Sustainable Development Strategies in Agriculture and Rural Development

1. Sustainable Development Strategies in Agriculture and Rural Development WTO Symposium on Trade and Sustainable Development 10- 11 October, 2005 John Nash Agriculture & Rural Development Dept / Trade Dept The World Bank

2. Outline of this Presentation • Why is Agriculture so Important for Poverty Reduction and Sustainable Rural Development? • General Principles for Sustainable Development • What are objectives? • How to best accomplish them? • Principles for effective public interventions • Five Dimensions of Sustainable NRM & Development • Reducing land degradation • Improving water management • Sustainable forestry • Sustainable fisheries • Incorporating global warming into development planning • The Role of Trade in Agriculture and Rural Development

3. Agriculture, Poverty and Rural Development

4. Why is sustainable agriculture so important for developing countries and the rural poor? • 63 percent of population live in rural areas • 73 percent of poor live in rural areas • Agriculture and agro-processing account for 30-60 percent of GDP in developing countries, and an even larger share of employment • Even with rapid urbanization, more than 50% of the poor will be in rural areas by 2035, and depend significantly on agriculture

5. Poverty is disproportionately rural Poverty Rates from PRSPs

6. Sustainable Development Principles (What?) • Economic sustainability: sustainablelivelihoods and improved well-being through growth and poverty reduction • Environmental sustainability: Target agricultural land, forests, water resources, protected areas, and biodiversity, so that opportunities and options of future generations are not degraded • Fiscal and institutional sustainability: must be realistic about cost and institutional requirements of instruments • May require tradeoffs

7. Sustainable Development Principles (How?) • Correct the over-exploitation or inappropriate use of resources by ensuring that all environmental services are correctly valued (internalize the externalities) • Establish projects and policies on appropriate levels -- community, watershed, national, regional, global – generally with corresponding implementation/ financing mechanisms • Incorporate institutional development and new technologies • Reduce risks and vulnerabilities of farming communities • Diversify cropping systems for economic and environmental resilience • Weather forecasting to aid planting date and management decisions. • Weather and price crop insurance.

8. Principles for Effective Public Interventions • Socially profitable and non-distortionary with respect to underlying long run prices • Pro-poor targeting mechanisms • Demand-driven: maximize private sector/community involvement in priority setting and implementation • Co-financing by beneficiaries • Exit strategy where appropriate

9. Five NRM Elements of Sustainability for Rural Development • Reducing land degradation • Improving water management • Sustainable forestry • Sustainable fisheries • Incorporating global warming into development planning

10. Reducing land degradation • Increase productivity on the “best” land • Diversify agroecosystems to protect food systems, improve diets, minimize risks, diversify incomes, and conserve agrobiodiversity • Rehabilitate productivity and ecosystem functions of degraded lands to enhance environmental roles e.g. C sequestration – BioCarbon fund. • Technologies include integrated soil fertility management, adapted varieties, crop rotations, conservation tillage, buffer strips, and organic farming • Strengthen local institutions and facilitate community-driven land and water resource management for managing shocks, stresses, and global trade barriers

11. Example of Successful NRM Project: Eastern Anatolia Watershed (I) • Control soil erosion and stabilize slopes to protect local communities, towns, rivers, dams. • Reintroduce native species (oaks, pines, walnut, wild cherry & almond, rose) along contour ridges and terraces for soil and native biodiversity conservation and income generation.

12. Improving water management

13. Water Resources Management Infrastructure for management of floods and droughts, multipurpose storage, water quality and source protection Institutional framework Management instruments Political economy of water management Other uses including industry and navigation Irrigation & drainage Environ- mental services Water supply & sanitation Energy Elements of Water Resources Management: Multiple objectives, multiple levels

14. The poor generally settle on the most fragile land with meager and/or highly variable water resources

15. Irrigation has been successful in lifting many rural poor out of poverty…trick is to do it in a sustainable manner Average income levels & irrigation intensity in India

16. Managing Water Sustainably: the Dublin Principles in operation • The “ecological” principle: • Strategies should be holistic (including environment), comprehensive, inter-sectoral... • The “institutional” principle: • stakeholder participation • subsidiarity (federal, state,municipality, users…) • greater role for private sector, NGOs and women • The “instrument” principle: • greater attention to economic value of alternative uses • greater use of economic instruments (water rights, user charges…)

17. Challenges in water management • Small stocks of water infrastructure in developing countries compared to those in climatically similar industrial countries • Simultaneous need for institutional solutions/ reforms • Pricing for fiscal sustainability and to encourage conservation (agriculture uses about 70% of water, and is very wasteful) • Ownership and devolution of management responsibility • Urgency in developing an integrated package of structural and non-structural tools which respond to the imbalances by human demand and hydrologic patterns accentuated by global changes

18. Making Forestry more Sustainable

19. Forests are especially important to the poor… • 1.6 billion rural people are dependent upon forests to some extent. • 1 billion out of 1.2 billion extremely poor depend on forest resources for part of their livelihoods • 350 million people are highly dependent on forests. • 60 million indigenous people are almost wholly dependent on forests. Source: World Bank Forests Strategy and Policy, 2002.

20. … and to the global economy… • Production of wood and manufactured forest products contribute more than US$450 billion to the world market economy. • The annual value of internationally traded forest products totals US$150-200 billion. • Globally, forest based industries provide about 47 million full time jobs.

21. … and the environment • Forest destruction is responsible for global biodiversity losses of 2-5% per decade; • Forest destruction (especially though burning) is estimated to contribute between 10 and 30% of all carbon gas emissions into the atmosphere; slowing deforestation and restoring forests are important elements of a strategy for slowing global carbon emissions.

22. 3 Pillars of Sustainable Forestry • Harnessing the potential of forests to reduce poverty • Integrating forests into sustainable economic development • Protecting local and global forest values

23. Fighting Poverty • Supporting policy, institutional and legal frameworks for forest development and to ensure rights of forest-dependent peoples; • Promoting the scaling up of collaborative forest management; • Integrating forest, agro-forestry, and small enterprises into rural development strategies.

24. Making forestry sustainable • Supporting the development of policies and projects for sustainable forest management and conservation; • Building capacity for improved governance; • Supporting the containment of illegal activities; • Addressing fiscal and trade issues related to forest sector and products; • Proactively promoting catalytic investments in forest management and conservation.

25. Improving governance requires • Institutional reforms/building • Political accountability • Competitive private sector • Public sector reform (including judiciary and police) • Civil society participation

26. Institutional reforms • Establish clear property rights • Establish well-defined permanent forest estates • Reduce distortions to trade in forest products • Set the “right” level of forest taxation and rent capture • Simplify forestry legislation and strengthen implementation

27. Examples of institutional reforms • Philippines: Multisectoral Forest Protection Committees • Cambodia: Forest Crime Monitoring Unit • Brazil: Geo-referenced licensing system and identification of illegal logging from land-use monitoring via satellite imagery • India: Village Forest Protection Committee (Joint Forest Management) • Bolivia: Legislative reforms conferring greater responsibility to individuals and local communities • Ecuador: Independent certifiers and outsourcing of supervisory functions of the forest department • Ghana: Timber Utilization Contracts

28. Protecting local and global values • Build markets for international public goods such as carbon; • Build national markets for environmental services; • Strengthen policies and investments in conservation and protected areas; • Assure that investments and programs do no direct or indirect harm to the permanent forest estate.

29. Effective certification requires • compliance with relevant laws; • recognition of and respect for any legally documented or customary land tenure and use rights as well as the rights of indigenous peoples and workers; • measures to maintain or enhance sound and effective community relations; • conservation of biological diversity and ecological functions; • measures to maintain or enhance environmentally sound multiple benefits accruing from the forest; • prevention or minimization of the adverse environmental impacts from forest use; • effective forest management planning; • active monitoring and assessment of relevant forest management areas; and • the maintenance of critical forest areas and other critical natural habitats affected by the operation.

30. Sustainable Fisheries

31. Why are fisheries so important to developing countries? Trade and income generation on national and global levels : • Global trade of US$ 55-66 billion annually, with 50 per cent of trade from developing countries • A Major Source of Income and Export for developing countries: at least 13 developing countries where fisheries is more than 5 percent of GDP, e.g. Ghana; Senegal; Namibia; • License fee income.

32. And important for poverty reduction • A Source of Livelihoods & Incomefor 30 million poor fishers and their families, employing an additional 150 million people in developing countries in associated sectors, e.g. marketing, boat-building, etc.; • A Critical Source of Food Securityfor 400 million poor people; • Potential source of alternative employmentfor rural poor through aquaculture.

33. Key elements in sustainable fisheries strategy: (1) Governance • Adoption of the Ecosystem Approach to Fishing; • Introduction of Institutional, Regulatory and Judicial framework; • Specific institutions for fisheries management (including Sector Councils, independent agencies for MCS), with transparent decision making mechanisms and agreed trade offs • Introduction of Property and Use Rights; The allocation of fishing rights to interested fishers: geographical, or quota systems • Introduction of Co-Management Systems Establishing shared governance responsibility for the fisheries between government and local users

34. Key elements in sustainable fisheries strategy: (2) Fisheries management • Fishing Capacity Reduction; • Decommissioning fishing vessels or buying back licenses is the most direct way of tackling overcapacity • Fully Protected Marine Reserves and Marine Protected areas; • Longer term closure to allow recovery of stocks • Promotion of alternative livelihoods; • Creation of economic alternatives to fishing for small scale fishers and fishing communities • Aquaculture; • Expected to help meet world demand for fish and seafood • Food safety and eco-labeling programs • To enhance added value and fishers income

35. Global Warming

36. Prototype Carbon Fund (PCF) Recognizing that global warming will have the greatest impact on its client countries, on July 20th, 1999 the Executive Directors of the World Bank approved the establishment of the PCF, with the operational objective of mitigating climate change. This aspires to promote the Bank's tenet of sustainable development, to demonstrate the possibilities of public-private partnerships, and to offer a 'learning-by-doing' opportunity to its stakeholders.

37. Bank’s BioCarbon Fund ($53 million worth of projects in FY05)

38. The Role of Trade in Agriculture and Rural Development

39. The Role of Trade • Agriculture (including fisheries and forestry products) is a highly tradable sector • Trade is the best lever for agricultural growth • Raising incomes mitigates pressure on the environment • Not all increases in trade are environmentally benign, but…. • The best solution is generally to target the problem directly by adopting appropriate environmental policies, not to restrict trade, and… • Trade gives consumers a powerful lever to effectuate change in the supplying country (fair trade, certification)

40. But developing countries’ share of agricultural exports to rich countries have stagnated, while South-South trade has grown, suggesting that trade barriers need to be lowered….

41. But that’s another l-l-l-o-o-o-n-n-n-g story Thanks