Southeast Asia’s smallholder farmers face massive climate funding gap

By Francis Allan L. Angelo

Southeast Asia’s small-scale farmers urgently require USD 189.18 billion a year to adapt to worsening climate impacts and safeguard food supplies for 690 million people who rely on them for 90% of their food calories.

This is according to new analysis by Climate Focus for Family Farmers for Climate Action (FFCA), a global alliance representing 95 million small-scale producers, including the Asian Farmers Association for Sustainable Rural Development (AFA), which speaks for 12 million farmers across the region.

Despite the scale of need, only USD 0.28 billion in international public climate finance reached small-scale farmers in Southeast Asia in 2021—just 0.15% of what is required annually.

The Philippines alone needs USD 5.61 billion each year to support smallholders, who dominate its agriculture sector and are responsible for coconut exports valued at USD 2.66 billion in 2024.

Between 2012 and 2022, Philippine agriculture sustained annual losses of USD 760 million due to extreme weather and climate-related disasters.

“Governments must agree to a major boost in adaptation finance to protect our farms from the storms, drought, and heatwaves that are wreaking havoc across the globe,” said Esther Penunia, secretary-general of AFA.

She added, “Getting more finance to smallholders through their organisations will have the greatest impact.”

In total, USD 443 billion is needed globally each year to support 498 million smallholder farmers with farms of 10 hectares or less, the study found.

This is equivalent to an average investment of USD 953 per hectare—just USD 2.19 per day—and is less than the USD 470 billion spent annually on harmful agricultural subsidies, or a third of the USD 1.4 trillion spent on debt servicing by developing countries in 2023.

The regional breakdown for Southeast Asia includes USD 151.31 billion for incentivizing climate-resilient and low-emission practices such as agroecology, USD 34.87 billion for early warning systems and safety nets like crop insurance, and USD 3 billion for digital services such as weather forecast apps.

Jonjon Sarmiento, a rice farmer from Mindoro, said, “The report confirms what we live every day in our farms — the cost of adapting to a changing climate is already beyond what poor farmers can bear.”

“We rebuild after every flood, drought, or pest attack, with almost no support,” Sarmiento said.

“If adaptation finance truly reached us directly, we could scale up the proven systems we already practice: diversified organic family farming, water harvesting, and cooperative marketing.”

He added that the IDOFFS-BARMM project, which he is part of, has shown that “one peso invested in farmer-led adaptation yields multiple returns — in food, income, and dignity.”

Roberto “Ka Dodoy” Ballon, a small-scale fisher from Zamboanga Sibugay, emphasized that “fishers like us live at the frontlines of climate change — when the seas warm, the fish disappear; when storms grow stronger, our boats and homes are the first to go.”

“Yet, we receive almost nothing from the billions pledged for climate adaptation,” Ballon said.

“If we had even a small share of that needed finance, we could restore mangroves, build seaweed farms, and strengthen our cooperatives to protect both our coasts and our communities.”

“Every peso of adaptation finance that reaches us directly is an investment in food security and peace,” he added.

Globally, smallholders produce 50% of the world’s food calories and support the livelihoods of 2.5 billion people, yet they are largely left out of formal climate finance mechanisms.

Current international finance for smallholder adaptation stood at just USD 1.59 billion in 2021—only 0.36% of the required USD 443 billion.

In the absence of external support, smallholders are spending an estimated USD 368 billion of their own money annually on adaptive measures, equivalent to 20–40% of their annual incomes.

This lack of funding is not due to a lack of economic justification.

Experts point out that the USD 443 billion needed for smallholder adaptation is modest compared to the USD 3.8 trillion in crop and livestock losses due to climate-related disasters over the last 30 years.

Investing in adaptation now is far more cost-effective than responding to future damage, experts say.

Despite this, funding often fails to reach the grassroots due to bureaucratic hurdles, a lack of tailored financial products, and restrictive conditions like formal land title requirements.

Only 16% of banks in surveyed regions—South Asia, Southeast Asia, Latin America, and Sub-Saharan Africa—offer financing to smallholders.

Family farmer organizations often face complex application processes, high fees, and must apply through third-party intermediaries to access funds from mechanisms such as the Adaptation Fund, Green Climate Fund, or Global Environment Facility.

None of 40 reviewed projects funded through the GCF or GEF provided direct finance to family farmers or their organizations.

At the upcoming COP30 summit, to be held in Brazil, adaptation will be high on the agenda.

Key decisions are expected on indicators to track progress under the Global Goal on Adaptation (GGA), yet there is currently no specific metric to monitor finance flows to smallholders.

Family farmer groups are calling for the establishment of a Farmers Resiliency and Empowerment Fund to provide direct access to long-term grants and soft loans for climate adaptation.

The fund would be managed by farmer-led organizations to ensure money reaches those most affected and familiar with local needs.

Thales Mendonça, an agroforestry farmer from Southern Brazil and representative of the Inter-Continental Network of Organic Farmer Organisations, emphasized the broader significance of the issue.

“Investing in smallholders is not only an economic necessity — it’s an ecological imperative,” Mendonça said.

“We are pioneering practices such as agroecology that build climate resilience by restoring nature’s safety net.”

“Supporting smallholders and our organisations to scale up this work is the fastest route from scarcity to abundance.”

The Philippines is playing a pivotal role in shaping climate finance dialogues, having been selected to host the board of the new Loss and Damage Fund, which began disbursing funds in 2025.

Given its vulnerability to extreme weather, the country is seen as a case study in both the urgency and opportunity of investing in adaptation for smallholders.

To ensure success, FFCA urges governments and financial institutions to streamline application and reporting procedures, set clear targets for funding allocations, and increase the share of grant-based financing.

“Doing so will not only help family farmers weather climate shocks but also reinforce food systems, secure global supply chains, and reduce economic inequalities. The time for action, farmers and advocates say, is now—and the path to resilience begins by funding those who feed the world.”