Final report: Stage 2 - Supporting climate resilient value chains

Abstract

This study is part of DFID’s ongoing work on providing information, leadership, incentives and ensuring collaboration and partnership with the private sector in fostering investment in the adaptation of agricultural value chains to the negative impact of climate change. The objective of the study is to (i) identify the most valuable commodity supply chains to developing countries, in terms of their contribution to gross domestic product (GDP) and employment; (ii) assess the extent to which those supply chains are resilient to the impacts of climate change in 2030 and 2050; and (iii) propose investments and policies needed to improve resilience along those chains. The stage 1 report reviewed the literature on climate resilient commodity supply chains in developing countries, and identified the 20 most valuable supply chains, in DFID focus developing countries countries, based on (i) its contribution to GDP and (ii) share of employment. This report covers Stage 2 of the study, which addresses the following specific Terms of Reference: A. An examination of specific commodity supply/value chains determined by DFID, following submission and assessment of the Stage 1 study report: Coffee in Ethiopia and Rwanda Tea in Kenya and Bangladesh Cotton in Tanzania and Pakistan The above selected value chains will be examined in terms of: (i) Current trends in the value chain, including baseline trajectories for production, considering whether they will grow or will face challenges due to physical climate effects under a range of scenarios; (ii) Whether there are any particular strategies that should be undertaken in such a context, to either grow the sector even more, sustain them, and/or to manage their decline over time to derive maximum economic benefits for the economy, while recognising the impact of climate change on the industry. B. Suggestions on ways in which private sector firms can invest in making the value chain more climate resilient, or how development institutions such as DFID can work with developing country governments to design policies that reduce the impact of climate change on the supply/value chain, and those who rely on it for their income, employment, profit or revenue. The report is structured in six sections: Section 1: Introduction includes the background to the study, approach and methodology, notes on the Intergovernmental Panel on Climate Change (IPCC) climate change scenarios, and the United Nations Framework Convention on Climate Change (UNFCCC) sponsored National Adaptation Programmes of Action (NAPAs); Sections 2, 3 and 4 cover the coffee, tea and cotton sectors respectively; Section 5 summarises the report’s key findings and recommendations for climate resilient coffee, tea and cotton value chains; and Section 6 contains 12 Annexes. This report has been produced for the UK Department for International Development (DFID) Adaptation Knowledge and Tools programme and published through Evidence on Demand. The Adaptation Knowledge and Tools programme is a DFID-funded programme intended to maximise the effectiveness of UK and international investment in climate change adaptation and resilience. The knowledge and tools generated through this programme are expected to promote greater understanding of what constitutes best practice in adaptation, as well as better international cohesion and coordination around adaptation. Through these entry points the programme expects to increase the quality of international and UK adaptation programming and reduce its risk