Sustainably upscaling the safety nets for smallholders through technical assistance and investment in agricultural value chains.
Areas of intervention
Sub-Saharan Africa (80%), Asia, Latin America
EUR 55 million over 10 years, including EUR 18 million for the first phase of the programme from 2020 to 2023
- Swiss Agency for Development and Cooperation
- Luxembourg's Directorate for Development Cooperation and Humanitarian Affairs
- Grameen Crédit Agricole Foundation
SSNUP in brief:
Boosting the financing and technical assistance of stakeholders in the agricultural value chains in liaison with the technical assistance facilities of the programme’s impact investment fund partners to:
- Strengthen stakeholders in the agricultural value chains by encouraging sustainable management practices to generate revenues, create jobs and improve food security;
- Improve the productivity and resilience of smallholders by providing them with tailored financial solutions and encouraging sustainable agricultural practices in line with agro-ecological principles;
- Promote responsible investment in agricultural and food systems;
- Disseminate the results of experiments and the knowledge acquired among stakeholders in the sector.
SSNUP - Strengthening Smallholder Households Worldwide
Together with the Swiss Agency for Development and Cooperation and the Luxembourg Directorate for Development Cooperation and Humanitarian Affairs, ADA is coordinating a new programme to sustainably upscale the safety nets of smallholder farmers in Africa, Latin America and Asia by boosting the development of agricultural value chains. SSNUP (Smallholder Safety Net Upscaling Programme) spans ten years with an overall budget of EUR 55 million. The programme draws on the knowledge and expertise of the technical assistance facilities of impact investment funds already active in the field in order to devise, test and develop financial and non-financial solutions for agricultural risk mitigation and transfer for the various stakeholders in the value chains.
Improving the safety nets for smallholder households
Agricultural productivity has for centuries driven improvements in living standards and well-being, however developing countries still face significant challenges such as rising undernourishment, low farming productivity and harsh climate change related events (World Bank 2019). With 80% of the world’s poor living in rural areas and an estimated 500 million of them being smallholder households involved in small-scale and low productive farming, the challenge is significant (World Bank 2016).
The smallholder households face a whole range of challenges in accessing resources, technology, inputs, financing and market information, and are very vulnerable to external shocks, such as extreme weather events and price volatility. Since growth of the agricultural sector is a key factor in reducing poverty, it is essential to reinforce and improve the safety nets for these important stakeholders.
In order to respond to the needs of the smallholder households, the Luxembourg and Swiss development agencies along with Lux-Development, and in collaboration with ADA, have launched the Smallholder Safety Net Upscaling Programme (SSNUP programme). The aim of the 10-year programme is to strengthen sustainably the safety nets of 10 million smallholder households resulting in an improved well-being of altogether 50 million low-income and highly vulnerable people through a systemic agricultural value chain development approach.
The programme focuses on 3 specific outcomes, each one integral to the overall objective of the programme:
- Smallholder households will enhance their productivity and/or resilience by using improved agricultural risk mitigation and transfer solutions, and adopting more sustainable and climate-smart farming practices in line with agro-ecological principles
- Agricultural value chains will be strengthened by adopting more sustainable environmental and social business practices that generate increased income and jobs, as well as enhanced food security
- Investments will increase and finance the expansion of agricultural value chains that comply with the global responsible agricultural investment principles and adopt sustainable environmental, social, and good governance standards
Encourage the development of agricultural value chains
In order to support the growth and development of the agricultural sector, a holistic approach is needed that not only supports the main stakeholders in the agricultural value chains by providing them with technical assistance, but also mitigates the risks that are so prevalent amongst all actors, but especially the smallholder households.
With this in mind, SSNUP focuses on innovative collaborations between public and private development actors, governments, impact investors and technical service providers, for agricultural markets in developing countries.
The objective is therefore to co-finance technical assistance projects that on the one hand, aim to implement tailor-made farm risk mitigation and transfer instruments through SMEs, agricultural cooperatives, MFIs in rural areas and other agricultural financial intermediaries, and on the other hand promote climate-smart farming practices in line with agro-ecological principles that will reinforce existing agricultural value chains and improve the safety nets of smallholder households.
The focus is on increasing the productivity, income and resilience of these smallholder households, and on facilitating business transactions between them and the various stakeholders in the agricultural value chain.
Share the knowledge and lessons learnt
A very important component of SSNUP is the collection, management and dissemination of data, information and lessons learnt emerging from the projects being implemented with the funding. By measuring the outcomes and impact of the programme and sharing good (and bad) practices, success and failure factors, as well as promising innovations, the programme also aims to bring useful knowledge to the sector and foster the development of even more solutions that mitigate agricultural risk and strengthen all actors of agricultural value chains in developing countries. As well as coordinating the programme, ADA is responsible for these knowledge management and dissemination activities in partnership with organisations such as the International Institute for Sustainable Development (IISD), the Council on Smallholder Agricultural Finance (CSAF) and/or the Microinsurance Network, the latter also based in Luxembourg.
How is this innovative programme implemented?
The programme aims to leverage knowledge and partnerships within targeted agricultural value chains where technical assistance facilities and their impact investors are active or plan to be active. SSNUP provides technical assistance not only to strengthen the safety nets of smallholder households, but also to encourage investors to consider new investments, in new countries or regions which in turn will result in an increase in investments in agricultural value chains. By targeting companies already in the portfolio of impact investors or among their prospects, SSNUP can direct funding towards technical assistance projects much more efficiently, with no need for detailed due diligence. This win-win situation will not only help direct more SSNUP funding towards technical assistance projects that will ultimately benefit smallholder households, but will also de-risk investments and thus contribute to the growth of responsible financing in the agricultural sector.
Impact investors who have already joined SSNUP include the Grameen Crédit Agricole Foundation, Incofin, Oikocredit, responsAbility, and Symbiotics. All these partner funds, whose total assets under management vary between EUR 92 million and EUR 3.5 billion, have already some active investments in agricultural value chain in their portfolio and work with technical assistance and capacity-building facilities to support their investees. As SSNUP is rolled out, other impact investors will be invited to join the programme and increase its impact.
SSNUP, an array of international stakeholders working together with a single purpose —> to strengthen the safety-net of smallholder households
- Funders: SSNUP is funded by the Swiss Agency for Development and Cooperation and the Luxembourg Directorate for Development Cooperation and Humanitarian Affairs, in partnership with Lux-Development.
- Impact investors: Grameen Crédit Agricole Foundation, Incofin, Oikocredit, responsAbility and Symbiotics, whose total assets under management vary between EUR 92 million and EUR 3.5 billion, account for between 10% and 100% of active investments in rural areas, have partnered SSNUP to improve the technical assistance of their agricultural investees.
- Technical assistance facilities of impact investors: they design projects to upscale the capacities of investees, SMEs and agricultural cooperatives, and to boost the agricultural value chains that benefit small-scale producers and farmers.
- Programme coordinator: ADA ensures collaboration between all the stakeholders and oversees implementation of SSNUP programme.
- Knowledge management and dissemination partners: organisations such as the International Institute for Sustainable Development (IISD), the Council on Smallholder Agricultural Finance (CSAF) and/or the Microinsurance Network will help build and disseminate content emerging from the projects.
The global goal of SSNUP is to strengthen sustainably the safety nets of around three million Smallholder Households resulting in an improved well-being of altogether 50 million low-income and highly vulnerable people.
The SSNUP aims at making a significant and lasting contribution to the Sustainable Development Goals!