Investment of USD 75 bn needed for Indian farmers to adapt to climate change impact: IFAD President

Time of India

06-07-2025

Investments worth around USD
75 billion
is required for
small-scale farmers in India
to adapt to the impact of climate change, and bringing finance to rural areas is a critical challenge ahead for rural communities across the world and in India, President of the International Fund for Agricultural Development (IFAD) Alvaro Lario said.
In an interview to PTI, Lario said for IFAD in India, the three big questions are, "how do we make agriculture more remunerative for farmers, how do we enhance productivity at the same time as we're tackling a lot of the climate shocks and how do we move from food security to nutrition security."
Founded in 1977 in response to a global food crisis, IFAD is a specialised United Nations agency and an international financial institution that tackles hunger and
poverty
in rural communities.
Asked about the impact of climate change on the rural sectors, especially on small and marginal farmers, Lario said it's a key focus.
"Small-scale farmers need approximately at least 75 billion US dollars to adapt to many of these climate shocks," Lario told PTI.
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According to the 10th agriculture census of 2015-16, small and marginal farmers with less than two hectares of land account for 86.2 per cent of all farmers in India, but own just 47.3 per cent of the farming land.
"In case of India we're seeing seasonal water scarcity, rising temperatures, more frequent droughts, so there's a lot of investments that can actually support these small-scale farmers globally. In global climate finance, what we're seeing is that these small-scale producers, hundreds of millions of rural people, are only receiving less than one per cent of the overall global climate finance," he said.
Lario lauded schemes like 'soil health card', and said it gives farmers personalised recommendations on how they can improve their soil health, as well as incentives to adopt treat irrigation and other water-saving technologies.
"The challenges remain and we're seeing that many of the farmers are still struggling to adopt some of the climate smart practices. So still we need to continue investing, we are investing with the government at the central and state levels in India," he said.
"For example in Maharashtra, in Meghalaya, Mizoram, Odisha, where we are bringing too many of these investments climate resilient practices that combine
sustainability
but also with income," he said.
He said it's important to focus on how these small-scale farmers can continue increasing their income through crop diversification, improved water management, or micro irrigation systems, and also creating community seed banks or using drought tolerant seeds.
"All of this is really gonna have a translation into better lives and better incomes," he said.
Lario said IFAD's priority is to mobilise financing, especially long-term financing for rural areas and deliver a long-lasting impact for those who need it most.
"We know that agriculture accounts for around 20 per cent of GDP in India and it employs around 42 per cent of the workforce. So even though there has been a lot of progress, we believe that continuing investing in pro-poor inclusive value chain and connecting small-scale producers to markets continues to be fundamental," he said.
He also stressed on bringing private capital into the sector.
"We're also trying to bring private capital, private local companies with the government by really bringing a partnership of the public, the private, and the producers themselves. We're also adopting agro-ecological approaches that are currently supporting commercially viable and sustainable value chains so that once more the goal is to improve the income of small-scale farmers and also the resilience to shock," he said.
Lario gave the example of Meghalaya, where IFAD has promoted and incubated a number of market-driven enterprises which are offering agri-entrepreneurs incubation, mentoring, credit, and access to markets.
In Mizoram, he said, IFAD is promoting integrated farming, bringing together crops, livestock, agroforestry, in community-led clusters.
"We're introducing weather-based crop planning which is also enabling farmers to align the sowing with the rainfall forecast thereby reducing climate risk," he said.
He said IFAD was the first UN funded programme which received two credit ratings, and currently they're issuing bonds that are being bought by pension funds and central banks all over the world.
"We are also bringing capital and investment, especially private capital to these rural areas," he said.
"We're currently using our own financing to co-invest with the private sector by directly investing in agri-enterprises, in local financial institutions and in value chain institutions that are very much serving small holder farmers," he said.
Lario further said the strategy is very much aligned with the Indian government's approach and over decades.
According to IFAD, it has invested over USD 1.5 billion in India in the last 45 years, reaching over 6 million families.
"Our focus has been very much on investing in women, in tribal communities, small-scale producers and also on strengthening community institutions," he added.