A proven Business Case

300 % more food, 80% water savings, No CO2, Entrepreneurship through a commercial business model

A Call for Immediate Action: From Rhetoric to Scalable Results

At last year’s COP in Dubai, I heard a clear message: we must act now. It was encouraging—though long overdue—that food systems transformation was finally placed on the global climate agenda. More than $2.5 billion was pledged by the global community to support the food-climate agenda, and over 130 world leaders endorsed the declaration on food and agriculture.

However, reflecting on my participation as part of Sweden’s business delegation at this year’s Climate Week in New York, my conclusion is that the discussions remain stuck on why we need to act, rather than focusing on concrete measures being implemented. And my view is shared by many innovators.

I understand that resources are limited, but why are available funds not being deployed to scale the solutions and models that have proven to work? One reason is that funds – both public and private – unintentionally mold business ventures into myriads of funds with various purposes and scopes. How about putting trust in those who have invested in innovative solutions to solve societal issues and help us with what is really needed for lasting impact.

In the agricultural sector, where my company operates, the global community has for decades been incapable of finding ways to support those essential actors who make it possible to reach the last mile—the approximately 500 million smallholder farmers who are now suffering from droughts, irregular rainfall, and are trapped in outdated, fossil-dependent irrigation systems.

In the absence of existing solutions, we have taken over a decade and almost 10 MEUR to develop our own model that our collaborators consider groundbreaking. It creates entirely new opportunities for millions of farmers, and it does so in a sustainable and future proof business approach. Their impact reports provide hard evidence: Smart Farming turns farmers into entrepreneurs, generating business from increased yields and productivity.

We are now beyond the pilot phase. Our partners stand ready to scale up. This is where all actors in the blended finance scene need to step up.

The Kick Start

So, what is the challenge I want you to address? Our partners and their farmers in South Asia and Africa rely on global banks, local banks, that can issue credits on fair terms. Today, most banks ask for guarantees before offering these credits. If we want change to happen faster, we need to understand that risk focus should be replaced with innovative thinking and actions. Our partners and the farmers need an initial “kick-start” to become the IMPACT GENERATORS we all will benefit from. The risk will be low for everyone since Smart Farming ensures profitability throughout the value chain, including of course the farmers. The risk/cost of not acting is huge.

I want to see a COP29 where the fear of project failure is replaced by a focus on risk and reward. If global institutions and aid agencies act like commercial banks, why do we need them? Apart from providing the necessary financial framework, you should allocate resources and investments to help kick-start the process. In practical terms, the first steps are already taken, now scaling based on achievements is possible but needs your support to reach “the many millions opportunity”.

And let me be clear, we are not talking about capital that should be routed to small-scale farmers as "aid" or "subsidies," which, historically, have proven insufficient and doesn’t deliver relevant measurable impact. These funds should enable farmers without creditworthiness and organizations to invest on fair terms. Put simply, our “customers” don’t have a Walmart to buy their products from. But we know from our projects that, with innovative technology and local guidance and support, they can both afford to repay loans and be part of a sustainable value chain and business model.

And here lies the heart of the matter in a COP-context: low ambition won’t be enough; we must scale to millions and do it fast. However, as a company to grow in the local market, we need sufficient orders placed to risk investing.

I think it is time for a new way of thinking and acting. We therefore invite all relevant stakeholders—from the World Bank, IFC, National development agencies, private equity and other enablers to move into action. We invite with the full awareness of the serious opportunity cost of leaving millions of acres of land and farmers without the chance to earn a living while saving the environment as Impact Generators.

As part of the private sector, Spowdi and many of our peers, have done exactly what decision-makers have been asking for. We have created the technical solutions society needs to solve a critical issue. We have done so with considerable risk backed by private capital.

Now it’s time for you to do your part. See you at COP and for a prosperous future for smart farming.

Henrik Johansson

CEO, Spowdi

Tags: