Financing the transition. Takeaways from the II EU–LAC Agri-Food Dialogue on strategies and instruments to promote sustainable livestock

Driven by the AL-INVEST Verde Program and funded by the EU, the EU-Latin America and Caribbean (LAC) Agri-Food Dialogue was launched as a technical exchange platform between the two regions. The initiative aims to foster mutual learning, the articulation of good practices and the co-design of solutions that support the sustainable transition of the cattle sector.

The second EU–LAC Agri-Food Dialogue, which was held in Costa Rica on 30 June 2025, brought together decision-makers, technical coordinators of national livestock programs, representatives of producer organizations and sectoral associations, directors of national, regional or global cooperation initiatives, as well as renowned regional researchers whose work is linked to the sustainability livestock sector in LAC.

Of most relevance was the discussion around financial instruments and economic incentives to scale up sustainable livestock practices while also delivering measurable climate and social benefits. For the International Livestock Research Institute (ILRI)-led Sustainable Investments in Large-Scale Rangeland Restoration (STELARR) project, these conversations are strategic. Although there are already science-based solutions to restore rangelands, improve production efficiency and reduce emissions, their large-scale adoption depends largely on how they are financed and under what conditions.

In a context where public resources are limited and perceived risks are high; financing has become a structural need in the livestock sector. Connecting technical progress with appropriate financial models is therefore essential to effectively and sustainably transform livestock systems.

Hugo Sanchez, executive director of the Paraguayan Sustainable Beef Roundtable said, ‘Today, financing is a real barrier to scaling up good practices.’ This is especially true for small and medium-sized producers who often face serious challenges accessing green finance. It was noted that current financial regulations do not take into account the value of investing in sustainable livestock, which hinders access to climate and development funds.

From the perspective of the Inter-American Development Bank, ‘public money is not enough, we need to bring in private capital.’ To do so, the importance of combining grants, public funds, and concessional loans through mechanisms known as blended finance, which help reduce investment risk was emphasized. As the bank representative put it: ‘We can use public funds as guarantees or insurance to leverage private finance.’

Another key point was access to green and multilateral climate funds, such as the Green Climate Fund and the Global Environment Facility. While livestock systems have historically been excluded from these funds due to negative environmental perceptions, panelists emphasized that sustainable livestock practices do exist, and they must have access to such resources.

It was noted that more than EUR 200 million have been allocated by the EU to green cooperation in Latin America in recent years, and it was emphasized that to broaden access to these resources, clear policy and legal frameworks are needed that provide both legal and economic certainty to attract investment, especially in strategic sectors like sustainable livestock.

The role of public-private partnerships was also highlighted as a key mechanism to mobilize resources and share risks. Governments, development banks, companies, NGOs, and producers must coordinate efforts to open access to markets, strengthen local governance, and promote the adoption of sustainable practices throughout the livestock value chain. These partnerships not only help leverage funding but also generate shared learning, enable local governance innovation, and facilitate access for small-scale producers to differentiated markets.

A main takeaway from the panel discussion was that the current architecture of climate finance is not well suited to livestock systems, especially in LAC. This is due to measurement challenges, lack of common standards, low levels of producer organization, and uncertain returns. However, initiatives in environmental traceability, pilot carbon payment schemes, and new sustainability certification proposals suggest that the sector is gradually becoming integrated into national and global climate strategies and aligned with evolving market expectations.

The II EU–LAC Dialogue made it clear that the future of sustainable livestock depends not only on technical solutions and knowledge, but also on the financial and institutional conditions that make their adoption possible.

Acknowledgement 
The Global Environment Facility-funded STELARR project is implemented by the International Union for Conservation and executed by ILRI in partnership with the Alliance of Bioversity International and CIAT, the International Center for Agricultural Research in the Dry Areas, the Center for International and World Agroforestry Centre Forestry Research, and the Sustainable Fibre Alliance. Additional support is provided by the CGIAR Science Program on Multifunctional Landscapes. We thank all donors who contribute to the CGIAR Trust Fund.