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Key Recommendations in Supporting Programs at the Nexus of Agriculture and Energy

1. Ag-energy solutions are most successful when agricultural actors lead, and energy and technology solutions follow

Ag-energy opportunities need to be driven by the agricultural imperative; energy is a service, after all. This requires an understanding of the unmet needs of both smallholder farmers and of the agribusinesses growing up around them. Those needs must drive project design and development.

 

2. Existing local agribusinesses lack the resources and management capacity for complex projects

Growing agribusinesses and smallholder farmers need access to working capital, asset finance, and training to develop capacity. Foundations and governments should recognize the critical role they play as engines of rural growth. By establishing facilities that combine financing with a range of support services, funders can lay the foundation for development for each country or regional market context.

 

3. The opportunities to create value at the ag-energy nexus are vast, but the pipeline of quality innovative enterprises is limited. Innovative enterprises are required to seize ag-energy opportunities

Philanthropy must recognize the need and directly invest in building innovative enterprises that specifically serve agribusiness, farmers, and energy service providers across multiple markets (countries or regions depending on size and integration). In exchange for extremely risk tolerant capital around, philanthropy should demand transformative potential to scale from these investments.

 

4. Most ag-energy projects combine an energy services provider, an agribusiness customer, and a technology solution. A matchmaking and filtering role creates important connections that often would not happen organically

Funders and governments with an interest in powering agricultural development should establish and sustain project development facilities. These need to be staffed with teams that combine expertise in agronomy, energy technology, project development and management. They should work alongside existing agriculture and energy development programs to facilitate connections between technology providers, agribusiness, and energy services. The facilities must also provide support in procurement, low-cost financing, and project management along with funding for project development, market testing, and pilot testing. This holistic support will lower the barriers to innovation and technology adoption.

 

5. Scale matters. Larger projects are more likely to succeed than small demonstrations because they keep the attention of high-quality partners and lend themselves to mid-range and integrated planning

The public sector must lead to develop ag-energy opportunities at scale. Planned, regional initiatives with clear incentives or subsidies are needed to realize the potential of cold storage and irrigation. Government must play its role in educating farmers and agribusinesses about modern practices and new technologies.

 

Excerpt of: The Opportunity at the Nexus of Energy and Agriculture, Factor[e] Ventures 2020