Sector Guide - Agriculture

This sector guide highlights key considerations for investments in the agriculture sector, focusing on the growing and harvesting of crops, fruits, and vegetables, as well as plantation crops such as cotton, palm oil, cocoa, coffee, tea, and sugar. Animal husbandry is not covered in this guide, with a separate sector guide addressing cattle, dairy, aquaculture, and poultry farming. Water supply is a critical consideration in agriculture, with significant amounts of water consumed per kilogram or ton of production. In areas where water deficit risks are evident, community stakeholder engagement is essential to understand community concerns about water use and mitigation strategies in case of risks to the community water source. The guide emphasizes the importance of safe, clean, and dry storage areas for agrochemicals, as well as the need for an inventory of hazardous materials. The use of agrochemicals is a significant environmental and social concern in agriculture, with potential risks to human health and the environment. The guide recommends reviewing the list of agrochemicals used and quantity used for each last year, as well as checking for signs of pollution in watercourses. Waste management is also a critical consideration, with the guide recommending a review of tons of waste product per type of waste and a rating of waste toxicity/danger. Ecosystem impact is another critical consideration in agriculture, with the guide emphasizing the importance of avoiding deforestation and land clearing for project development. The guide also recommends meeting with nature conservation or protected area authorities to inquire about potential negative impacts and establishing buffer zones with neighboring protected areas. Harvest leftovers, such as rice stubble, should not be burned in the field, and periodic verification is necessary to ensure that land expansion into forested areas has not taken place. This sector guide draws on a range of resources, including the Agriculture and Aquaculture Sector Profile, the CDC Investment Works ESG Toolkit, and the Sub-Sectoral Environmental and Social Guideline: Agriculture Production Crops. The guide provides a comprehensive framework for understanding the environmental and social implications of investments in the agriculture sector and highlights key considerations for investors and project developers.