BOGOTA (Thomson Reuters Foundation) - Thousands of coffee farmers in Peru hope to produce higher and more profitable crop yields to better cope with the impact of climate change under a landmark United Nations-backed project.

More than 1.3 billion people live on farmland that is deteriorating and producing less, putting them at risk of worsening hunger, water shortages and poverty, the U.N. says.

Land degradation could displace 135 million people by 2030 unless action is taken to restore their land, says the U.N.

The $12 million Peru project involves 2,400 small coffee farmers and is the first by a public-private investment set up with the U.N., called the Land Degradation Neutrality Fund.

“What we’re trying to do with this fund is to finance the transition to a more sustainable use of land,” said Gautier Queru, head of the Paris-based fund, which is run by investment manager Mirova.

“This translates in producing more and better with less,” he told the Thomson Reuters Foundation.

The project, set to start within weeks, runs for 15 years.

Four coffee co-operatives in northern Peru will be trained in sustainable farming, learning about the best use of organic fertiliser and robust seeds.

“It’s a matter of selecting the seeds that are well adapted to the local conditions, and future conditions, taking into account climate change to make the coffee plantations more resilient and also to ensure good quality coffee is produced to drive prices up for farmers,” Queru said.

The project also focuses on reforestation.

Covering nearly 9,000 hectares of degraded land, trees will be planted in and around plantations, providing shade. It is hoped this may cut carbon dioxide emissions by 1.3 metric tons.

Land degradation drives climate change, with deforestation - which contributes 10 percent of human-caused greenhouse gas emissions - worsening the problem, the U.N. says.

The fund aims to invest $300 million in land management and restoration projects worldwide to meet global goals - known as the Sustainable Development Goals - on land degradation by 2030.

“If you want to meet the sustainable development goals, we can’t only rely on small pilot projects,” Queru said.

“We need this program to scale up.”

Queru said the aim is to expand the pilot project to other coffee cooperatives in Peru and other coffee-producing nations in Latin America, as well as to cocoa and tree nut farmers.