We Can’t Meet Our Climate Goals Without Financing Agrifood Systems

By Kaveh Zahedi
ROME, Sep 5 2025 – Despite absorbing a quarter of climate-related losses and having the potential to reduce one-third of global emissions, agrifood systems receive less than 8% of climate finance. This imbalance threatens progress in addressing global climate challenges. If we’re serious about solutions, we need to start where the impact—and the promise—is greatest: investing in the systems that feed the world.

As countries move forward along the Baku to Belem Roadmap and the collective goal of mobilizing $1.3 trillion in climate finance by 2030, a critical juncture is fast approaching. At the upcoming Standing Committee on Finance Forum, to be held at the headquarters of the Food and Agriculture Organization of the United Nations (FAO) in Rome, governments will have a chance to correct this imbalance – and seize an opportunity that is already yielding results.

No serious path to achieve climate goals exists without agriculture. Yet despite this central role, the sector remains chronically overlooked in climate finance strategies and often is associated only with high perceived risks instead of its potential.

No serious path to achieve climate goals exists without agriculture. Yet despite this central role, the sector remains chronically overlooked in climate finance strategies and often is associated only with high perceived risks instead of its potential

The result is a persistent underinvestment in one of the few areas where mitigation, adaptation, and development gains can be achieved together—and at scale. Strategic investments in agriculture can strengthen national resilience, deliver measurable climate mitigation, reduce inequality, and expand economic opportunities.

Small-scale producers, who grow a third of the world’s food, received less than 1% of climate finance in the most recent two-year window. Livestock systems, which are major contributors to methane emissions, drew just 2% of climate development funding in 2023.

This gap represents a missed opportunity to accelerate progress on climate, food security, and livelihoods – especially in vulnerable regions.

We know what works. Between 2000 and 2022, emissions per value of agricultural production declined by 39%. Smarter, more efficient food systems are already taking shape. While current emissions from the agriculture sector are a major concern, these early successes demonstrate the potential of large-scale investments.

When we invest in agrifood systems, we are doing more than reducing emissions. We are expanding access to nutritious food, creating jobs in rural communities, increasing productivity, and restoring ecosystems. These are compound gains, spanning development and climate priorities alike.

Unlocking this potential will require deploying the full range of financing tools. The $1.3 trillion target cannot be met through public finance alone. It will require a mix of public, private, and domestic resources, aligned with countries’ needs and grounded in strong partnerships. Bilateral and multilateral finance will continue to play an important role.

Recent debt relief initiatives, including those from the Fourth International Conference on Financing for Development, are also expected to help countries create the fiscal space needed to prioritize agrifood transformation.

The private sector is beginning to respond. From 2016 to 2021, climate-focused blended finance transactions targeting smallholder farmers grew from 26% to 36%, with 60% achieving both adaptation and mitigation benefits.

But this momentum must be sustained and expanded. Private investors still face real barriers: limited data, unclear policies, and a lack of investment-ready projects. Initiatives like FAO’s Green Climate Fund Readiness Programme are helping countries close those gaps and attracting greater capital into agricultural transformation.

Carbon markets offer another avenue to unlock value. Properly designed, they can reward farmers and rural communities for climate-positive practices. But current structures in voluntary carbon markets fall short.

As of 2023, agrifood projects made up just 1% of credits from voluntary carbon markets, with three-quarters concentrated in five countries. Smallholders and low-income economies are effectively excluded.

New global mechanisms under the Paris Agreement Article 6 offer a chance to reset this system. Countries need support to prepare robust measurement frameworks, reliable data and inventories, and inclusive governance. With the support from the Global Environment Facility in over 70 countries, this foundation is already being laid.

There are also powerful opportunities in optimizing how existing public funds are spent. Modelling in 6 Sub-Saharan countries shows that reallocations across different policy-support measures can generate additional agrifood GDP growth points, create almost a million off-farm jobs, lift more than 2 million people out of poverty, and reduce more than 700,000 tons of greenhouse gas emissions.

This is not unique to a country. Through the GEF Food Systems Integrated Programme, co-led by FAO and IFAD, countries around the world are finding ways to make public budgets go further—generating climate benefits, economic growth, and social inclusion at once.

The challenge before us is simple to state, but difficult to resolve. Mobilizing climate finance is not simply a function of volume but also of the quality of the investments and the people it serves.

Without greater ambition, climate finance will not flow at the necessary scale and with the appropriate instruments. But climate ambition will stall unless finance reaches the sectors most capable of delivering transformation.

The Rome forum is a critical moment. It is a chance to align climate finance with climate opportunity. Through partnerships like the Food and Agriculture for Sustainable Transformation (FAST) Partnership and with a growing coalition of public and private actors, we can mobilize new resources, build better systems, and deliver real outcomes.

Farmers are already leading the way. Across the globe, they are adopting low-emission practices, restoring degraded lands, and protecting biodiversity. With the right support, they can do much more.

The window for action is narrowing. But the opportunity in agriculture is wide open. The question now is whether we will invest in it – at the scale and speed this moment demands.

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Kaveh Zahedi is the Director of the Office of Climate Change, Biodiversity and Environment at the Food and Agriculture Organization of the United Nations (FAO)