Transition Finance

Shifting to regenerative agriculture and more sustainable practices remains a difficult leap for many farmers in Cambodia, despite clear long- term benefits. High upfront costs, limited access to knowledge and support, and uncertainty around yields and income make the transition risky, especially for smallholders with little margin for error. Moving away from familiar conventional practices also requires new skills, inputs, and market connections that are not always readily available. Transition finance helps bridge this the gap by reducing early-stage risks, providing targeted support, and aligning incentives across the value chain, enabling farmers to adopt sustainable practices with greater confidence while building more resilient and stable livelihoods over time.

Background

Agricultural soil degradation and rising climate risks in Cambodia are placing growing pressure on rural livelihoods, food security, and farm productivity. Declining soil fertility, more frequent extreme weather events, and unsustainable land use practices continue to increase vulnerability among smallholder farmers, while . agriculture Agriculture also presents one of the most cost-effective opportunities for climate adaptation and mitigation through regenerative practices that improve soil health, strengthen resilience, and reduce emissions while sustaining productivity. Despite these benefits, many farmers struggle the transition remains challenging, as many farmersthey face overcome the financial barriers, in the early stages when investments upfront are needed before benefits are fully realizedrealising the return. Transition finance plays a critical role in closing this gap through targeted incentives and risk-sharing mechanisms that reduce uncertainty and support adoption of climate-smart and regenerative practices. This approach has been introduced in phases aligned with priority commodities, beginning with the DeiMeas research pilot from 2022 to 2025, which explored ecological and social benefits, monetization monetisation pathways, and behavioral shifts toward low-carbon and regenerative rice production. Building on these lessons, and in alignment with government priorities for key agricultural commodities, the model is expanding to the cashew sector from 2025 to 2028 through the Regenerative Cashew initiative, aiming to scale regenerative practices across the value chain while improving farmer incomes and strengthening long-term resilience and productivity.

DeiMeas (Golden Soil)
To address the challenges of incentivising farmers on change of practice and ultimately facilitating the transition towards Regenerative Agriculture, DeiMeas (Golden Soil) functions as a financial mechanism to reward farmers for their investment into the production of ecosystem services and public goods. Therefore, within the framework of the project "Agroecology and Safe food System Transitions in South-East Asia" (ASSET, FFEM), SmartAgro, CIRAD and Swisscontact are currently working on a 3-year pilot of DeiMeas that will support the transition and bridge the financing gap by incentivizing smallholder farmers already in the first year of transition to foster the uptake of agroecological practices. DeiMeas will be under the steering of the Department of Agricultural Land Resources Management (DALRM).
Regenerative Cashew 
Building on the DeiMeas pilot, this intervention scales a proven model that uses well-designed incentive schemes to drive the adoption of regenerative practices among cashew farmers. Key lessons show that incentives are most effective when integrated into commercial supply chains, ensuring long-term sustainability beyond project support. The next phase (2025–2028) focuses on three core components: deploying recyclable grant mechanisms to reduce farmers’ transition costs, establishing a traceability system to enable certification and market access, and strengthening policy engagement to support sector-wide scale-up.

Partners