In the Global South, the majority of food is produced by micro, small and medium-sized enterprises (MSMEs), which are the first to be impacted by food insecurity and climate change. With more than 70 million smallholder farmers in Southeast Asia alone, these businesses account for 80 percent of agricultural production and are essential to the region’s transition to more sustainable, efficient, and low-carbon farming practices.

Across the region, governments and businesses are piloting public-private strategies to boost yield, reduce waste and build resilience – yet most will agree that the high costs of implementation are simply out of reach for most rural economies due to flaws and inequities in outdated finance models. A much-needed shift is required towards more innovative approaches that offer financial returns alongside longer-term sustainable outcomes for people and the planet. The paradigm shift is slow and acceleration is crucial to tackling climate change and ensuring food security for a growing global population.

Philanthropic capital is a vital part of this finance solution and yet, less than 2 percent of impact funding is currently directed towards climate and environmental mitigation. Traditionally, philanthropy has sought to champion underserved causes where catalytic investment, large or small, can bring about real-world change. This is where the generational opportunity lies for new approaches to blended investment models, where philanthropic capital can serve as the fourth ‘P’, by guaranteeing or de-risking interventions that might otherwise be too risky for public and private partnerships.

Whether it is investing in renewable energy projects, technology-enabled agricultural practices, or climate-resilient crops, the goal is to move towards a more sophisticated blended finance model that reduces the current fragmentation of capital flows across the agricultural sector.

The strategic deployment of philanthropy to address climate change and food insecurity through well-structured ‘PPPP’ impact funds allows for the more targeted leveraging of traditional approaches to public-private financing, delivering more scalable and repeatable returns for small businesses and the environment.

Read the full article about philanthropy and food systems by Beverley Postma at Alliance Magazine.