The Role of Rural & Agricultural Finance in Counter-measuring Climate Change

1. The Role of Rural & Agricultural Finance in Counter-measuring Climate Change Keynote Speech at the Asian Open Forum On Rural and Agricultural Finance to meet the Challenges of Environmental Change, Bank Keshavarzi, Tehran, Iran, June 12-17, 2011. by Sung-Hoon Kim, Ph.D Professor Emeritus, Chung Ang Univ., Korea Chairman, Citizen’s Movement for Environmental Justice, Korea Former President of Sangji Univ., Korea Former Minister of Agriculture & Forestry, Korea Former FAO Regional Officer/APRACA Secretary General

2. Ecological Status of Global Economy Excluding Central Asia and Caucasus. Excluding the latest accession countries. Deepening ecological deficit, footprint is surpassing bio-capacity of the earth. The eco-footprint is the amount of productive land used per capita for food production, water & waste management, habitation, transportation, etc. Source: WWF Study, 2006.

3. IPCC(Inter-governmental Panel on Climate Change) 4th Evaluation Report (2007) predicted that due to increasing Green House Gas(GHG) effects of global warming,To avoid the ill-effects of pollution, ozone depletion & global warming, IPCC suggested that GHG should be reduced by 25-40% of the 1990 level by 2020. ⅰ) by 2020 approximately 1.7 billion people on the planet will suffer from water shortages; ⅱ) about 30% of the earth’s flora/fauna species will be extinct (approxi. 10,000 species are now lost annually); and ⅲ) the average sea level of the globe will rise up by 24㎝.

4. Tuvalu Being Submerged into the Rising Sea, 2010 ※ IPCC predicted that the global sea-level would rise up by 24cm high in 2020. Many coastal areas would be affected like Tuvalu & Maldives.

5. Changes in Muir Glacier, Alaska, 1941 - 2004 Source: National Snow and Ice Date Center, W.O. Field, B.F. Molnia. ※ IPCC predicted that the av. temperature of the earth would rise up to 1.1°C∼6.4℃ in 2090-2099 owing to GHG effects.

6. Impact of Global Temperature Change,The Nicholas Stern Report, 2007 ※ Impacts are not evenly distributed, that is, the poorest countries and people will suffer earliest and most. BAU(Business As Usual) climate change will reduce welfare by 5 and 20%. Soil erosion and desertification will occur more rapidly in the low latitude regions. Source: Walter Wehrmeyer, Climate Change and Corporations, Climate Change Center, Seoul, March 2, 2010.

7. Targets for Reduction of Green House Gas (GHG) Emission by Country, 2009 ※ At Copenhagen Summit Meeting, Nov. 2009 major advanced countries submitted their respective commitments as follows: • EU: 20% reduction of 1990 level by 2020. • Japan: 25% reduction of 1990 level by 2020. • Germany: 80% reduction of 1990 level by 2050. • US: 17% reduction of 2005 level by 2020. (※ U.S. is No.1 CO2 emission country; 28% of total global GHG.) While, IPCC calls for 25-40% reduction of 1990 level by 2020. • Korea: 4% reduction of 2005 level by 2020. • China & India: will participate, but the financial and technical aids from advanced countries first.

8. Universal Suggestions in Tackling Climate Change • Carbon Tax and Caron Trading to be encouraged. • Reduce deforestation, soil erosion, degradation of land and desertification. • Enhancing energy and industrial efficiencies and co-generation. • Conservation and recycling of resources. • Supporting organic farming and nationwide forestation. • Utilizing more renewable energy sources as wind, solar, geothermal, tidal and biomass energies. • Suggestions:Tele-presence, e-books, local(organic) food consumption lowering food mileage, green housing & transportation system, smart electric grid system, and climate smart agriculture to reduce excessive fossil oil dependency.

9. Attitude of People towards Climate Environmental Issues & their Willingness to Act, 2008 Source: World Business Council for Sustainable Development, 2008.

10. Climate Change & Environmental Crisis in Korea Among a variety of environmental problems, Climate Change Issue is also the hottest and urgent one in Korea. - The world highest growth rate of CO2 emission; the 9th great GHG emission country; and the 5th oil consumption per capita. - The rising rate of average temperature between 1912~2008: 1.7oC for Korea vs 0.74oC for the world average. - The warming impact of climate change on the Korean peninsular is getting more serious: e.g. the winter time is decreased by 22~49days, approaching subtropics by 2050. - Declining rates of self sufficiency in grain production: 80.4% in 1970; 50.0% in 1980; 43.1% in 1990; 29.7% in 2000; and 26.7% in 2009.

11. run away: hairtail corbina run away: pollack Korean Coastal Fishes Evacuating from South Sea to Northern Seas due to Warming Effect ↖ mackerel incoming: anchovy cuttlefish Source: Samsung Global Environment Institute, 2008. incoming: cuttlefish anchovy

12. Impact of Climate Change in Agriculture, South Korea - As the average temperature in Korea has increased by 1.7°C over the last 100 years, the winter season became shortened with a longer period of summer season, and the time for blooming of spring flowers has gotten uncertain due to global warming, As a result, ⅰ) agricultural productivity decreased, coupled with degraded quality; ⅱ) the cultivation regions for crops moved northward; and ⅲ) damages from wintering harmful insects increased. - The BAU average temperature has been forecasted to increase by 1.5°C by 2020; 3.0°C by 2050 and 5.0°C by 2080. (NIMR, South Korea, 2009)

13. Agricultural Production Moving Up to Northern Region -citrus, winter cabbage, winter potato, apple, rice, grapes, tea- SouthKorea 인제 sticky rice green tea grapes ⇒ apple winter potato winter veg. citrus new subtropical fruits appeared Source: South Korea, ChosunIlbo, Sept. 18, 2007

14. Impact of Climate Change continued • Damages by typhoon, strong blast, heavy rain, snow, seismic wave, and storm were increased. • The yield of rice production decreased when cultivation timing was fixed regardless of varieties, fertilization and irrigation, but the production increased when the cultivation timing was adjusted. (And more cracked rice and deteriorated qualities of veg. & fruits appeared elsewhere.)

15. The ‘weather factor’ has had a far impact on the yield than the ‘technology factor’. That is; in the period of 2002-3, 76.4% versus 23.6% by their respective contributing factors. In the period of 2006-2007, weather contributing factor of 66.5% versus technology contributing factor of 33.5%. • - Other than the ill-effects of climate change, farmers are everywhere criticized for causing damage to the environment: by letting their pesticides and livestock wastes spill into the environment and their fertilizers run off into streams and groundwater, and thereby allowing their soils to erode, destroying wildlife habitats and endangering human health.

16. Countermeasure to Climate Change in Agriculture • Broadly speaking, there are two categories of countermeasures to environmental damages caused by climate change in the agricultural sector: Ⅰ. Measures to mitigate greenhouse gas(GHG) emission, Ⅱ. Measures to adapt to climate change. In fact, the above two are closely inter-related. - How can we best feed the people while conserving natural resources on the one hand and combating climate change on the other hand? And should we be paying farmers to protect the environment? (Quoted from Observer, Sustainable Planet, No. 226/227, Summer 2001, OECD)

17. - For the Category Ⅰ: Reducing the overuse of chemical pesticides and fertilizers; substituting fossil oil energy for renewable solar, wind and geothermal energies; forestation and fostering woods; preventing soil erosion, water depletion and land degradation; and exercising low carbon green practices, etc. • - For the Category Ⅱ: Conserving the natural resource base; generating environmental benefits such as providing wildlife habitat; acting as a sink for GHG and providing landscape amenity; and using useful microscopic organism; to improve indigenous seeds and practices and appropriate technologies; Climate Smart Agriculture based on IT and NANO technology, GPS, smart dust, precision-farming, artificial rain/ snow-making, Sensor, RFID, TMR, etc.

18. - For both Categories Ⅰ & Ⅱ: Community projects such as water management, insect control and wetland and ecological conservation; developing climate change-resistant seeds & practices; and providing appropriate education and training to farmers and officials with high level skills and management (agricultural human capital); and Factory cum Vertical Farming; .

19. Vision of Urban Vertical Farming, U.S.A., Canada & Japan 15 Story Vertical Farm can feed 20,000 persons Source: Ibid., 2010

20. Factory Farming in Japan Source: Agrigento Korea, Maeil Economic Daily, march 24, 2010.

21. Vision of Organic Factory & Vertical Farming, Korea Source: Ibid., 2010

22. Everlasting Multifuntionalityof Agriculture Freedom Peace Harmony Safety Happiness Food & Fiber Ecology/Environment Landscape Diversity of species Culture/ Tradition Community

23. Vision of Advanced Countries on Agriculture “Agriculture Faces with Great Challenges and at the same, Tremendous economic Opportunities” said President Obama. “Agriculture is the Key to Open the New Future like NANO Technology & Space Industry” said French President Sarkozy. “Let’s Create New Value by Reviving Agriculture” said Japanese Prime Minister Hatoyama. For Agriculture is the Main Source of Future Wealth. Source: Agrigento Korea, Maeil Economic Daily, March 24, 2010

24. The Role of Rural & Agricultural Finance to Meet Environmental Change. -Appropriate Crop Insurance programs: As FAO/APRACA-member banks have long been enthusiastic for securing farmer’s stable income, the crop insurance programs are at present widely adopted in many countries on paddy, wheat, fruits & vegetables, livestock in case of severe damages due to abnormal production conditions and abrupt weather change. The government’s support for the successful implementation of CIP is essential. • Rural Savings Mobilization Programs: To strengthen the stamina of vulnerable small farmers in the adverse situation and to help themselves stand on their own footing, various ways and means of savings mobilization including indigenous methods have been continuously encouraged. Governmental incentive system needs to be supplemented to the self-help movement.

25. Package Deals in Lending Agri-Loan: Agricultural lending to farmers is recommendable to combine loans with easy access to needy inputs, technology, marketing exit and field guidance/training programs as a package. Typical examples could be found in such climate-change related projects as climate smart technologies, irrigation, greenhouse heating and cooling devices utilizing renewable energy sources. • Through-Loan System for the entire Process of Sexangular (six dimensional) Agriculture: New concept of sexangular agriculture as 1st+2nd+3rd=6th industry, seen through as an integral process of production → processing → marketing → amenities, has been introduced in Korean and Japan’s small-scale family farm economies to maximize the use of limited resources for greater farm income. Accordingly, new concept of lending system tailored to the new concept of Sexangular agriculture should be conceived.

26. Conceptual Framework for Sexangular Agriculture IT BT Urban Agriculture Ubiquitous Farming Marketing Logistics New medicine Bio materials Sexangular Industry + α Primary Industry Secondary Industry Tertiary Industry Convergence Agricultural Products Livestock Agricultural Plants Supplies & Equip. Consulting Education Biomass Resources recycling GT CT Green tourism Clean technology

27. Common Environmental Improvement Project Loan: Such common environmental improvement projects as water management, pest & insect control, ecological conservation of wetland, forest and habitat, and preventive works for soil erosion, land degradation and desertification should be financed as an integral part of the common village/rural development project undertaken jointly by the government, agricultural banks and farmer-villagers together. • Improvement of Banking Services for Small Farmers and the Rural Poor: Along with the overall governmental scheme for small farmer development, such banking services as lending/guidance systems specifically geared to small farmers should be provided in most peasant economies, who are most vulnerable to weather change.

28. - Finally, but not of least importance, Environmentally- Friendly Agriculture should be strongly Supported: To promote health, justice, and sustainability, with a special emphasis on local-based practical solutions to the energy and climate crisis, environmentally friendly agriculture, i.e., organic farming has been vigorously practiced all over the world for the last decades. • Organic farming and ranching not only uses less fossil fuel and emits fewer climate-disrupting gases, but can actually clean greenhouse gas pollution from the atmosphere; while at the same time feeding the world, improving public health and restoring biodiversity. If people can move the world’s 12 billion acres of farm and ranch lands into a transition to organic and preserve the 10 billion acres of forests, at least 50 ppm of CO2 can be drawn down from the atmosphere and stored naturally and safely in the soil. This is literally the difference between present and future climate stability or climate hell. • (quoted from Organic Bytes, OCA, Dec. 31, 2010.)

29. Environmentally-friendly Rice Farming in Korea ◀ 친환경 메뚜기농업 Environmentally-friendly with locust farming 친환경 오리(鴨)농법 ▶ No herbicide /no fertilizer, duck farming ◀ 겨울 자운영(紫雲英) 논밭 Soil-rich winter growing plant

30. Inception of Environmentally-Friendly Agriculture - To make agriculture more environmentally sound, more socially just and yet economically viable, changes in conventional farming need to move towards sustainable organic agriculture, with the help of agricultural finance on alternative technologies and organic practices, thereby reducing the use of chemical fertilizers and pesticides. - Word-wide organic farming areas: Australia =11 million ha., Europe =7 mill. ha., South America =6 mill. ha., Asia =3 mill. ha., and North America = 2 mill. ha. - In 1998 the Korean government proclaimed the official inception of Environmentally-Friendly Agriculture (EFA) policy with various programs specially designed for small-scale organic family farms.

31. Thank you very much. Stop CO2, Go Action Now!