The Challenge
Small and marginal farmers in Bihar face intensifying climate risks like frequent floods and droughts, soil erosion, and declining soil fertility which drive yield losses of up to 50% and cut incomes by as much as one-third. While climate-smart agriculture (CSA) practices can improve resilience, adoption remains limited. Farmers often lack clarity on how CSA practices translate into tangible gains, and the absence of local success stories makes behaviour change harder. Weak extension systems and limited market pull for climate-smart produce reduce incentives to adopt and retain practices. Without targeted support, women smallholders, many of whom are landless sharecroppers, remain particularly vulnerable.
Blended Finance in Action
TBFC, in collaboration with a global nonprofit, is structuring a first-of-its-kind Development Impact Bond (DIB) to scale a peer-led CSA training model to 5,000+ women farmers across Bihar. The model is such that lead farmers mentor ~20 peers each, using demonstration plots, soil testing, and hands-on experimentation to build confidence and drive adoption of climate-smart practices. The program also integrates safety nets to de-risk early adoption and provides on-ground handholding support for 3 years. Under this outcomes-based financing model, program costs will be repaid by outcome funders only if farmers achieve measurable adoption and sustained retention of CSA practices. Payments are hence tied to both the intensity of adoption (number and depth of practices taken up) and the retention of practices over time, shifting the focus from inputs to outcomes.
Evidence suggests that continued adoption at intensity leads to broader climate and livelihood benefits: improved soil health, more resilient yields, reduced input costs, and stronger food security. The DIB will scale the training program to 125 villages, supporting 5000+ women farmers on a journey to secure resilient livelihoods and contribute to long-term climate outcomes.
