Photo courtesy Root Capital

Member: Root Capital

Location: Peru and/or Uganda

Size: 2,000 hectares

Type of intervention: Agroforestry

The proposed project aims to assist smallholder coffee farmers in planting additional shade trees on their farms, thereby augmenting on-farm vegetation and carbon removal rates beyond typical levels. Specifically, the project will focus on farmers with insufficient shade levels, who need more resources and/or incentives to enhance shade coverage.

Climate change poses a significant risk to coffee farmers in Peru and Uganda. In Peru, farmers confront declining yields due to climate-exacerbated diseases, droughts, and strong wind events, among other challenges. Uganda anticipates a substantial decline in production of 50-75% due to shifting agro-climatic conditions. 

Agroforestry is recognized as the primary climate adaptation and resilience practice for coffee production. However, many smallholder coffee farmers struggle to adopt or maintain optimal agroforestry practices due to limited cash income. The low coffee prices often prevent farmers from covering annual production costs and saving for significant investments. Farmers urgently require additional resources to invest in agroforestry practices to enhance their resilience. 

Internal modeling suggests potential income improvement of 10-20% from new carbon revenue, improved crop production, and/or reduced farming costs. Agroforestry management also enhances farm resilience to climate shocks, particularly extreme rain and wind events, and climate-exacerbated diseases already affecting Peruvian and Ugandan farmers.

Projects in Peru will enhance or establish agroforestry farms within the exceptionally biodiverse and threatened mountain and forest landscapes of the Andes and Selva Central. Many of these farms will be located in “buffer zones,” which allow for sustainable agriculture adjacent to major national or international protected areas. Agroforestry coffee farms are recognized as crucial corridors for wildlife, particularly migratory birds, in otherwise fragmented forest landscapes. Similarly, projects in Uganda will enhance or establish agroforestry farms within threatened forest landscapes, potentially including the Eastern Afromontane biodiversity hotspot. Project sites will be finalized during pre-feasibility.

Root Capital seeks to facilitate smallholder access to carbon credits by establishing a strategic alliance with an international not-for-profit implementing agroforestry carbon projects under the Rabobank Acorn platform. The feasibility assessment would look at the potential of farmer businesses involved in agroforestry crop cultivation that have not tapped carbon-related benefits due to limited technical knowledge and financing. 

Root Capital, in collaboration with its agri-SME clients, would identify farmers who are well-suited for projects; facilitate introductions to our partner; and offer advisory services to ensure businesses possess the capacity to act as full project partners. Root Capital may extend accompanying financing to ensure farmers can actively participate in the projects. 

The goal is to develop a model demonstrating how to effectively build local capacity to shape and implement carbon credit projects to maximize benefits for local communities.