Traditional knowledge, rather than modern methods, has helped indigenous people in countries like China, Kenya and Bolivia to cope with extreme weather and environmental change, the report said.
"Policies, subsidies, research and intellectual property rights promote a few modern commercial varieties and intensive agriculture at the expense of traditional crops and practices," said Krystyna Swiderska, senior researcher at the IIED and lead author of the study.
"This is perverse as it forces countries and communities to depend on an ever decreasing variety of crops and threatens with extinction the knowledge and biological diversity that form the foundations of resilience."
Traditional methods include using local plants to control pests, choosing crop varieties which tolerate extreme conditions such as droughts and floods and planting a variety of crops to hedge bets against uncertain futures.
Policymakers agree that agriculture needs to be adapted to cope with rising temperatures, variable rainfall and extreme weather events to ensure future food security.
However, government policies have largely overlooked long-established agricultural practices in favour of intensifying production through modern methods, the report said.
Next month, governments will meet at a U.N. climate summit in Durban, South Africa, to work on securing a deal to cut greenhouse gas emissions and climate aid for developing countries.
"They must have traditional knowledge firmly in their sights and begin discussing how to reform intellectual property rights in agriculture as a main concern," the report said. (Reporting by Nina Chestney; editing by Keiron Henderson)