Sustainable Development Sustainable Development Strategies in Agriculture and Strategies in Agriculture and

Rural DevelopmentRural DevelopmentWTO Symposium on Trade and Sustainable WTO Symposium on Trade and Sustainable

DevelopmentDevelopment10- 11 October, 200510- 11 October, 2005

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

The World BankThe World Bank

Outline of this PresentationOutline of this Presentation Why is Agriculture so Important for Poverty Reduction and Sustainable Why is Agriculture so Important for Poverty Reduction and Sustainable

Rural Development?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 DevelopmentThe Role of Trade in Agriculture and Rural Development

Agriculture, Poverty and Rural Agriculture, Poverty and Rural DevelopmentDevelopment

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

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

in rural areasin rural areas

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

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

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

Poverty is disproportionately Poverty is disproportionately ruralrural

Burk

ina

Ugan

daM

aurit

ani

Tanz

ania

Moz

ambi

qNi

ger

Zamb

iaG

ambi

aEt

hiop

iaG

hana

Mal

awi

Cam

bodi

aVi

etna

mMo

ngol

iaKy

gyz

Geo

rgia

Hond

uras

Nica

ragu

Yem

enNe

pal

Sri L

anka

Rural 51 46 68 50 71 66 80 61 47 34 67 40 57 33 70 10 51 69 45 44 27Urban 17 16 25 24 62 52 56 48 37 27 55 21 26 39 49 12 57 31 31 23 15Difference 34 30 43 26 9 14 24 13 10 7 12 19 31 -6 21 -2 -6 38 14 21 12

Pover ty Rates

Poverty Rates from PRSPs

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

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

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

Fiscal and institutional sustainability: must be realistic Fiscal and institutional sustainability: must be realistic about cost and institutional requirements of instrumentsabout cost and institutional requirements 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 are resources by ensuring that all environmental services are correctly valued (internalize the externalities)correctly valued (internalize the externalities)

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

Incorporate institutional development and new technologiesIncorporate institutional development and new technologies

Reduce risks and vulnerabilities of farming communitiesReduce risks and vulnerabilities of farming communities Diversify cropping systems for economic and environmental resilienceDiversify cropping systems for economic and environmental resilience Weather forecasting to aid planting date and management decisions.Weather forecasting to aid planting date and management 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-distortionary with Socially profitable and non-distortionary with respect to underlying long run pricesrespect to underlying long run prices

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

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

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

Five NRM Elements of Sustainability Five NRM Elements of Sustainability for Rural Developmentfor Rural Development

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

planning

Reducing land degradation Increase productivity on the “best” landIncrease productivity on the “best” land Diversify agroecosystems to protect Diversify agroecosystems to protect

food systems, improve diets, minimize food systems, improve diets, minimize risks, diversify incomes, and conserve risks, diversify incomes, and conserve agrobiodiversityagrobiodiversity

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

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

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

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

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

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

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

Improving water management

Elements of Water Resources Elements of Water Resources Management: Multiple objectives, Management: Multiple objectives,

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

sustainable mannersustainable manner

Average income levels & irrigation intensity in India

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

The “ecological” principleThe “ecological” principle:: Strategies should be holistic (including Strategies should be holistic (including

environment), comprehensive, inter-environment), comprehensive, inter-sectoralsectoral......

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 managementChallenges in water management

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

Simultaneous need for institutional solutions/ reformsSimultaneous need for institutional solutions/ reforms Pricing for fiscal sustainability and to encourage Pricing for fiscal sustainability and to encourage

conservation (agriculture uses about 70% of water, conservation (agriculture uses about 70% of water, and is very wasteful)and is very wasteful)

Ownership and devolution of management Ownership and devolution of management responsibilityresponsibility

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

Making Forestry more SustainableMaking Forestry more Sustainable

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

1.6 billion rural people are dependent upon forests to some extent.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 1 billion out of 1.2 billion extremely poor depend on forest resources for part

of their livelihoodsof 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 forests.60 million indigenous people are almost wholly dependent on 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 economy…and to the global economy…

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

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

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

… … and the environmentand the environment

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

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

3 Pillars of Sustainable Forestry3 Pillars of Sustainable Forestry

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 sustainableMaking forestry sustainable

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 requiresImproving governance requires

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 reformsExamples of institutional reforms

PhilippinesPhilippines: Multisectoral Forest Protection Committees: Multisectoral Forest Protection Committees CambodiaCambodia: Forest Crime Monitoring Unit: Forest Crime Monitoring Unit BrazilBrazil: Geo-referenced licensing system and identification : Geo-referenced licensing system and identification

of illegal logging from land-use monitoring via satellite of illegal logging from land-use monitoring via satellite imageryimagery

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

BoliviaBolivia: Legislative reforms conferring greater : Legislative reforms conferring greater responsibility to individuals and local communitiesresponsibility to individuals and local communities

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

GhanaGhana: Timber Utilization Contracts: Timber Utilization Contracts

Protecting local and global valuesProtecting local and global 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 requiresEffective certification requires compliance with relevant laws; compliance with relevant laws; recognition of and respect for any legally documented or recognition of and respect for any legally documented or

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

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

conservation of biological diversity and ecological functions; conservation of biological diversity and ecological functions; measures to maintain or enhance environmentally sound multiple measures to maintain or enhance environmentally sound multiple

benefits accruing from the forest; benefits accruing from the forest; prevention or minimization of the adverse environmental impacts prevention or minimization of the adverse environmental impacts

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

areas; andareas; and the maintenance of critical forest areas and other critical natural the maintenance of critical forest areas and other critical natural

habitats affected by the operation.habitats affected by the operation.

Sustainable FisheriesSustainable Fisheries

Why are fisheries so important to Why are fisheries so important to developing countries?developing countries?

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

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

And important for poverty reductionAnd important for poverty reduction

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 fisheries Key elements in sustainable fisheries strategy: (1) Governancestrategy: (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 SystemsEstablishing shared governance responsibility for the fisheries between government and local users

Key elements in sustainable fisheries Key elements in sustainable fisheries strategy: (2) Fisheries managementstrategy: (2) Fisheries 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 and Fully Protected Marine Reserves and Marine Protected areas;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 (PCF)Prototype Carbon Fund (PCF)

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

products) is a highly tradable sectorproducts) is a highly tradable sector Trade is the best lever for agricultural growthTrade is the best lever for agricultural growth Raising incomes mitigates pressure on the Raising incomes mitigates pressure on the

environmentenvironment Not all increases in trade are environmentally Not all increases in trade are environmentally

benign, but….benign, but…. The best solution is generally to target the The best solution is generally to target the

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

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

But developing countries’ share of agricultural But developing countries’ share of agricultural exports to rich countries have stagnated, while South-exports to rich countries have stagnated, while South-South trade has grown, suggesting that trade barriers South trade has grown, suggesting that trade barriers

need to be lowered….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

But that’s another But that’s another l-l-l-o-o-o-n-n-n-g l-l-l-o-o-o-n-n-n-g

storystory

ThanksThanks