The Asian Development Bank (ADB) and Louis Dreyfus Company B.V. (LDC), signed a loan of up to US$100 million to help smallholder farmers recover from the economic challenges caused by the Covid-19 pandemic, and improve their resilience to climate change impacts.

ADB Vice-President for Private Sector Operations and Public-Private Partnerships Ashok Lavasa (L) meeting LDC’s Chief Commercial Officer and Head Asia Region James Zhou (R) at LDC’s office in Singapore.

The loan will support LDC’s operations in India, Indonesia, Pakistan, Thailand, and Vietnam by financing coffee, cotton, and rice inventories for over 50,000 smallholder farmers across these countries. This will help secure food supply chains and reliable incomes for smallholder farmers, and help offset the impact of supply chain disruptions due to the pandemic.

ADB Vice-President for Private Sector Operations and Public-Private Partnerships Ashok Lavasa said smallholder farmers, who are already vulnerable to climate change, are facing increasing difficulties due to the pandemic, resulting in income loss, crop and food wastage, and supply chain disruptions.

“ADB’s assistance will help to ensure reliable offtake to farmers, providing a direct way to preserve their livelihoods and their assets, while enabling them to invest in climate-resilient farming practices.”

Accompanying technical assistance (TA) grant will deliver capacity building and training activities, that will reinforce the benefits of sustainable and climate-resilient agricultural practices for cotton farmers in India and coffee farmers in Indonesia.

The TA will support pilot-testing of drip irrigation in cotton fields in India, and the use of biochar kilns in Indonesia. Assistance under the TA is expected to benefit about 4,000 farmers, particularly women farmers. The TA funding comprises $205,000 from ADB’s Technical Assistance Special Fund for COVID Recovery and $385,000 from the Strategic Climate Fund, administered by ADB.

According to LDC’s Chief Commercial Officer and Head of Asia Region James Zhou, LDC is committed to empowering smallholder farmers, whose activities are key to global food security, to use sustainable farming practices for the benefit of current and future generations.

“With the right tools, knowledge, and support, farmers can lastingly improve their yields and livelihoods while preserving the environment. We look forward to collaborating with ADB toward this important goal,” he said.