Are there opportunities for climate-smart agriculture? Assessing costs and benefits of sustainability investments and planning policies in Southern Africa

Abstract

Abstract Transformation in the smallholder agricultural sector towards more sustainable and cleaner production systems is needed in Southern Africa. Climate-smart agriculture could be an opportunity in this respect. The paper presents a cost-benefit analysis of the public investment program to promote climate-smart agriculture in Lesotho. Economic profitability of investing in such program in nationwide crop, livestock and aquaculture smallholders’ production is assessed, considering costs and benefits at private level and those that accrue to society. Given uncertainty about the future, a development pathway commercially oriented is compared with a pathway aimed at increasing households’ capacity to adapt their farming systems to the changing climate. Investment returns are above the opportunity cost of capital, under both pathways, indicating the convenience for farmers and the whole society in investing in climate-smart agriculture. The program also leads to a decrease in the greenhouse gas emissions’ intensity, positively contributing to climate change mitigation. The economic evaluation of the carbon-balance increases societal profitability of the investment program.