The market value for sustainable agriculture products is predicted to rise to US$872.7 billion globally by 2020. This market growth is matched by an upward trend in sustainable agriculture investment, which has grown 32.5% annually since 2013. There are considerable green investment opportunities across the sector, from farmland and sustainable forestry to smart agriculture and improving yields for smallholders.
Developing structures to facilitate international investment in sustainable agricultural practices among smallholders can provide much needed incentives for both investors and farmers to shift their practices. Access to finance has long been a challenge for the agricultural sector due to inadequate enabling environments, lack of capacity to manage exposure to specific agricultural risk, and high transaction costs. Finance can be used to increase resilience and reduce emissions intensity in the sector, while banks and investors can also proactively require sustainable agriculture technologies and practices as a condition for financing. Insurance companies can also help to manage climate risks by allowing more flexible index payouts based on changes such as rainfall over time or average yield losses, rather than larger payouts triggered by crop failure.