22 Jan 2016 --- Just one year after its creation, the Livelihoods Fund for Family Farming is developing rapidly. New partners have joined the coalition and projects in Africa, Asia and Latin America will be launched in 2016. The historic global climate agreement struck at the 21st Conference of Parties (COP21) last month in Paris sent a strong signal to governments, as well as to the private sector and civil society, of the need for more green investment and innovative models.
The Livelihoods Fund for Family Farming is a concrete example of one such model that tackles environmental degradation, poverty and development, all while taking action to prevent climate catastrophe. Firmenich, the largest privately owned company in the fragrance and flavor business, and Veolia, the global leader in resource management that provides water, waste and energy solutions, announced today that they would join this fund, which allows business to play its part alongside government in preserving our planet.
Bernard Giraud, President of Livelihoods Venture, says: "The governments that met at the COP21 sent a strong signal worldwide on the importance of combating climate change. However, this important transformation will succeed only if all actors of civil society take action themselves- both individually and collectively. Business is one of the important actors of civil society that we need to drive this change. Livelihoods 3F provides them with an innovative model through which to contribute and play their part."
The challenge facing world agriculture today is to produce enough to meets the demands of our growing population despite the depletion of natural resources. Climate change impacts the food chain through pressures on natural ecosystem services essential for agriculture and water cycles. It also impacts the livelihoods of the 500 million smallholder farmers who produce raw materials. Launched in February 2015 with founding investors Danone and Mars, Incorporated, the fund aims to help companies sustainably source natural materials from smallholder farmers while delivering large-scale social and economic impact to those farmers.
Giraud tells FoodIngredientsFirst: “This fund ensures that smallholder farmers are trained on the most up-to-date and efficient practices in sustainable agriculture, which will allow them to restore their natural ecosystems and enrich their soil thus increasing their productivity and revenues,” he adds.
“Additionally, the fund will help enable farmers to gain access to the market to sell their goods at or above market rate. Better productivity leads to better incomes that leads to better livelihoods. Additionally, this fund seeks to increase global food security. Today, some 500 million smallholder farmers produce 70 percent of our world's food supply,” Giraud adds.
Livelihoods 3F will invest 120 million euros in its first phase to convert 200,000 farms to sustainable farming across Africa, Asia and Latin America. It will provide upfront financing and technical support to NGOs/farmers’ cooperatives that will implement projects in the field.
Giraud says: “We often forget that our existence and that of all living organisms depend on a 20-30 cm layer of topsoil from which plants draw their nutrients. This layer owes its fertility to the nature of the bedrock on which the soil has formed, as well as the amount of organic matter it contains. The main component in organic material is carbon (about 58%).”
“Worldwide, the equivalent of the surface area of Greece is deforested as a result of agriculture every year because of erosion and soil degradation. This leads to poverty and malnutrition, alongside the destruction of an invaluable natural resource- the reduction of carbon stock stored in these ecosystems,” he states. “For businesses, it is getting harder and harder to meet the needs of our growing populations- against the shrinking stock of natural resources lost to climate change,” says Giraud.
For Firmenich, the sustainable sourcing of ingredients from nature like vanilla, patchouli or mint is vital to its business. “Firmenich partners with smallholder farmers around the world to protect the best that nature can offer, while sharing its expertise to positively improve their livelihoods,” says Gilbert Ghostine, Chief Executive Officer of Firmenich. “Investing in the fund gives us the opportunity to scale up the impact of our responsible sourcing, building on the fund’s extensive network of likeminded NGOs and corporate partners.”
Veolia provides circular economy based solutions that enable the preservation of water resources and soil quality. It supports climate change mitigation, food security and helping farmers become more resilient. “Livelihoods 3F offers Veolia the opportunity to support high impact and empowering projects, sponsored by a community of local and international stakeholders,” says Antoine Frérot, Chairman and Chief Executive Officer of Veolia. “Veolia will support Livelihoods 3F thanks to its worldwide know-how on water management and natural resources conservation and will have the opportunity to continue to work, through this coalition, on sustainable farming and watershed management challenges.”
Livelihoods 3F will operate as a mutual investment fund with shared risks and results-based returns. Financial return for the fund’s investors will be provided by a coalition of private and public third party companies, public utilities, governments, development institutions, etc. that will purchase the goods and positive impacts (such as carbon credits or water savings) generated by the projects. Livelihoods’ public-private multi-actor coalition minimizes risks and decreases costs to each of its partners and provides a platform for knowledge exchange.
“Livelihoods 3F is an open investment fund. All businesses that want to source agricultural and natural goods in a sustainable way are encouraged to join us to increase the breadth of our learning and impact,” says Giraud.
Livelihoods 3F is set to launch its first project in 2016. It is actively structuring projects around key crops threatened by climate change like milk, vanilla, mint, cocoa and sugar.
by Elizabeth Kenward