INESAD
Javier Aliaga Lordemann, Senior Associate Economist at INESAD, participated as a speaker in the virtual conference titled “Strengthening Agricultural Resilience for the Global South”, held on July 31, 2025. The event was jointly organized by the ICRISAT Center of Excellence for South-South Cooperation in Agriculture (ISSCA) and DAKSHIN–Global South Centre of Excellence at RIS. His intervention was part of the session titled “Building Climate-Resilient Agriculture Through South–South Collaboration: Unlocking Finance in LATAM.”
His presentation was structured in three parts. First, he provided a regional diagnostic of the challenges and opportunities facing climate-resilient agriculture in Latin America, highlighting key data and trends. Second, he analyzed successful models of South-South cooperation and innovative finance mechanisms being piloted in the region, including green bonds, concessional funds, and blended finance. Finally, he proposed a forward-looking agenda focused on scaling up financing and institutional partnerships to support sustainable agriculture, especially for smallholder farmers, in the face of climate change.
The following is an overview of Javier Aliaga’s key intervention at the Conference
“Strategic Support – Why It Matters”
So let me start by giving you the big picture of why this kind of strategic support is so crucial — especially for agriculture, and especially in countries like Bolivia and across the Andes. We all know agriculture is on the frontlines of climate change. It’s one of the most vulnerable sectors, but here’s the disconnect: it only gets about 5% of total global climate finance. That’s tiny. And when you consider that the sector actually needs over a trillion dollars annually to meet adaptation and resilience goals, the scale of the problem becomes clear. But it’s not just about global numbers — it’s about who’s getting left out.
In Bolivia, for example, smallholder farmers are already dealing with serious challenges: droughts, unpredictable rainfall, heat stress, crop failures. Yet most of them don’t have access to even the most basic tools — no climate insurance, no tailored credit, no formal risk protections. So, when climate shocks hit, there’s nothing to fall back on.
That’s where strategic instruments come into play. I’m talking about catalytic finance — using public money to bring in private investment — or blended finance models like the Climate-Compatible Agricultural Transition approach. Tools like index-based insurance can make a huge difference, and well-designed public-private partnerships can really unlock new value. But here’s the key: none of this works in isolation. You need a whole ecosystem. We need a virtuous triangle.
There are three building blocks: finance, policy and budgets, and institutional capacity. These have to move together. If one is missing, the whole system stalls. In the end, it’s not just about increasing climate finance — it’s about making sure the money flows where it matters most, reaches the most vulnerable, and is backed by the right institutions and incentives. Strategic support is what connects those dots.
“Financial & Institutional Gaps in Bolivia’s Ag Resilience Ecosystem”
Now let’s zoom in on Bolivia, and what’s holding the country back from building a truly resilient agricultural sector. First, on finance: there are some encouraging signs, program and projects — that shows political will. But when it comes to accessing bigger international funds, like the Green Climate Fund, Bolivia is still largely on the margins. What’s missing is a platform that brings everyone together — government, private sector, cooperatives — to actually align and scale up financing.
Then we get to policy. The reality is that incentives for climate-smart agriculture are either too weak or don’t exist. There aren’t meaningful tax benefits or subsidies for sustainable farming. And worse, national and local policies often don’t talk to each other. So even when there is some support, it’s fragmented and unpredictable for farmers.
Now, on institutions — this is a major challenge. Responsibilities are spread out across ministries, banks, municipalities — and they’re rarely coordinated. That makes it really hard to implement a unified resilience strategy that combines finance with technical and policy support.
Let’s also talk about risk. Bolivia doesn’t really have a strong insurance culture for agriculture. Index-based insurance isn’t widespread, risk-pooling barely exists, and most smallholders are left totally exposed when climate disasters hit. No protection means falling into debt or dropping out of farming altogether.
And finally, the private sector. Yes, we’re seeing some green shoots — a few agritech startups, some social enterprises — but they’re underfunded. There’s very little patient capital or blended finance to help them grow and reach rural areas.
So, what does all this mean? Even with promising programs, Bolivia still lacks the financial architecture to scale resilience. But there’s a real opportunity through South–South collaboration — learning from countries like Peru, Brazil, or India to build new financing models that are adapted to Bolivia’s reality. Building resilience isn’t just about the money. It’s about building a system where finance, policy, and institutions reinforce each other — and where smallholders are at the center of it all.
Designing a South–South Strategic Support Framework
Now, let’s talk solutions. What we’re proposing here is a regional framework — a South–South model to support climate-smart agriculture, especially in the Andes. It’s designed to scale impact by tackling finance, policy, and institutional gaps together. It’s built around six pillars — let me walk you through them briefly.
First, a Regional Finance Observatory. This would be a kind of dashboard — tracking where climate finance is going, where the gaps are, and how public and private actors are aligning. It gives governments and donors real-time data to act more strategically.
Second, a Blended Finance Toolkit. This would help ministries design the kinds of financial instruments they need — things like concessional loans, seed capital, guarantees — adapted to their own capacities. The idea is to reduce risk for private investors and unlock financing for things like regenerative ag, agroforestry, or digital solutions.
Third, we propose Cross-Regional Policy Labs. These would bring together peers — say, from Bolivia, Peru, and India — to co-create climate-smart policies. We’re talking about soil health incentives, subsidy reforms, tax instruments — with rapid prototyping and real-world testing.
Fourth is a Seed Insurance Facility — one that works across borders and supports the creation of affordable, index-based products for smallholders. Think of it like a regional risk pool that makes insurance both scalable and viable.
Then we have an Agri-Tech Investment Platform. This would connect impact investors with agrifood startups and cooperatives, using KPIs — like carbon sequestration or yield improvement — to measure results. Models like ACORN or Kilimo show us this can work at scale.
And finally, a Monitoring and Evaluation System. It would track not just how much is spent, but what’s actually working. It uses both tech — like satellite imagery — and local data to feed back into decision-making.
Why does this framework matter? Because it’s regional, it’s practical, and it avoids top-down, one-size-fits-all approaches. It builds capacity from within the South, and it brings in the kind of capital and policy alignment we need to make real change happen — especially for the smallholder farmers who are most exposed to climate risk.
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