July 2010: The International Food Policy Research Institute (IFPRI), a member of the Consultative Group on International Agricultural Research (CGIAR), has released a discussion paper on the potential for smallholder farmers to participate in carbon markets.

The paper begins by describing the climate change mitigation potential of agriculture and the regulatory and voluntary frameworks under which agriculture mitigation could be rewarded. It also provides an overview of economic literature on agriculture options within climate change mitigation opportunities. The paper then underscores the challenges for smallholder farmers to participate in formal and informal carbon markets.

In addition to the technical uncertainties in the mitigation benefits provided by various agriculture practices, the paper highlights barriers to participation, such as high transaction costs, uncertain revenue flows, a lack of clarity on ownership of carbon, as well as eduction and governance limitations. The paper concludes by calling for the integration of smallholder farmers into carbon markets and for the transformation of climate change policy into a pro-poor development strategy. [The Discussion Paper]