The Role of Climate-Smart Agricultural Lending in Improving Food Security in Palestine: An Empirical Study of Sustainable Rural Finance

Food security in Palestine is increasingly threatened by climate change, water scarcity, political instability, and limited access to appropriate agricultural finance. Smallholder farmers face growing production risks while lacking the financial capacity to invest in resilient and sustainable farming systems. Climate-smart agricultural lending (CSAL) has emerged as an innovative rural finance mechanism that integrates climate resilience, environmental sustainability, and productivity enhancement within agricultural credit systems. This study empirically examines the role of climate-smart agricultural lending in improving food security outcomes in Palestine. Primary data were collected from smallholder farmers, agricultural cooperatives, and rural financial institutions across selected governorates in the West Bank using structured questionnaires. Econometric regression analysis and propensity score matching were applied to assess the impact of CSAL on adoption of climate-smart practices, income stability, and household food security measured by the Household Food Insecurity Access Scale (HFIAS). The results show that access to climate-smart agricultural credit significantly enhances farmers’ adoption of sustainable practices, reduces climate-related production risks, and improves household food availability and access. The study concludes that strengthening climate-smart rural finance frameworks can play a vital role in supporting climate-resilient agriculture and long-term food security in fragile and resource-constrained contexts such as Palestine.