution, which is accessible for everyone through their phone, was tested with sugarcane, cotton, and cocoa farmers in Brazil. Going forward, the application will be used by more projects throughout the network. Solidaridad began developing two new solutions which are to be released in 2018. The Business Solution focuses on the crucial agro-economic decisions farmers make, such as “Should I expand, intensify and replant?” and “What are the consequences for the demand of labour, fertiliser and credit?” The mobile application for this solution is currently being developed in South Africa and Ghana. The Extension Solution targets extension workers who support farmers to adapt and modernize their production systems. This solution facilitates data gathering as well as individual and group support to track visits and share targets. Development of this solution is currently underway in Brazil in cooperation with Solidaridad’s long-term partner Raízen, a leading sugarcane processor.
ATTRACTING PRIVATE INVESTMENTS TO SECURE LONG-LASTING IMPACT
Traditionally, our work has been funded by donors. While this model of grant-funding is necessary to develop solutions for more sustainable production, impact investment can bring these solutions to speed and scale. To achieve widespread, long-lasting impact, farmers and their suppliers need access to finance to grow and sustain their businesses. For investors to supply this, Solidaridad creates a solid pipeline of investible propositions that catalyse change that matters.
Our Impact Investment Team is comprised of 15 finance specialists who are focussed on all of the regions in which Solidaridad operates. At the end of 2017, the team worked on a pipeline of 28 opportunities and is now engaged with 64 impact investors, 35 of which are actively managed by Solidaridad. In 2017, we started to build our track record and documented two major deals. One of these demonstrates impact across the sugarcane sector in India, while the other reflects on our involvement in Agrofair, a wholesale company in organic fruit. We also secured 35 million euro in grant-funding for projects that include a business case and will lead to investment opportunities. Our main challenge has been to support investment readiness and create investment opportunities that fit into the modalities and investment focus of investors. The impact investment industry is still struggling to align with a shared vocabulary to define and segment the industry. In addition, there is a challenge to increase the availability of appropriate capital of different types and to engineer effective blended finance packages that fit into the high-risk profile of investments. The majority of our projects are innovation driven. These projects offer challenging investment opportunities as they are both high impact and high-risk. This means they are not always the "low hanging fruit" impact investors are looking for. As a result, we foresee that Solidaridad will work with a select group of impact investors going forward.
IMPROVING THE RESILIENCE OF LANDSCAPES AND LIVELIHOODS
Solidaridad recognizes that landscape challenges are a complex phenomenon. The most significant of these are land degradation, water scarcity, pollution and loss of biodiversity. We seek to bridge the gap between nature conservation and agricultural production through our work with small-scale farmers worldwide. We work to optimize ecological functions on and off the farm and make land-use inclusive and sustainable while restoring and reconnecting water, soil and biodiversity.
Towards this goal, we have implemented seven global landscape programmes across Asia, Africa and South America. The commodity value chains we focus on include palm oil, sugarcane, livestock, leather and cocoa. In these programmes, we improve the resilience of landscapes and livelihoods of producers through a number of mechanisms. These include capacity building, business engagement, and knowledge-sharing through multi-stakeholder initiatives. In India, as part of our landscape programme in the Ganges, we are collaborating with the government in the Kanpur province on jurisdictional approaches on actions around agriculture, water use and industry discharge. This initiative has attracted many players including investment partners in an effort to address pollution in the Ganges. Our work in this programme focuses on sustainable sugarcane production and clean leather development. While the results of this intervention are positive, there is still a long way to go. We need to develop business models to attract financial investments that will further the restoration of landscapes. In 2018, we will develop tools for landscape performance measurement, finance and investment. These tools will speed up data collection and build a stronger body of evidence to guide further interventions.
Mainstreaming Gender Inclusion
To ensure that gender is included in all our solutions, Solidaridad has established a Gender Taskforce, with representatives from across all regions in which Solidaridad operates.
Solidaridad believes that knowledge and skills in mainstreaming gender should be anchored throughout the organization. Towards this end, the Gender Taskforce developed the ‘Solidaridad Gender Training Toolkit’. As part of the toolkit’s design, a test run was conducted during the year across three continents – Asia, Africa and Latin America. Key findings conclude that there is a need for gender knowledge in all 52 countries in which Solidaridad operates. The co-designed training toolkit will be made accessible to both onboarding and continuing staff through e-learning opportunities. To ensure expertise is not isolated and made functional, gender learning will also be closely connected to staff roles and responsibilities. The gender policy developed in 2017 by Solidaridad will provide the framework for gender mainstreaming in both programming, and across the Solidaridad network. Indicators have been developed to support measuring progress at both levels.