Sustainable Development Strategies in Agriculture and Rural Development WTO Symposium on Trade and Sustainable Development 10- 11 October, 2005 John Nash.

Sustainable Sustainable Development Development Strategies in Strategies in

Agriculture and Rural Agriculture and Rural DevelopmentDevelopmentWTO Symposium on Trade and WTO Symposium on Trade and

Sustainable DevelopmentSustainable Development10- 11 October, 200510- 11 October, 2005

John NashJohn NashAgriculture & Rural Development Dept / Trade Agriculture & Rural Development Dept / Trade

DeptDeptThe World BankThe World Bank

Outline of this Outline of this PresentationPresentation

Why is Agriculture so Important for Poverty Reduction Why is Agriculture so Important for Poverty Reduction and Sustainable Rural Development?and Sustainable Rural Development?

General Principles for Sustainable DevelopmentGeneral Principles for Sustainable Development What are objectives?What are objectives? How to best accomplish them?How to best accomplish them? Principles for effective public interventionsPrinciples for effective public interventions

Five Dimensions of Sustainable NRM & DevelopmentFive 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 The Role of Trade in Agriculture and Rural DevelopmentDevelopment

Agriculture, Poverty and Agriculture, Poverty and Rural DevelopmentRural Development

Why is sustainable agriculture so Why is sustainable agriculture so important for important for

developing countries and the rural developing countries and the rural poor?poor? 63 percent63 percent of population of population

live in rural areaslive in rural areas

73 percent73 percent of poor live of poor live in rural areasin rural areas

Agriculture and agro-Agriculture and agro-processing account for processing account for 30-60 percent30-60 percent of GDP in of GDP in developing countries, developing countries, and an even larger and an even larger share of employment share of employment

Even with rapid Even with rapid urbanization, urbanization, more than more than 50%50% of the poor will be of the poor will be in rural areas by 2035, in rural areas by 2035, and depend significantly and depend significantly on agricultureon agriculture

Poverty is disproportionately Poverty is disproportionately ruralrural

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Urban 17 16 25 24 62 52 56 48 37 27 55 21 26 39 49 12 57 31 31 23 15

Difference 34 30 43 26 9 14 24 13 10 7 12 19 31 -6 21 -2 -6 38 14 21 12

Poverty Rates

Poverty Rates from PRSPs

Sustainable Development Sustainable Development Principles (What?)Principles (What?)

Economic sustainability: sustainableEconomic sustainability: sustainable livelihoods livelihoods and improved well-being through growth and and improved well-being through growth and poverty poverty reductionreduction

Environmental sustainability: Target Environmental sustainability: Target agricultural land, agricultural land, forests, water resources, forests, water resources, protected areas, and biodiversity, so that protected areas, and biodiversity, so that opportunities and options of future generations opportunities and options of future generations are not degradedare not degraded

Fiscal and institutional sustainability: must be Fiscal and institutional sustainability: must be realistic about cost and institutional realistic about cost and institutional requirements of instrumentsrequirements of instruments

May require tradeoffsMay require tradeoffs

Correct the over-exploitation or inappropriate use of Correct the over-exploitation or inappropriate use of resources by ensuring that all environmental services resources by ensuring that all environmental services are correctly valued (internalize the externalities)are correctly valued (internalize the externalities)

Establish projects and policies on appropriate levels -- Establish projects and policies on appropriate levels -- community, watershed, national, regional, global – community, watershed, national, regional, global – generally with corresponding implementation/ generally with corresponding implementation/ financing mechanismsfinancing mechanisms

Incorporate institutional development and new Incorporate institutional development and new technologiestechnologies

Reduce risks and vulnerabilities of farming Reduce risks and vulnerabilities of farming communitiescommunities Diversify cropping systems for economic and environmental Diversify cropping systems for economic and environmental

resilienceresilience Weather forecasting to aid planting date and management Weather forecasting to aid planting date and management

decisions.decisions. Weather and price crop insurance.Weather and price crop insurance.

Sustainable Development Sustainable Development Principles (How?)Principles (How?)

Principles for Effective Principles for Effective Public InterventionsPublic Interventions

Socially profitable and non-Socially profitable and non-distortionary with respect to distortionary with respect to underlying long run pricesunderlying long run prices

Pro-poor targeting mechanismsPro-poor targeting mechanisms Demand-driven: maximize private Demand-driven: maximize private

sector/community involvement in sector/community involvement in priority setting and implementationpriority setting and implementation

Co-financing by beneficiariesCo-financing by beneficiaries Exit strategy where appropriateExit strategy where appropriate

Five NRM Elements of Five NRM Elements of Sustainability for Rural Sustainability for Rural

DevelopmentDevelopment

Reducing land degradation Improving water management Sustainable forestry Sustainable fisheries Incorporating global warming into

development planning

Reducing land degradation

Increase productivity on the Increase productivity on the “best” land“best” land

Diversify agroecosystems to Diversify agroecosystems to protect food systems, improve protect food systems, improve diets, minimize risks, diversify diets, minimize risks, diversify incomes, and conserve incomes, and conserve agrobiodiversityagrobiodiversity

Rehabilitate productivity and Rehabilitate productivity and ecosystem functions of ecosystem functions of degraded lands to enhance degraded lands to enhance environmental roles e.g. C environmental roles e.g. C sequestration – BioCarbon sequestration – BioCarbon fund.fund. Technologies include Technologies include

integrated soil fertility integrated soil fertility management, management, adapted adapted varieties, varieties, crop rotationcrop rotations, s, conservationconservation tillage, buffer tillage, buffer stripsstrips, , and organic farmingand organic farming

Strengthen local institutions Strengthen local institutions and facilitate community-and facilitate community-driven land and water resource driven land and water resource management for managing management for managing shocks, stresses, and global shocks, stresses, and global trade barrierstrade barriers

Example of Successful NRM Example of Successful NRM Project: Project:

Eastern Anatolia Watershed (I)Eastern Anatolia Watershed (I) Control soil erosion and Control soil erosion and

stabilize slopes to stabilize slopes to protect local protect local communities, towns, communities, towns, rivers, dams.rivers, dams.

Reintroduce native Reintroduce native species (oaks, pines, species (oaks, pines, walnut, wild cherry & walnut, wild cherry & almond, rose) along almond, rose) along contour ridges and contour ridges and terraces for soil and terraces for soil and native biodiversity native biodiversity conservation and income conservation and income generation.generation.

Improving water management

Elements of Water Resources Elements of Water Resources Management: Multiple Management: Multiple

objectives, multiple levelsobjectives, multiple levels

Water Resources Management

Water supply & sanitation

Irrigation & drainage

Energy

Environ-mental

services

Infrastructure for Infrastructure for management of floods management of floods

and droughts, and droughts, multipurpose storage, multipurpose storage,

water quality and water quality and source protectionsource protection

Institutional Institutional frameworkframework

Management Management instrumentsinstruments

Political economy of Political economy of water managementwater management

Other uses including

industry and navigation

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

resources

Irrigation has been successful in Irrigation has been successful in lifting many rural poor out of lifting many rural poor out of poverty…trick is to do it in a poverty…trick is to do it in a

sustainable mannersustainable manner

Average income levels & irrigation intensity in India

Managing Water Sustainably: Managing Water Sustainably: the Dublin Principles in the Dublin Principles in

operationoperation The “ecological” principleThe “ecological” principle::

Strategies should be holistic Strategies should be holistic (including environment), (including environment), comprehensive, inter-sectoralcomprehensive, 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…)

Challenges in water Challenges in water managementmanagement

Small stocks of water infrastructure in Small stocks of water infrastructure in developing countries compared to those in developing countries compared to those in climatically similar industrial countriesclimatically similar industrial countries

Simultaneous need for institutional Simultaneous need for institutional solutions/ reformssolutions/ reforms

Pricing for fiscal sustainability and to Pricing for fiscal sustainability and to encourage conservation (agriculture encourage conservation (agriculture uses about 70% of water, and is very uses about 70% of water, and is very wasteful)wasteful)

Ownership and devolution of Ownership and devolution of management responsibilitymanagement responsibility

Urgency in developing an integrated Urgency in developing an integrated package of structural and non-structural package of structural and non-structural tools which respond to the imbalances by tools which respond to the imbalances by human demand and hydrologic patterns human demand and hydrologic patterns accentuated by global changesaccentuated by global changes

Making Forestry more Making Forestry more SustainableSustainable

Forests are especially Forests are especially important to the poor…important to the poor…

1.6 billion rural people are dependent upon forests to some 1.6 billion rural people are dependent upon forests to some extent.extent.

1 billion out of 1.2 billion extremely poor depend on forest 1 billion out of 1.2 billion extremely poor depend on forest resources for part of their livelihoodsresources for part of their livelihoods

350 million people are highly dependent on forests.350 million people are highly dependent on forests. 60 million indigenous people are almost wholly dependent on 60 million indigenous people are almost wholly dependent on

forests.forests.

Source: World Bank Forests Strategy and Policy, 2002.Source: World Bank Forests Strategy and Policy, 2002.

CountryCountry Forest Dependent PopulationForest Dependent Population

IndiaIndia 275 million275 million

CongoCongo 62.6 million62.6 million

IndonesiaIndonesia 40-70 million40-70 million

MyanmarMyanmar 25 million25 million

VietnamVietnam 20 million20 million

TurkeyTurkey 8 million8 million

Source: APFSOS, WP/27Source: APFSOS, WP/27

… … and to the global and to the global economy…economy…

Production of wood and manufactured forest products Production of wood and manufactured forest products contribute more than US$450 billion to the world market contribute more than US$450 billion to the world market economy.economy.

The annual value of internationally traded forest products The annual value of internationally traded forest products totals US$150-200 billion.totals US$150-200 billion.

Globally, forest based industries provide about 47 million full Globally, forest based industries provide about 47 million full time jobstime jobs..

… … and the environmentand the environment

Forest destruction is responsible for Forest destruction is responsible for global biodiversity losses of 2-5% per global biodiversity losses of 2-5% per decade; decade;

Forest destruction (especially though Forest destruction (especially though burning) is estimated to contribute burning) is estimated to contribute between 10 and 30% of all carbon gas between 10 and 30% of all carbon gas emissions into the atmosphere; slowing emissions into the atmosphere; slowing deforestation and restoring forests are deforestation and restoring forests are important elements of a strategy for important elements of a strategy for slowing global carbon emissions.slowing global carbon emissions.

3 Pillars of Sustainable 3 Pillars of Sustainable ForestryForestry

Harnessing the potential of Harnessing the potential of

forests to reduce povertyforests to reduce poverty Integrating forests into Integrating forests into

sustainable economic sustainable economic development development

Protecting local and Protecting local and global forest valuesglobal forest values

Fighting PovertyFighting Poverty

Supporting policy, institutional and legal frameworks Supporting policy, institutional and legal frameworks for forest development and to ensure rights of for forest development and to ensure rights of forest-dependent peoples;forest-dependent peoples;

Promoting the scaling up of collaborative forest Promoting the scaling up of collaborative forest management;management;

Integrating forest, agro-forestry, and small Integrating forest, agro-forestry, and small enterprises into rural development strategies.enterprises into rural development strategies.

Making forestry Making forestry sustainablesustainable

Supporting the development of policies and Supporting the development of policies and projects for sustainable forest management and projects for sustainable forest management and conservation;conservation;

Building capacity for improved governance;Building capacity for improved governance; Supporting the containment of illegal activities;Supporting the containment of illegal activities; Addressing fiscal and trade issues related to forest Addressing fiscal and trade issues related to forest

sector and products;sector and products; Proactively promoting catalytic investments in forest Proactively promoting catalytic investments in forest

management and conservationmanagement and conservation..

Improving governance Improving governance requiresrequires

Institutional reforms/buildingInstitutional reforms/building Political accountabilityPolitical accountability Competitive private sectorCompetitive private sector Public sector reform (including judiciary and Public sector reform (including judiciary and

police)police) Civil society participationCivil society participation

Institutional reformsInstitutional reforms

Establish clear property rightsEstablish clear property rights Establish well-defined permanent forest estatesEstablish well-defined permanent forest estates Reduce distortions to trade in forest productsReduce distortions to trade in forest products Set the “right” level of forest taxation and rent Set the “right” level of forest taxation and rent

capture capture Simplify forestry legislation and strengthen Simplify forestry legislation and strengthen

implementationimplementation

Examples of institutional Examples of institutional reformsreforms

PhilippinesPhilippines: Multisectoral Forest Protection : Multisectoral Forest Protection CommitteesCommittees

CambodiaCambodia: Forest Crime Monitoring Unit: Forest Crime Monitoring Unit BrazilBrazil: Geo-referenced licensing system and : Geo-referenced licensing system and

identification of illegal logging from land-use identification of illegal logging from land-use monitoring via satellite imagerymonitoring via satellite imagery

IndiaIndia: Village Forest Protection Committee (Joint : Village Forest Protection Committee (Joint Forest Management)Forest Management)

BoliviaBolivia: Legislative reforms conferring greater : Legislative reforms conferring greater responsibility to individuals and local responsibility to individuals and local communitiescommunities

EcuadorEcuador: Independent certifiers and outsourcing : Independent certifiers and outsourcing of supervisory functions of the forest departmentof supervisory functions of the forest department

GhanaGhana: Timber Utilization Contracts: Timber Utilization Contracts

Protecting local and Protecting local and global valuesglobal values

Build markets for international public goods such as Build markets for international public goods such as carbon;carbon;

Build national markets for environmental services;Build national markets for environmental services; Strengthen policies and investments in Strengthen policies and investments in

conservation and protected areas;conservation and protected areas; Assure that investments and programs do no direct Assure that investments and programs do no direct

or indirect harm to the permanent forest estate.or indirect harm to the permanent forest estate.

Effective certification Effective certification requiresrequires

compliance with relevant laws; compliance with relevant laws; recognition of and respect for any legally recognition of and respect for any legally

documented or customary land tenure and use rights documented or customary land tenure and use rights as well as the rights of indigenous peoples and as well as the rights of indigenous peoples and workers; workers;

measures to maintain or enhance sound and effective measures to maintain or enhance sound and effective community relations; community relations;

conservation of biological diversity and ecological conservation of biological diversity and ecological functions; functions;

measures to maintain or enhance environmentally measures to maintain or enhance environmentally sound multiple benefits accruing from the forest; sound multiple benefits accruing from the forest;

prevention or minimization of the adverse prevention or minimization of the adverse environmental impacts from forest use; environmental impacts from forest use;

effective forest management planning; effective forest management planning; active monitoring and assessment of relevant forest active monitoring and assessment of relevant forest

management areas; andmanagement areas; and the maintenance of critical forest areas and other the maintenance of critical forest areas and other

critical natural habitats affected by the operation.critical natural habitats affected by the operation.

Sustainable FisheriesSustainable Fisheries

Why are fisheries so Why are fisheries so important to developing important to developing

countries?countries?Trade and income Trade and income generation on national generation on national and global levels :and global levels :

Global trade of US$ 55-66 Global trade of US$ 55-66 billion annually, with 50 per billion annually, with 50 per cent of trade from cent of trade from developing countries 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.License fee income.

And important for poverty And important for poverty reductionreduction

A Source of Livelihoods & Income for 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 Security for 400 million poor people;

Potential source of alternative employment for rural poor through aquaculture.

Key elements in sustainable Key elements in sustainable fisheries strategy: (1) fisheries strategy: (1)

GovernanceGovernance 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 SystemsEstablishing shared governance responsibility for the fisheries between government and local users

Key elements in sustainable Key elements in sustainable fisheries strategy: (2) fisheries strategy: (2) Fisheries managementFisheries management

Fishing Capacity Reduction;Fishing Capacity Reduction; Decommissioning fishing vessels or

buying back licenses is the most direct way of tackling overcapacity

Fully Protected Marine Reserves Fully Protected Marine Reserves and Marine Protected areas;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

Global WarmingGlobal Warming

Prototype Carbon Fund Prototype Carbon Fund (PCF)(PCF)

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

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

Caribbean7%

South Asia4%

Subsaharan Africa29%

Eastern Europe12%

East Asia5%

Latin America43%

Commercial plantations

11% Avoided deforestation

7%

Environmental plantings

38%

Sustainable agriculture

1%

Agroforestry21%

Silvopastoral3%

Community reforestation

19%

The Role of Trade in Agriculture The Role of Trade in Agriculture and Rural Developmentand Rural Development

The Role of TradeThe Role of Trade Agriculture (including fisheries and Agriculture (including fisheries and

forestry products) is a highly tradable forestry products) is a highly tradable sectorsector

Trade is the best lever for agricultural Trade is the best lever for agricultural growthgrowth

Raising incomes mitigates pressure on the Raising incomes mitigates pressure on the environmentenvironment

Not all increases in trade are Not all increases in trade are environmentally benign, but….environmentally benign, but…. The best solution is generally to target The best solution is generally to target

the problem directly by adopting the problem directly by adopting appropriate environmental policies, not to appropriate environmental policies, not to restrict trade, and…restrict trade, and…

Trade gives consumers a powerful lever to Trade gives consumers a powerful lever to effectuate change in the supplying effectuate change in the supplying country (fair trade, certification)country (fair trade, certification)

But developing countries’ share of But developing countries’ share of agricultural exports to rich countries agricultural exports to rich countries

have stagnated, while South-South have stagnated, while South-South trade has grown, suggesting that trade trade has grown, suggesting that trade

barriers need to be lowered….barriers need to be lowered….

1980/81 1990/91 2000/01 Agriculture Total 35.4 32.2 36.3 To Developing 9.5 8.9 13.4 To Industrialized 25.8 23.3 22.9 Manufacturing Total 19.3 22.7 33.4 To Developing 6.6 7.5 12.3 To Industrialized 12.7 15.2 21.1 Source: COMTRADE

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