THINKING beyond the canopy Enhancing the sustainability of global commodity chains
Jul 15, 2015
THINKING beyond the canopy
Enhancing the sustainability of global commodity chains
THINKING beyond the canopy
The issues
• The food and energy price crises of 2007/2008 led to a rapid influx of agriculture and forestry foreign direct investment (FDI) into sub-Saharan Africa
• CIFOR research estimates that in Southern and Eastern Africa 13.08 million ha has been acquired between 2005 – 2013 (53.2% of SSA total)
• This is equivalent to 7.3% of total area available and agro-ecologically suitable (Ethiopia = 28.5%; Mozambique = 16.9%)
• In practice, most investments conflict with smallholder farmland and environmentally significant landscapes loss of food and income security, deforestation
Figure: Key investment destinations (by area acquired) Figure: Land uses displaced (by number of investments)
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
Central Africa Southern Africa Eastern Africa West Africa
Are
a ac
qu
ire
d (
in h
a)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Loss ofaccess tofarmland
Loss ofaccess to
pastureland
Loss ofaccess toforestland
Totalinvolving
access loss
Ethiopia(n=10)
Ghana(n=9)
Nigeria(n=14)
Zambia(n=5)
Total(n=38)
THINKING beyond the canopy
Realizing Inclusive Green Growth (IGG) through commercial agriculture and forestry
• Excessive focus on ‘land grabbing’ associated with plantation agriculture and forestry processes now well mapped and understood
• More constructive dialogue beginning to take place on how agricultural and forestry investments can contribute more meaningfully to national inclusive green growth objectives and priorities
• IGG discourse increasingly featuring in national development plans and policies and donor technical and financial assistance
IGG in agriculture/forestry through:
1. Resource substitution liquid biofuels, briquettes from residues
2. Sustainable production intensification, conservation agriculture
3. Ecosystem services carbon revenues, PES
THINKING beyond the canopy
Ongoing country-level initiatives & cases
• IGG projects & initiatives premised on the ability to attract (foreign) private capital and
establish synergies with development projects and public service delivery (e.g. PPP)
• Most large-scale projects typically involve spatial development initiatives (SDI) to
promote:
• Productive smallholder participation in high value global commodity chains
• Improved access to markets, infrastructure, inputs, and technologies
• Integrated land use planning
• Most initiatives include financing facilities to promote social/inclusive enterprise, with
substantial technical and financial support from international donor community
• Production often organized through ‘hub-spoke’ models (consolidated smallholder
farm blocks linked to commercial farms) and/or integrated service providers
• Some examples:
• Mozambique’s Beira Agricultural Growth Corridor (cereals, horticulture, sugar),
• Southern Agricultural Growth Corridor of Tanzania (rice, sugar, forestry)
• Zambia’s Farm Block Development Programme (sugar, cereals)
• Some individual investors in the sugar, rice, and oil palm sector adopting similar
‘smallholder inclusive’ business models (typically linked to IFC, EC, or IFAD funding)
THINKING beyond the canopy
Emerging global governance instruments & trends
Numerous global instruments developed to enhance sustainability of commodity
supply chains:
• Codes of conducts and guidelines to reduce negative impacts of investment AU Land
Policy Initiatives, FAO Voluntary Guidelines on Responsible Tenure, WB PRAI
• Trade-based sustainability standards EU Renewable Energy Directive, US Renewable
Fuel Standard
• Voluntary certification schemes RSPO, FSC, Fair Trade, Rainforest Alliance
• Responsible project finance principles Equator Principles, IFC Performance Standards
• Adoptions rates in Africa, especially of certification, comparatively low (except tea and
coffee), codes of conduct often necessitate excessive institutional and legal reform,
and project finance <2% of corporate financing in agriculture
• Industry, however, becoming more proactive in the adoption of explicit, time-bound,
sustainability commitments
• Major international commodity producers, traders, and consumer goods companies
(e.g. Cargill, Unilever, Nestle, Mars) have started to adopt ambitious ‘zero
deforestation commitments’ to completely eliminate deforestation from their supply
chains by 2020 (e.g. for oil palm, soy, sugar, cocoa, coffee, tea, beef, and timber)
• With most commodity chains dictated by large international buyers, these downstream
commitments are likely to have far-reaching impacts on large numbers of producers
THINKING beyond the canopy
Research needs and priorities
1. Better understand conditions under which different investment business models and
practices can contribute to IGG
• Requires analysis of direct and indirect social (e.g. local cost-benefit distribution),
environmental (e.g. deforestation, GHG emissions), and economic impacts (e.g. contribution
to FX earning, sector productivity) including trade-offs between them
• Requires thorough understanding of long-term financial viability of alternative business
models and supporting financial structures
• Such knowledge will support the operationalization and upscaling of SDI’s, identification of
funding priorities, streamlining IGG objectives with agricultural, environmental, and
investment policies, and exploiting synergies with international sustainability
initiatives/governance instruments
2. Better understand the potential risks and opportunities for national and regional IGG
objectives of increasingly stringent downstream procurement standards
• Zero deforestation commitments will increase demand for non-forest land which may create
conflicts with other socially and environmentally valuable land uses
• Zero deforestation commitments will create technical barriers to participation for smallholders,
which may lead to the exclusion of smallholders from
• Identification and quantification of risks and opportunities will support policy makers in
developing appropriate social, economic, and environmental safeguards and support relevant
corporations in improving commitment scope, implementation mechanisms, and aligning
commitments national IGG priorities and existing governance instruments (e.g. certification
schemes, codes of conduct, responsible finance standards)
THINKING beyond the canopy
Current CIFOR activities
Large scale investments in food, feed, and energy (LIFFE Options)
• Global comparative study on environmental, social, and economic impacts of different
smallholder-inclusive business models
• Focused on Mozambique (sugarcane, soy, eucalyptus), Tanzania (sugarcane, rice,
eucalyptus), Kenya (sugarcane), Brazil (oil palm, soy), and Indonesia (oil palm)
• Objective is to identify conditions under which business models employed in different
countries can best contribute to IGG and scalability within and replicatability between
countries
• Identify governance arrangements most appropriate to promoting best practices and models
Corporate Zero Deforestation Commitments (research portfolio under development)
• Analysis of commitment scope and implementation mechanisms
• Identification and quantification of social, economic, and environmental risks and
opportunities with implication for national IGG objectives
• Evaluation of complementary governance instruments required to capture opportunities and
mitigate risks
THINKING beyond the canopy
Source: http://scholar.google.com/citations?user=Whv5SG8AAAAJ