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CompensACTION aims to reward farmers for climate performance

2023-08-01

The CompensACTION Initiative for food security and a healthy planet, launched by the German Federal Ministry for Economic Cooperation and Development (BMZ) in 2022, is gaining momentum. It aims to financially compensate smallholder farmers for their contribution to preserving ecosystems and thus create incentives for climate, biodiversity and environmental protection. Initial successes have been achieved in Ethiopia, Lesotho and Brazil.

By CompensACTION

The initiative CompensACTION for food security and a healthy planet was launched in July 2022 under German G7 Presidency by the BMZ within the Food Security Working Group.

All contributions

Around 84 percent of all farms worldwide are smaller than two hectares. A large proportion of these are run by smallholders in partner countries. They make a significant contribution to preserving ecosystems: According to estimates, at least one-third of family farms follow agroecological principles in whole or in part. They should be adequately compensated for services such as these. This requires compensation mechanisms that combine income from agricultural production with a payment for positive externalities. This is where CompensACTION comes in.

Ich bin ein Alternativtext — CompensACTION aims to reward farmers for climate performance. © GIZ

CompensACTION was launched in July 2022 under the German G7 Presidency by the German Federal Ministry for Economic Cooperation and Development (BMZ) as part of the Working Group on Food Security. It is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH together with its partner CLIMEAT. The initiative aims to promote so-called Payment for Ecosystem Services (PES) innovations on a large scale. These can include CO2 storage, water and soil conservation, biodiversity protection and other activities for which farmers are rewarded. Some of this already exists in the European Common Agricultural Policy. A strip of old grass, a late-mown meadow or supplementary flowering strips lead to higher subsidies in Germany.

CompensACTION plans to increase the income of small farmers in low- and middle-income countries as well. To achieve this, the initiative has already started the first pilot projects with support from the International Fund for Agricultural Development (IFAD).

In Ethiopia, CompensACTION is promoting agroforestry. The project aims to introduce sustainable agricultural practices on 25,000 hectares of land that sequester at least 2.2 tons of CO2 equivalent, a bundle of different greenhouse gases, per hectare per year In addition, more than 8,000 households are to increase their income by trading carbon credits. CompensACTION also provides incentives for nature- and climate-positive agriculture in Lesotho and Brazil.

In Brazil, it supports the establishment of a financing system for deforestation-free value chains. In the first step, a partner organization of IFAD identifies relevant ecosystem services. In the next step, it develops the mechanisms to reward smallholder farmers for these services. CompensACTION plans to work with 1,500 families to sustainably manage about 10,000 hectares of forestland starting in 2024.

In Lesotho, there is a national fund for payment for ecosystem services (water efficiency, biodiversity promotion/conservation, carbon abatement/sequestration). This is expected to reach up to 40,000 people and is designed to continue beyond the life of the project. The CompensACTION initiative disseminates experiences from another BMZ-funded pilot: Refinancing a system of agricultural extension services for 30,000 farmer families by introducing agroecological practices in western Kenya (on 11,000 ha, each with 3.6 tons CO2 equivalent/ha/year).

Curious? Looking for support or exchange regarding similar projects? CompensACTION is open to collaborating to implement projects and sharing ideas about compensation mechanisms. We look forward to hearing from you (compensaction@giz.de). More info is also available on our new website Compensaction.

Back to overview

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(c) Christof Krackhardt/Brot für die Welt

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(c) Christoph Püschner/Brot für die Welt

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A portrait by Jan Rübel

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An interview with Fernanda Machiaveli

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A contribution by William Onura and Larissa Stiem-Bhatia

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The goals of transformation should leave no one behind

An Interview with Mareike Haase and Stig Tanzmann

Four interviews kick off the relaunch under the new name „Food4Transformation“, asking the same questions from different perspectives. Mareike Haase and Stig Tanzmann from Brot für die Welt explain why the right to food, inclusivity, agroecology and food sovereignty are the central levers for a successful transformation.

Agricultural policy belongs in prime time

An interview with Dr. Julia Köhn

Four interviews kick off the relaunch under the new name „Food4Transformation“, asking the same questions from different perspectives. Dr Julia Köhn, Chair of the German AgriFood Society, points out in the interview: Only if innovation and transformation are profitable in the medium term can they close the food gap in the long term.

From field to fan shop: how to increase supply

A contribution by Jan Rübel

Organic cotton is extremely popular – but farmers still find it difficult to change their conventional cultivation methods. A new project addresses this dilemma: Bundesliga football teams in Germany are promoting the switch to organic cotton in India. And thereby setting an example.

How a Nigerian fintech wants to secure 1 billion US dollars for farms

An Interview with Blessing Mene

Small farmers often have a hard time getting financing. An app in Nigeria wants to change that: Founder Blessing Mene about what his app offers - and about the opportunities and limitations of agricultural financing.

BMZ releases video on the transformation of agricultural and food systems

A contribution by GIZ

The Federal Ministry for Economic Cooperation and Development (BMZ) has released a video on the transformation of agricultural and food systems. In the video, Federal Minister Svenja Schulze also speaks about the urgent need to combat global hunger and contribute to resilient agricultural and food systems.

The rush for green energy shouldn’t undermine rights of pastoralist communities

A contribution by Hussein Tadicha Wario

Africa’s drylands seem to be predestined for generating solar and wind power – especially given the current hype over green hydrogen. However, pastoral communities are often put at a disadvantage in this respect. Our author describes the arising conflicts and what successful coexistence of green energy projects and the communities could look like.

The Agri-Food Map: An interactive map to explore sustainable agri-food systems

A Contribution by GIZ

The complex interrelationships of the sustainable transformation of agricultural and food systems are not always easy to understand - the Agri-Food Map, an interactive online app, makes the comprehensive relations accessible by providing a wide range of comprehensibly prepared information.

Climate change mitigation and adaptation strategies for the African livestock sector

A Contribution by ILRI and GIZ

The production of animal-source foods is becoming increasingly difficult due to the impact of climate change on the livestock sector in Africa. Though, Livestock make a crucial contribution to food security in Africa. Three papers by the Federal Ministry for Economic Cooperation and Development (BMZ), GIZ, ILRI and World Bank analyze, how Africas future livestock sector can look like.

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CompensACTION aims to reward farmers for climate performance

By CompensACTION

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A contribution by Bread for the World

Interview with Lawrence Haddad (GAIN)

Interview with Joao Campari (WWF)

Interview with Martina Fleckenstein (WWF), Michael Kühn (WHH) and Christel Weller-Molongua (GIZ)

A Contribution by WWF

A Contribution by GIZ

A Multimedia-Toolbox by GIZ

A contribution by Ben Leyka

Interview with Jann Lay (GIGA)

A contribution by the Global Donor Platform for Rural Development

Interview with Marvin Antonio Garcia Otero

Interview with Thomas Loster

By Iris Manner

Interview with Miriam Wiemers (Welthungerhilfe)

Event report by Jan Rübel (Zeitenspiegel)

A report by David Sahay (Zeitenspiegel)

Interview with Cyrus Samimi (IAS)

Interview with Dr Maria Flachsbarth (BMZ)

Interview with Maria Andrade

A contribution by Ralf Südhoff

A contribution by Ismahane Elouafi (ICBA)

A contribution by Kerstin Weber and Brit Reichelt-Zolho (WWF)

Double interview with Tony Rinaudo and Volker Schlöndorff

A contribution by Maria Smentek (WFP)

Interview with Bernadette Arakwiye und Salima Mahamoudou (World Resources Institute)

A contribution by GIZ and BMZ

A contribution by Dr. Kathleen Mar and Dr. Nicole de Paula

A report by Bettina Rudloff and Annette Weber (SWP)

A report by Alexander Müller and Jes Weigelt (TMG)

A contribution by Michael Brüntrup (DIE) und Daniel Tsegai (UNCCD)

A contribution by Brot für die Welt

A contribution by Claudia Voß

Interview with Jacob Schewe (PIK)

A report by Susanne Neubert (SLE)

An interview with Peter McFeely (WWF)

A Contribution by Jan Grossarth

An Interview with Dirk Schattschneider (BMZ)

A photo reportage by the Zeitenspiegel agency

A Call by BMZ and Partners

An Interview with Leonie Bremer (FFF)

An Interview with Martin Frick (WFP)

A Contribution by Michael Kühn (WHH)

A Contribution by TMG Think Tank for Sustainability

A Contribution by GIZ

A Contribution by the TMG Think Tank for Sustainability

A Contribution by Lennart Woltering (CGIAR)

A Contribution by Jorrit Kamminga

An Interview by Jan Rübel

A Contribution by Rural 21

An Interview with Dirk Meyer (BMZ)

A Contribution of the 'Initiative for Sustainable Agricultural Supply Chains' (INA)

A Listicle for climate protection and adaptation

An interview with Ally-Raza Qureshi, WFP