IFAD Calls for Urgent Investment in Climate Adaptation to Empower Rural Farmers

“We must stop seeing investments in adaptation as a sunk cost and start viewing them as an economic opportunity,” said Alvaro Lario, President of IFAD.

At COP30, the International Fund for Agricultural Development (IFAD) is urging global leaders to dramatically scale up investments in climate adaptation for small-scale farmers, presenting compelling new evidence that adaptation not only protects livelihoods but also drives economic growth and resilience.

IFAD’s new publication, Adaptation Finance: Building the Investment Case, highlights how financing rural climate adaptation generates high economic, social, and environmental returns, positioning it as a core component of sustainable development. The report demonstrates how adaptation projects can be made “bankable” — linking social impact metrics with financial performance to attract both public and private capital.

“We must stop seeing investments in adaptation as a sunk cost and start viewing them as an economic opportunity,” said Alvaro Lario, President of IFAD. “Investments in rural adaptation can align development goals with financial returns, delivering results that satisfy governments, investors, and communities alike.”

Adaptation as an Economic Engine

The IFAD report reveals that every US$1 invested in adaptation can yield more than US$10 in benefits. These returns arise through job creation, increased productivity, improved health, and stronger biodiversity, creating a cycle of prosperity that reinforces national economies.

A standout example comes from an IFAD-supported project in Bangladesh, which generated a 35 percent annual return on investment. The initiative enhanced rural infrastructure and established climate-resilient markets, leading to an 11 percent income increase for five million people. Transport costs for farmers dropped by 60 percent, trade expanded by 75 percent, and post-harvest losses fell by 30 percent. Thousands of rural jobs were created through community-based works, empowering local economies and reducing vulnerability to extreme weather.

“Investments in climate adaptation are not just about protecting the livelihoods of the world’s poorest,” Mr Lario emphasized. “They are a strategic and economic opportunity. By safeguarding food production and rural employment, these investments underpin national stability and growth.”

Building a Financial Case for Adaptation

The publication underscores that adaptation investments can generate measurable returns when coupled with innovative financing models. IFAD advocates for blended finance, combining public funds, concessional loans, and private capital to channel resources directly to rural communities.

Between 2022 and 2024, IFAD’s impact assessments show remarkable results:

• Small-scale food producers experienced a 34% average income increase.

• Agricultural production rose by 35%.

• Market access improved by 34%, reflecting more resilient and diversified supply chains. In some projects, farmer incomes jumped by up to 50%, underscoring the transformative potential of targeted rural adaptation investments.

The Global Case for Early Action

The broader economic rationale is striking. Globally, a US$1.8 trillion investment in climate-resilient infrastructure, early warning systems, sustainable dryland agriculture, mangrove protection, and water resource management could generate US$7.1 trillion in benefits through avoided losses and enhanced social outcomes.

Currently, over 60 million people are engaged in nature-based solutions such as reforestation, coastal restoration, and sustainable land management, with the potential to create 32 million new jobs by 2030.

Yet, the scale of financing remains critically insufficient. The adaptation funding gap in developing countries is estimated to be 12 to 14 times larger than current financial flows. Private sector engagement, IFAD stresses, is therefore vital to close this gap and unlock the full potential of adaptation as a driver of growth.

Empowering Rural Communities at the Frontline

Rural areas house 80 percent of the world’s poorest people and are disproportionately affected by floods, droughts, and erratic weather patterns. Small-scale farmers — who produce roughly one-third of the world’s food, and up to 70 percent in Africa — are essential for global food security.

Despite their critical role, they currently receive less than one percent of global climate finance. IFAD’s evidence demonstrates that prioritizing these communities not only supports food systems but also stabilizes economies, reduces forced migration, and enhances climate resilience at national and global scales.

As IFAD positions itself as a global investment platform for adaptation, the organization continues to promote innovative financial instruments, risk-sharing mechanisms, and partnerships that bring investors closer to impact-driven projects.

“Adaptation is not charity — it’s smart economics,” said Mr Lario. “When we invest in rural resilience, we invest in global food security, stability, and prosperity.”

With COP30’s focus on climate finance, IFAD’s call serves as a powerful reminder that scaling adaptation in rural areas is both a moral imperative and an economic necessity — one that will define the world’s collective ability to thrive in a changing climate.