Socio-economic issues and the policy context

1. Socio-economic issues and the policy context Second Steering Committee Meeting, GIAHS project Frédéric Dévé, ES Department

2. Introduction • I work on the “Roles of Agriculture project” (RoA) of FAO in the ES Department, willing to share some lessons • I am familiar with farming systems and with rural development issues of developing countries, and I know a few GIAHS potential candidates systems • And I am grateful to be invited to discuss socioeconomic implementation issues of the GIAHS project

3. Outline • What are the socio economic issues surrounding the launching of the GIAHS sites? • What are the policy contexts of GIAHS? • What are possible incentives structures and policies or relevance for the creation and viability of GIAHS sites?

4. 1. Socio-economic issues • Agricultural transformation and major pressures driving changes in agrarian systems: trade liberalization, poverty, and Multilateral Environmental Agreements (MEA) • Externalities and public goods, non market roles of agriculture (not only, but more particularly in heritage systems) • Out migration flows, economic crisis of household farming, abandonment of production patterns, of natural resources management, and of agricultural practices • Loss of rural cultural capital and cultural diversity (styles of life and livelihoods, social institutions, social capital, solidarity networks, landscapes, artistic expressions, ”folklore”, traditions, indigenous knowledge, culturally embedded food, moral values, cultural identity)

5. Agricultural transformation

6. Public Goods and Externalities ENVIRONMENTAL EXTERNALITIES POVERTY ALLEVIATION Equity FOOD SECURITY Satisfaction of Human and Strategic Needs SOCIAL VIABILITY Rural-urban migration and Buffer roles CULTURAL ROLE Cultural diversity • Global: • Ecosystems resilience • Climate change mitigation (carbon sequestration, land cover) • Biodiversity-global • Regional/National: • Ecosystems resilience • Soils conservation (e.g. soil erosion prevention & off-site impacts) • Water (water retention and availability, flood prevention, landslides prevention) • Biodiversity (wild species and wildlife conservation ) • Air quality (reduction in green house gas emission, carbon sequestration) • Local: • Ecosystem resilience • Biodiversity • Water retention • Pollution abatement/generation (air, water, soil) • Global: • Poverty alleviation • Regional/National: • Comparative advantage of agricultural growth in poverty alleviation, • Local: • Employment effects on secondary and tertiary sectors • Global: • World Food Security • Regional/National: • Access to food at household and individual levels • National security (strategic) • Food safety Local: • Local, Household and individual food security. • Global: • Buffer in times of crisis • Migration regulation • Regional/National: • Buffer: Remittances, return migration, and fiscal support at times of crises • Buffer: Welfare systems substitute (social security, state supported safetynets) • Mitigation of excessive rural-urban migration costs(congestion costs and other social implications) • Social capital formation Local: • Social viability effects at rural community level, (viability of rural areas through agricultural and rural employment). • Global: • Cultural Diversity. • Regional/ National: • Cultural heritage • Cultural identity formation • Perception of the roles of agriculture • Local: • Landscape, recreation-tourism, other amenities • Indigenous local knowledge (e.g., disaster prevention, biodiversity, medicinal applications) • Traditional technology.

7. Summary of RoA findings • Comparative advantage of agricultural growth vis à vis other sectors for poverty reduction • Informal insurance schemes and resilience of the economy • More balanced urbanization, reduced costs of urbanization • Positive and negative environmental externalities • Contribution to the making of national cultures and identities, cultural diversity

8. Outmigration and the transformation of agriculture

9. The demand for environment quality and cultural values

10. Connotation of rural culture and development Negative connotation China Morocco Ghana Dom. Rep Mali Positive Connotation Low development High development

11. 2. The policy context • The trends in domestic and international public investment in agriculture in developing countries • Marrakech Agreement on Agriculture and multilateral trade negotiations : opportunities (de minimis, safeguard, NTCs) and limitations • OECD work on “multifunctionnality” : the conditions under which government intervention is justified • Policy paradigms

12. OECD work on government intervention • Determine jointness (economies of scope) • If jointness weak, can service provision be de-linked? • If it can be de-linked, were all non-governmental provision possibilities explored ? (Priority for market provision through market creation and development and for voluntary or club provision) • When no market, voluntary or club provision is ensured and when the need for government intervention has been established, then targeted payments are the most desirable option in view of equity, efficiency and international effects. Target is geograficaly defined and service specific. The measure must remain de-coupled, i.e. de-linked from the level of intensity of the commodity output.

13. Policy paradigms Exploited Agriculture Ignored Agriculture Supported Agriculture Liberalized Agriculture Public Good Agriculture Retail-Driven Agriculture ?

14. Soutien et subventions à l’agriculture / Support and subsidies to agriculture Pays en développement / Developing countries Pays industriels / Industrialized countries Niveau de revenu / Level of income Hypothesis : evolution of support to agriculture

15. 3. Incentives frameworks for the creation of GIAHS sites • GIAHS incentives framework foundations: the claim for a public good approach (the system as a whole) • The idea : “Agriculture in a GIAHS site is a Public Good” is based on the view that incomes deriving from farming are inadequate for the support of the considered system, which is a public good; and that the production of public goods and positive externalities by this system is being under-rewarded. • The need for a public good approach, in order to justify intervention • The need for international recognition such as Cultural landscapes and/or Biosphere reserve

16. A GIAHS site as a public good • The degree of rivalry in consumption and that of excludability of potential consumers of the considered externalities and public good as well as their Scope (watershed impacts or global biodiversity) may have implications on instruments to be used to ensure a more optimal provision of a specific good or service from a given site • In theory, provision of the public good can be ensured by one or more of various mechanisms: voluntary provision, market provision, club provision, local or central government intervention • If a GIAHS site is per se, in its entirety and comprehensiveness, recognized as a public good whose provision requires government intervention, as well as regulations, protection and possibly other support measures, then its viability and sustainability has to be searched through a combination of government support and market mechanisms, possibly also club provision.

17. Exploring governement intervention • Legal support: Site status, legislation, protection, regulation, label • Lessons to be learnt from MAB, cultural heritage and other protected public goods and areas ? • Direct Payment Schemes difficulties : Transaction costs, Information on externalities and monitoring of services, Governance, • Experience from France and Japan, limitations • World prices trends limitations • There is a need for an ad hoc GIAHS pattern

18. Exploring market based incentives • Creation of markets for services: education, leisure, agriturism, ecoturism, besides the biodiversity dimension etc. • Development of diversified and more rewarding agricultural products markets: Labels, Geographic indication etc. • Instruments of quality control and certification, niche markets development

19. Exploring Institutional issues • GIAHS dwellers empowerment • Stakeholders dialogue frameworks (definitions and implementation of status, regulations, etc.) • GIAHS site management institutions: legal status, mandate • Property rights issues (natural resources management, intellectual property rights, etc.)

20. Conclusion • 孔子说：“我算有知识吗？其实没有。有个农夫向我提问，我却回答不出来。对他提出的问题我前后反复思考，也无法回答他” • (Confucius said: “Am I a learned man? No. Once a farmer asked me a question, and I failed to answer it. I thought about it again and again, but still could not give him an answer.”)