Following the COP28 agreement to activate a new fund for loss and damage, recent analysis highlights agriculture perceived as the most severely affected sector

FAO | 01/12/2023

ROME | Agrifood systems are facing an escalating threat from climate change-induced loss and damage, and actions – including increasing financing— must be taken to address their vulnerabilities, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO) on the sidelines of the UN Climate Conference COP28 in Dubai, United Arab Emirates.

The report comes one day after world leaders at COP28 reached a breakthrough deal to operationalize the Loss and Damage Fund, agreed to be established last year at COP27. Several countries have already pledged money to the fund totaling some $300 million.

The FAO report, including an in-depth analysis of Nationally Determined Contributions (NDCs), reveals that about one-third (or 35 percent) of current climate action plans explicitly refer to loss and damage, highlighting the growing relevance of the issue on the global stage, with agriculture being identified as the single most impacted area.

Despite its central role in global agrifood systems – encompassing production, distribution and consumption – agriculture has not been a primary focus in discussions surrounding loss and damage, the authors note. However, communities relying on agrifood systems for their livelihoods currently face acute challenges, including poverty, food insecurity and limited access to services.

The study underscores the critical need for targeted efforts to address vulnerabilities in agrifood systems, recognizing their pivotal role in livelihoods and sustainable development. In 2020, the agrifood sector employed over 866 million people globally and represented a turnover of $3.6 trillion.

“COP28 opened with historic agreement on the operationalization of the loss and damage fund to help vulnerable countries deal with the impacts of climate breakdown. I extend my sincere congratulations to all countries for their important commitments to operationalize the fund. These pledges are not just financial; they represent a shared acknowledgment that addressing the challenges of climate change is an urgent moral imperative,” said FAO Director-General QU Dongyu.

Developing nations, situated on the frontline of climate change and grappling with the repercussions of escalating extreme weather events like droughts, floods, and rising seas, had persistently advocated for the establishment of the fund.

An escalating issue

Losses and damages in agrifood systems represent a substantial economic burden. Data from post-disaster assessments conducted between 2007 and 2022 indicate that agricultural losses accounted for an average of 23 percent of the total impact of disasters across all sectors. Droughts alone caused over 65 percent of losses in the agriculture sector during this period, translating to an estimated $3.8 trillion worth of crops and livestock production lost in the last 30 years.

According to the authors, climate events are anticipated to cause further loss and damage, impacting productivity, efficiency and the livelihoods of those dependent on agrifood systems.

The report also identifies a pressing need to enhance the methodologies and tools for assessing negative impacts of climate change, with existing methods often failing to capture slow-onset events and non-economic dimensions of loss and damage. The lack of an internationally agreed definition on loss and damage further complicates efforts to address the challenge, the study finds.

Financial support is identified as a crucial factor by the authors, with current levels of tracked climate finance falling below the potential needs for agrifood systems. The study also notes that specific data on financial needs for loss and damage is lacking, calling for solutions to target this issue.

Moving forward, the report outlines a series of actions to mitigate the impact of loss and damage in agrifood systems and advocates for international collaboration and stronger partnerships. These include clarifying the meaning of loss and damage for national agrifood systems, enhancing climate risk assessment, investing in data collection and research, implementing adaptation measures, strengthening emergency response, and adopting a recovery approach based on ‘’building back better”.

As climate change continues to surpass adaptation limits, authors highlight that the spotlight on agriculture as a vulnerable sector becomes increasingly crucial for global efforts to build resilient and sustainable food systems.

Some key findings

FAO researchers delved into the NDCs – commonly understood as national climate commitments as part of the Paris Agreement—of 168 countries as of June 30, 2023, shedding light on how nations address loss and damage and its specific implications for agrifood systems.

Loss and damage recognition: Over one-third of countries explicitly mentioned “loss and damage” in their NDCs, signaling a growing recognition of the issue. This emphasizes the increasing importance vulnerable nations place on addressing climate-induced losses and damages.

Geographical distribution: Notably, three-fourths of countries explicitly mentioning loss and damage are middle-income nations. The mentions are concentrated in Latin America and the Caribbean, followed by East Asia and the Pacific, and Europe and Central Asia.

Agrifood impact: Agriculture emerges as the most affected sector, with 40% of countries reporting economic losses explicitly linked to agriculture. The study reveals that, for countries reporting on loss and damage, agriculture stands out as the single most impacted sector.

Economic vs. non-economic Losses: The analysis distinguishes between economic and non-economic losses. Among countries reporting on loss and damage, 33% of non-economic losses are related to the agricultural sector, highlighting the multifaceted impact of climate change on communities.

Hazard types: Extreme weather events dominate the drivers of economic losses, with 37% of mentions related to the agriculture sector. Slow-onset events, while reported by a smaller group of countries, are also tied to agriculture, emphasizing the sector’s vulnerability to diverse climate-related challenges.

Loss and damage and agrifood systems: Addressing gaps and challenges

Agrifood systems are intrinsically linked to climate change and are particularly vulnerable to its impacts. Each year hundreds of billions of dollars’ worth of crops and livestock production is lost due to disaster events, undermining hard-won development gains and livelihoods for farmers. At the same time, agrifood systems are substantial contributors of emissions. As such, agrifood systems must play a central role in providing solutions for climate change – both adaptation and mitigation – while meeting the food security needs of present and future generations.

The communities that support and depend on agrifood systems are on the front line of loss and damage associated with climate change. Loss and damage can generally be described as the negative impact of climate change that occurs despite mitigation and adaptation efforts. Addressing loss and damage in the agrifood system is crucial, given its importance for livelihoods and sustainable development. Taking collective action is essential to tackle loss and damage in agrifood systems to ensure that the livelihoods of the most vulnerable communities are adequately protected and food security needs are met.

The purpose of this report is to stimulate discussions on the central role of agrifood systems in the loss and damage debate and identify the gaps in data, knowledge and finance that need to be addressed. The report provides an overview of the loss and damage concept, the status of analytical methodologies and tools, a summary of the reporting on loss and damage in nationally determined contributions (NDCs), an outline of the policy needs and some preliminary analysis of the financing needs. Overall, support to countries needs to be targeted and strengthened so that loss and damage in agrifood systems can be dealt with as early as possible. This support needs to ensure that no one is left behind while striving for better production, better nutrition, a better environment and a better life.

Dowload here the complete report “Loss and damage and agrifood systems: Addressing gaps and challenges“