The Government of Indonesia and the United Nations (UN) in Indonesia launched a joint programme on 9 April to support smallholders in mitigating climate risks by expanding access to financial services and strengthening their capacity to adopt sustainable agricultural practices. The programme will be implemented in East Java and Lampung, two of Indonesia’s largest food-producing provinces.
Small-scale farmers are the backbone of Indonesia’s agriculture, yet they are also among those most vulnerable to climate change. Extreme weather events, prolonged droughts, and pest outbreaks increasingly threaten smallholders’ livelihoods—posing risks not only to rural incomes, but also to national food security.
The joint programme, Leveraging Finance to Scale Up Climate-Resilient Food Systems, aims to train at least 15,000 farmers in East Java and Lampung to adopt climate-smart and innovative agricultural practices, with a focus on drought-resilient crops such as water-saving rice paddy. Climate-smart agriculture encompasses a set of context-sensitive practices and technologies that enable farmers to increase productivity while reducing greenhouse gas emissions and strengthening resilience to climate shocks.
To support smallholders in adopting these practices at scale, the programme integrates and leverages existing innovative financing mechanisms, including Indonesia’s climate insurance scheme, Sustainable Development Goal (SDG) Bond, Green Sukuk (shariah-compliant green bonds), and Indonesian Environment Fund (Badan Pengelola Dana Lingkungan Hidup/BPDLH)—building on earlier Joint SDG Fund-supported efforts to strengthen sustainable finance in Indonesia.
“The programme's objectives align with national priorities, particularly to promote food systems transformation and sustainable development. The program is expected to increase access to financing for farmers, encourage the implementation of climate-smart agriculture, improve farmers' welfare, strengthen food security, and integrate with other priority programs such as the Free Nutritious Meal Program,” said Leonardo A. A. Teguh Sambodo, Deputy for Food, Natural Resources, and Environment at the Ministry of National Development Planning (Bappenas) during the programme’s launch at the Bappenas building in Jakarta on Thursday.
Under the programme, at least 6,000 farmers in East Java will be supported to apply sustainable farming practices in return for access to climate insurance. In parallel, the programme aims to mobilize USD150 million from Indonesia’s annual SDG Bond, Green Sukuk and project-based Green Sukuk issuances to finance sustainable practices and rice biofortification for at least 300,000 smallholders, including by expanding access to advanced climate-smart technologies such as solar-powered irrigation.
In addition, the Indonesian Environment Fund (BPDLH) is expected to provide micro-loans for at least 400 Micro, Small and Medium Enterprises (MSMEs) implementing bankable agro-silvo-pastoral projects that combine crop cultivation, forestry and animal husbandry.
The programme will run from 2026 to 2027 and will be led by the Food and Agriculture Organization (FAO) of UN, in partnership with the International Fund for Agricultural Development (IFAD), the United Nations Development Programme (UNDP), and the UN Resident Coordinator’s Office (RCO).
“From a USD 2 million Joint Programme investment, we are targeting the mobilization of USD 205 million in public and private finance,” said Gita Sabharwal, UN Resident Coordinator in Indonesia.
“By bringing together the technical expertise of FAO, UNDP, and IFAD, the programme deploys climate‑smart and innovative agricultural practices, de‑risks sustainable production through rice farmer insurance, and scales inclusive financing mechanisms that are already proven to work in Indonesia.”
“Agriculture receives a very low share of climate finance, and through this joint programme we hope we can unlock more investments from a broader range of stakeholders for smallholder farmers, women and youth,” said Rajendra Aryal, FAO Representative in Indonesia and Timor-Leste.
This joint programme is supported by the Joint SDG Fund, in collaboration with the UN Food Systems Coordination Hub through the Joint SDG Fund Food Systems Transformation Window to support government-led food systems transformation and accelerate progress across the SDGs, with contributions from the European Union and the governments of Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, the Netherlands, Norway, Poland, Portugal, Republic of Korea, Saudi Arabia, Spain, Sweden, and Switzerland.
“Ireland as a member of the Joint SDG Fund is really proud to sponsor all of these efforts that are going toward climate-resilient agriculture, actually making sure that we will make a difference in the future of so many people across Indonesia,” said Ireland Ambassador to Indonesia and ASEAN Sharon Lennon.
Originally published by UN Indonesia.
Note:
All joint programmes of the Joint SDG Fund are led by UN Resident Coordinators and implemented by the agencies, funds, and programmes of the United Nations development system. With sincere appreciation for the contributions from the European Union and Governments of Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, the Netherlands, Norway, Poland, Portugal, the Republic of Korea, the Kingdom of Saudi Arabia, Spain, Sweden, and Switzerland for a transformative movement towards achieving the SDGs by 2030.
