Enabling environments for climate-smart agriculture (CSA) are the framework conditions that facilitate and support the adoption of climate-smart technologies and practices. They include policies, institutional arrangements, stakeholder involvement and gender considerations, infrastructure, insurance schemes, as well as access to weather information and advisory services. An enabling environment may provide the laws, regulations and incentives, which assures that the reorientation and transformation towards climate-smart agriculture proceeds effectively and sustainably. It helps build institutional capacity at all levels and reduces the risks that deter farmers from investing in new technologies and practices. Experience has shown that investing in the enabling environment is essential for implementing CSA at larger scales.

Introduction

Small-scale farmers and pastoralists in low-income countries are often trapped in poverty because they are unable to make investments in improved agricultural practices due to weather-related risks. Agricultural insurance, an attractive approach to managing such risks, normally relies on direct measurement of the loss or damage suffered by each and every farmer. However, field loss assessment is costly and time consuming, particularly where there are a large number of small-scale farmers or pastoralists who can ill afford the inevitable delay in payments (Greatrex et al. 2015). 1

Index-based insurance, on the other hand, is a feasible alternative because it uses weather index, such as rainfall, to determine payouts for clearly defined hazards. The payouts can be made quickly and with less administrative costs and lower premiums than is typical for conventional crop insurance. Typical features of rainfall-based index insurance for crops are (IFAD 2015b): 2

• A specific meteorological station is named as the reference station.
• A trigger weather measurement is set (e.g. cumulative mm of rainfall), at which the contract starts to pay out.
• A lump sum or an incremental payment is made (e.g. a cash amount per mm of rainfall above or below the trigger).
• A limit of the measured parameter is set (e.g. cumulative rainfall), at which a maximum payment is made.
• The period of insurance is stated in the contract and coincides with the crop growth period; possibly divided into phases, with each phase having its own trigger, increment and limit.

For nomadic pastoralists in remote areas, an innovative approach using satellite imagery of vegetation ground cover (= fodder availability) is being pioneered in East Africa. (Greatrex et al. 2015, 1 Jay 2015, 3 Case study 2).

Contribution to CSA

• Productivity: Index insurance, often coupled with access to credit, allows farmers to take additional risks and to invest in improved practices that increase productivity and food security, even in a situation of adverse weather conditions.
• Adaptation through short-term climate risk management: In many parts of the world, rainfall is very variable both in total seasonal amounts and distribution patterns. Under such conditions, farmers inevitably experience the risk of livestock loss, crop yield reduction or crop failure. Index insurance is explicitly designed to manage such risks and, thus, makes a substantive contribution to farmers’ resilience.
• Adaptation through longer term climate risk management: Climate change projections suggest that in many regions, rainfall amounts are likely to decline and rainfall variability to increase. In such regions, index insurance will become an increasingly important adaptation strategy, but premiums may also have to increase.
• Mitigation: This will depend on the degree to which insured farmers are able to invest in improved production practices which either enhance carbon sequestration or reduce greenhouse gas (GHG) emissions.

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Introduction

The frequency and severity of extreme climate events - such as droughts, dry spells, heatwaves, storms and floods – is increasing globally under climate change. Small-scale farmers are especially vulnerable to weather variability, which can occur both between-seasons and within a season. Farmers who practice rainfed farming are particularly vulnerable to rainfall variability. As a result, most small-scale farmers rely upon traditional ‘coping strategies’ that have evolved over generations through long experience of natural variations, combined with their specific responses to the season as it unfolds. Such strategies are ‘risk spreading’ in nature. That is, they are designed to mitigate the negative impacts of poor seasons but usually fail to exploit the positive opportunities of average and better than average seasons (Cooper et al. 2008). 4 However, with enabling institutional support and policies, climate information (historical, monitored, and predicted), and the aid of advisories, this uncertainty can be reduced and farmers can be enabled to better manage risks and take advantage of favorable climate conditions when they occur. In addition, reducing vulnerability to climate risks in the present is necessary for adapting to climate change in the future, as vulnerable farmers are likely to experience climate change largely as shifts in the frequency and severity of extreme events.

Yet, a substantial body of research shows that the current availability of such information is not sufficient for smallholder farmers to benefit. Several additional challenges must be addressed, including (Hansen et al. 2011): 5

• Salience: bridging the gap between the content, scale, format and lead-time that farmers need, and the information that is routinely available.
• Legitimacy: giving farmers an effective voice in design and delivery of services.
• Access: supporting timely access and understanding for remote rural communities.
• Equity: ensuring that women, and economically and socially marginalized groups, benefit.
• Integration: connecting climate services to the broader agricultural development efforts.

In risk-prone environments, efforts to foster the transition toward climate-smart agricultural livelihoods must be supported by strategies, programs and policies that enable vulnerable populations to overcome the obstacle of climate risk through greater and timelier access to appropriate weather information and associated advisories.

Contribution to CSA

The provision of weather information and associated advisories contributes to CSA from several important perspectives;

• Productivity: Since climate-related risk is often a barrier to adopting climate-smart technologies and to making the transition toward more productive agriculture, effective climate services are part of the enabling environment for the transition toward more climate-smart agricultural systems. More adequate and timely weather information can help farmers take decision on timing and variety of crops increasing productivity.
• Adaptation through risk management: The effective use of weather information services contributes to resilience by enabling farmers to better manage the negative impacts of weather-related risks in poor seasons while also taking greater advantage of average and better than average seasons.
• Mitigation: By better matching the use of fertilizer and other production inputs with year-to-year climatic conditions, the existing evidence suggests that climate services can make a contribution to mitigation by supporting more efficient use of fertilizers.

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Introduction

Agriculture depends heavily on infrastructure and physical capital such as roads, equipment, and buildings; all of which can be impacted by extreme events. The potential economic loss triggered by such climate events may represent a serious threat for the agricultural sector. This is especially so given the high value of fixed assets compared to the average annual output and farm income. Therefore, it is necessary to develop preventative actions and instruments to cope with potential damage to agricultural infrastructure. Importantly, these actions must be tailored to regional characteristics if they are to be successful (EU Commission 2009). 6

An effective way to increase the resilience of rural infrastructure is to mainstream climate change adaptation techniques into policy, planning and budgeting. For example, changes to construction standards and building codes to adapt better to climate change may be needed to increase the resilience of infrastructure to extreme events such as storms and floods. Many effective “climate proofing” construction techniques are low cost and based on local technologies. In Bangladesh, for example, local innovation has given rise to a “climate-smart house”, which is cyclone-resistant as well as food-, energy-, and water-efficient. Other more national infrastructural responses to climate change include the redesign, relocation and rebuilding of major transport routes, bridges, dams or processing facilities. It is important that these major infrastructure projects are responsive to the changes that climate change will bring for the agriculture sector and that appropriate inter-sectoral policy-making is in place to ensure coordination.

In some cases, the appropriate response to climate change may be to reduce or adapt, rather than enhance or increase, infrastructure. For example, on the basis of climate change projections, national and local governments in parts of Europe are choosing to de-commission sea walls and allow currently farmed areas to revert to natural wetlands. Improving irrigation infrastructure is likely to be a key climate-smart agricultural investment in many countries. A landscape-wide planning approach allows, for example, irrigation systems to be integrated with natural wetlands and waterways that act as buffers against climate shocks, while also providing other environmental benefits.

Contribution to CSA

• Productivity: As with conventional infrastructural investments, investments in climate resilient infrastructure may help increase productivity, incomes (e.g. through better access to markets), and improve livelihoods. But contrary most conventional infrastructural investments it helps to protect these investments in the face of adverse climate change impacts.
• Adaptation: Climate resilient infrastructure is able to cope with short-term climate risks such as the increased incidence of extreme weather events. It also helps the agricultural sector transition in the face of longer-term climate change impacts, such as shifts in key growing regions (as in the case of coffee and cocoa).
• Mitigation: Investment in low carbon infrastructure can help reduce GHG emissions.

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Introduction

The creation and implementation of appropriate policies and an enabling environment is essential for achieving the widespread adoption of climate-smart agriculture (CSA). At the national level, climate change policies are generally expressed through national and regional strategies and plans including National Adaptation Programmes of Action (NAPAs), National Adaptation Plans (NAPs) and Nationally Appropriate Mitigation Actions (NAMAs). Agriculture and food security plans are often included in national development and poverty reduction strategies; trade, financial, agricultural and environmental national policy documents are also relevant.

Importantly, ‘policy’ should not only be defined as ‘government policy’. It should also include the policies and strategies of other actors, such as private sector actors and investors, regional and intergovernmental organizations, national and international civil society organizations, farmer organizations, and others.

In general, the objective in CSA policy engagement is to guide policies and remove components that act as disincentives for adopting CSA, such as public subsidies, while reallocating resources to programmes that provide incentives for the adoption of CSA. Policy tools and instruments, such as rural credit programmes, input and output pricing policies, subsidies, support for investment with public-good benefits, property rights, research and extension services, as well as safety net programs, can all be used to increase the incentives for the involved actors including farmers to modify production systems and build capacities for CSA (FAO 2013a). 7

An effective engagement in CSA policy requires a thorough understanding of power structure and policy decision making process on climate change at the national and local levels. Formulating CSA policies also requires a good knowledge of information needed by policy makers. To this end it is critical that specific information be tailored to the need of policy makers for an effective decision making process that ensures a good linkage between science and policy (McKinley et al. 2015). 8

Some key challenges can be identified in supporting the development of policies and enabling environments:

• Ensuring ownership by those responsible for defining and implementing policies and strategies, as well as by those whom a given policy might affect.
• Creating inter-sectoral approaches and consistent policies across sectors that can help create greater integration and coordination between sectors and actors.
• Ensure effective implementation of higher-level plans and strategies and inputs into national and regional planning by those operating at district or community levels, especially vulnerable groups.
• Finally, most policy processes are highly multi-dimensional, idiosyncratic, opaque and, especially in contexts with relatively weak governments, rarely truly problem-oriented but instead deeply rooted in politics.

Policy formulation and guidance tools include participatory assessments, multi-stakeholder scenarios and use of simulation models, multi-criteria analysis, participatory power mapping, companion modelling and participatory game design, methods to calculate participatory social returns on investment etc. Such methods can be used to provide concrete insights, while also being compatible with the systemic, inclusive approach needed for the improvement of CSA policy environments (Jordan and Turnpenny 2015). 9

Contribution to CSA

The guidance of policies, strategies and investments can have significant impact on the feasibility of scaling up CSA by removing barriers, creating capacities, empowering the vulnerable and making key resources available. Climate adaptation and mitigation policies can help provide the incentives for adaptation of specific CSA approaches, both for short-term risks and long-term impacts. More mainstream agriculture and development policies can include CSA-specific interventions, as well as interventions that bolster climate resilience and sustainable agriculture more generally. For instance, broader approaches can raise livelihoods and capacities by increasing productivity or improving various food system conditions, such as storage and access to market (Sova et al. 2015b; 10 Vermeulen et al. 2013 11).

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Introduction

Institutions are key to agricultural development and resilient livelihoods. They are not only an organising force for farmers and decision-makers, but are also the main means through which climate-smart agricultural practices can be scaled up and sustained (FAO 2013a). 7 As such, appropriate institutional arrangements are fundamental for the implementation of almost any other entry point discussed on this website.

Contribution to CSA

There are numerous possible ways to understand institutional support to climate-smart agriculture (CSA). Natural resource management and common property approaches often focus on informal institutions defined as local practices, rules and norms. Informal institutions encompass moral norms, rules and regulations, used both within and across organizations and communities (Ostrom et al. 2001). 12 Informal institutions are often addressed in community-based approaches dealing with collective action and decision-making as well as with access, rights and control over resources. However, local institutions are important in almost any agricultural development setting as it determines who may participate, how and to what extent. E.g. cultural practices and norms may dictate women’s access to information and innovation critical to the implementation of CSA practices and technologies (Meinzen-Dick R 2013). 13

While this is important, here, the focus will be on institutions as organizations at three different levels of scale, namely: (i) building local institutional frameworks, (ii) strengthening the key role of meso-level institutions, and (iii) working to enhance national institutional capacity to implement policy decisions. Other important formal institutions include regional or supranational institutions at different scales. Other non-traditional actors include market and private sector actors, such as insurance and agro-advisory companies; rights-based groups, faith-based organisations, etc. The nexus where these actors interact and impact CSA adoption is an additional institutional setting per se, but are not dealt with here.

1. Building local institutional frameworks: Support to climate change adaptation and mitigation among smallholder farmers rarely works when it is directed from outside or focused only on direct technology transfer. Local institutional frameworks for the adoption of climate-smart agricultural practices at district and community levels must be facilitative, rather than directive. That is, institutional frameworks that support farmer-driven adoption and adaptation must be encouraged (Agrawal et al. 2009). 14 Supporting such frameworks may involve developing new institutions but often the task involves creating connections between existing institutions to address uptake.

2. Strengthening the key role of meso-level institutions: Meso-level institutions, such as local governments and local state agencies, are critical for generating and canalizing support from national institutions to communities for climate change adaptation and mitigation. Yet, they often have limited authority and planning capacity, which also tends to be centralized. Furthermore, they have limited access to funding, which is often monopolized by national level institutions or stuck in administrative bottlenecks (Christoplos et al. 2014). 15 Therefore, a critical but often overlooked institutional entry point for supporting agricultural adaptation/mitigation is to enhance the mandate and access to funding of local governments, local state agencies and other institutions at the meso-level.

3. Working to enhance national institutional frameworks: Efforts to support CSA are constrained by a lack of the right institutions, institutional capacity and coordination at higher levels. Farmers need incentives and enabling conditions to make transformations on the ground, which must be facilitated by institutions and policies. State institutions are particularly important for the production and dissemination of information related to technology options and management methods, climate variability, and value chain conditions. Moreover, national institutions are key to providing safety nets and insurance schemes for farmers. Some options for enhancing institutional efficiency include building human knowledge and capacities, strengthening institutional procedures, integrating climate change and CSA into strategic plans and policies (e.g. NAMAS NAPAS, INDCs, national CSA plans, agricultural strategies etc.), strengthening institutional and sector collaboration horizontally and vertically, and analyzing options for deconcentration and decentralization (Anyonge et al. 2013). 16

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