Overview of Most Effective Approaches to Mainstream Biodiversity in Rural Development

1. Overview of Most Effective Approaches to Mainstream Biodiversity in Rural Development Presented on behalf of Marjory-Anne Bromhead, Advisor, ARD

2. 75% of the world’s poor are rural and most are involved in farming In the 21st century, agriculture remains fundamental for poverty reduction, economic growth and environmental sustainability. World Development Report 2008

3. Growth from Agriculture is Especially Effective for Poverty Reduction GDP growth from agriculture benefits the income of the poor 2-4 times more than GDP growth from non-agriculture (43 countries)

4. Agricultural-based countries spend too little on agriculture (and R&D). Challenges Ag GDP/GDP

5. Challenges “Mis-investment” is also pervasive. Subsidies Public Investment

6. Challenges AGRICULTURE 4% OFFICIAL DEVELOPMENT ASSISTANCE (12% in 1990) WORLD POOR PUBLIC SPENDING (Sub-Saharan Africa) AGRICULTURE 4% RURAL 75%

7. What Should We Do? • Accelerate smallholder productivity increases for agricultural growth and food security in Africa; • Follow a comprehensive approach to reduce rural-urban disparities and poverty in transforming countries of Asia; • Enhance sustainability and environmental services from agriculture; • Pursue multiple pathways out of poverty: smallholder farming, labor market, rural non-farm employment, migration, etc. • Improve the quality of governance in agriculture at local, national, and global levels.

8. 2009-2012 Agriculture Action Plan - 5 pillars 1.Raise agricultural productivity 2.Link farmers to market & strengthen value chains 3.Reduce risk and vulnerability 4. Facilitate agricultural entry, exit & rural non-farm income 5. Enhance environmental services and sustainability

9. Societies depend on natural and managed ecosystem resiliency – watersheds, soils, hydrology, forests, wetlands, coral reefs, agriculture and grazing land, fisheries – for fuel, water, fiber, safety, recreation and for many other things.

10. How Can Biodiversity Benefit Agriculture? • Genetic biodiversity improves agricultural productivity • Ecosystem resiliency sustains land and water productivity • Biodiversity increases adaptive capacity of agricultural production to stresses • Biodiversity sustains essential functions such as pollination, pest/disease regulation, nutrient recycling

11. Important user of natural resources: • 70% of fresh water resources • 40% of land area • 30% of greenhouse gas emissions Many Opportunities: Sustainable farming systems & environmental services(conservation farming, agroforestry, managing landscapes for climate resilience) Contributions to greenhouse gas emissions Developing country agriculture & deforestation 21% Developing country other sources 15% Industrialized countries 64% Environmental Sustainability

12. From degradation to carbon sequestration.. From desertification to sustainable management.. From pollution to biogas and clean water.. Lifting Livestock’s Long Shadow

13. Sustainable Forest Management Provides: Energy Timber Coastal Zone Protection Ecosystem Services and Forests Freshwater Resource Conservation Mountain Development Biodiversity and many more… Watershed Soil Conservation

14. Fisheries Contribute to Food Security and Livelihoods and Depend on Healthy Aquatic Ecosystems. • Since 2005 the Bank has an expanding project pipeline (35 projects & US$330 million in IBRD/IDA) and by establishing the PROFISH partnership. • Essential nutrition for 3 billion people; livelihoods of >500 million in developing countries; • Aquaculture = World’s fastest growing food production system (7% annual growth);

15. The Study • Input into the new environment strategy • Reviews a sample of ARD operations with biodiversity conservation co-benefits. Bottom line: With some important exceptions, and for a variety of reasons, biodiversity conservation has not featured prominently in the agriculture and rural development portfolio, though there has been more focus on broad ecosystem restoration in programs which aim to restore land and water productivity.

16. The Sample of Projects • ARD projects categorized into 7 subsectors: agricultural productivity; community action; forestry; fisheries and coastal zone management; irrigation, drainage and water resource management; NRM and watershed management; and land administration. • To get a better picture of ongoing ARD work, mostly excluded closed projects, and GEF-only projects, and all regions have been included.

17. Types of Biodiversity Interventions in the Projects Sampled • Most projects have supported the restoration of land and water ecosystem functions, which have provided the base for recovery of wetlands, grasslands, forests and watersheds, and revival of a wide variety of fauna and flora. • Operations which have supported ecosystem restoration have mostly addressed integrated watershed management, irrigated land restoration, and forestry.

18. Key Findings 1. With some important exceptions, recent agriculture and rural development operations supported through IBRD lending and IDA credits have not aimed explicitly to support biodiversity conservation. 2. GEF co-financing has helped to pilot incorporation of biodiversity into agricultural and rural development projects but recently for all but the countries richest in biodiversity, GEF biodiversity funding has been very limited.

19. KeyFindings 3. Forestry operations have mostly included biodiversity conservation as an explicit objective, in recognition of the multiple services that forests provide. However, overall Bank support to forestry is limited, accounting for less than 0.5% of Bank lending. 4. Bank fisheries operations often include support to enhanced ecosystem management; but overall support remains limited, although it is gradually increasing.

20. Key Findings 5. There are also more recent examples in middle income countries of rural competitiveness operations which also support ecosystem recovery (Latin America, Europe). 6. There are also cases of supporting rural income enhancement through development of ecosystem services (forests for water services in Costa Rica, landscapes for tourism in Montenegro) but mostly in upper middle income countries.

21. Key Findings 7. Operations which have supported ecosystem recovery together with long term productivity enhancement include Loess Plateau in China, Eastern Anatolia in China, a series of Sodic lands recovery operations in India, policy lending in Mexico, irrigation/drainage/wetland restoration programs in the Lower Aral sea basin. Common features have included a long term commitment and a commitment to intervene “at scale”.

22. Key Findings 8. The current global food security initiative (GASFP) does not address ecosystems recovery or biodiversity in the pillars it supports. 9. Climate change offers opportunities for renewed focus on ecosystems recovery both as part of climate resilience and of low carbon growth/carbon sequestration and the community of practice should take advantage of this.

23. Examples of Agriculture and Rural Development Projects with Ecosystems Conservation Components

24. Turkey: Eastern Anatolia Watersheds Total budget $70 million (Various phases 1993 -2012) The project aims to support sustainable NRM practices and thereby raise incomes of communities affected by resource degradation. The GEF component aims to introduce farming practices which will reduce discharge of agricultural nutrients into surface and ground water in watersheds.

25. Large Scale Application of Community Driven “Land & Water” Good Practice

26. Community Adoption of Controlled Grazing Critical to Landscape Recovery

27. Water Flows & Water Quality Impacts of Landscape Recovery

28. Loess Plateau, China: The Long March to Sustainable Landscapes Total budget $252 million (1992-2003 Various phases)

29. Loess Plateau • Covers ~ 2 million ha in 12 river basins of the Loess Plateau • Aims to increase agricultural production and incomes and improve ecological conditions in tributary watersheds of the Yellow River. • Features comprehensive development of small watersheds (integration of forestry, soil and water conservation, agriculture, and livestock sectors), with interventions to combat soil erosion, and raise agricultural productivity and farm incomes. • Direct impacts on biodiversity due to: increased vegetative and forest cover, better managed grassland, terraced cropland, dams, more secure land-use rights, taking certain areas out of crop production to allow natural re-vegetation or planting native species, etc.

30. Syr Darya Control and Northern Aral Sea 64.5 million (2001-2006) • The project is designed to improve water management in the Syr Darya basin in Kazakhstan and to reverse the environmental degradation from the decline of the Aral Sea. • The project aims to enhance agricultural and fish production as well as improve human health and biodiversity through interventions such as the construction of ah dike across the channel; rehabilitation of barrages supplying water and the Chardara dam; aquatic restoration and fisheries development.

31. The Shrinking Aral Sea: 1973, 1986, 2004

32. Aral Sea Expansion April 2005 Increase in yields of freshwater fish, sturgeon and caviar, and with increased rainfall, the improving climate is benefiting air, soil and water qualities, biodiversity and flora/fauna. April 2006

34. UP Sodic Lands Reclamation III $272 million (2009 – 2015) • Built on the successes of the first and second phases of the project which helped farmers reclaim over 250,000 hectares of unproductive land. Over 425,000 poor families have benefitted so far, experiencing a three- to six-fold increase in crop yields. • The project aims to increase agricultural productivity of degraded lands by reversing water-induced land degradation, enhancing soil fertility, and improving the provision of agriculture support services.

35. Mozambique Market-Led Smallholder Development in the Zambezi Valley

36. Mozambique Market-Led Smallholder Development in the Zambezi Valley Total budget 27.40 million; 6.20 million GEF component (2006 -2012) The project aims to increase the income of smallholder farmers of the Zambezi Valley region, through direct support to smallholder groups and other supply chain participants as well as through local level capacity building. The GEF component is there to ensure that land degradation is stopped and reversed and to improve the ecosystem’s resilience towards climate change in the central Zambezi valley.

37. Santa Catarina Rural Competitiveness Project(Total Budget $180 million) Objective is to increase the competitiveness of rural family agriculture producer organizations and to support it by improved public-services-providing activities. • Ecosystem Management component that aims to implement Ecological Corridors by creating areas of biodiversity conservation-friendly land use mosaics, established on private lands, supporting ecological corridor connectivity in project watersheds. • Development and implementation of incentive mechanisms involving private/productive lands that requires rehabilitation or preservation (to comply with environmental legislation and/or receive PES) or improvement to obtain e.g. certification or to add ecological value to their production.

38. Improving the Enabling Environment: Challenges and Opportunities Instruments: CAP, WTO, Vertical Funds

39. Challenge: Donor Support to Agriculture % rural poverty % ODA to Ag

40. Challenge: Increasing Land &Water Constraints Cropland per capita of agricultural population % of population in absolute water scarcity

41. Opportunity: Recognition of the need to increase food production, due to increasing global food demand.

42. Opportunity: Growing annual World Bank commitments to agriculture ($3.6 billion in 2009)

43. Meat Horticulture Cereals Opportunity: A new agriculture of high value products and non-traditional exports. Developing country consumption Developing country exports

44. How can renewed focus on agriculture also renew focus on the link between ecosystem services and agriculture? Renewed focus on the challenges of… • Long term land and water productivity enhancement versus short term production needs • Upstream-downstream trade-offs • Private versus public goods • Local versus global public goods

45. Vertical Funds: Challenges and Opportunities • The GEF supports biodiversity • Climate funds provide opportunities • GASFP does not mention ecosystem services • Do the vertical funds risk fragmenting the ecosystem services agenda or support it? • How can we mainstream ecosystems in agricultural support measures?

46. EU Common Agricultural Policy (CAP) 2007-2013 Pillar I: Pillar II: ~ 80% ~ 20% RD measures Production Subsidies • RD Core objectives: • Improving farm & forestry sector competitiveness through restructuring, development & innovation support • Improving environment & countryside through support for land management • Improving quality of life in rural areas & encouraging diversification of economic activity

47. Axes to implement the objectives Priority Axis 1: Competitiveness of Agriculture and Forestry Priority Axis 2: Improving the Environment and Countryside Priority Axis 3: Quality of Life and Diversification of the Rural Economy “LEADER” Axis: Area-based, bottom-up, local partnership

48. Axis 2: Improving the Environment and Countryside Agricultural land:Mountain areas; other areas with handicaps; Natura 2000 areas; agri-environment; animal welfare; support for non-productive investments Forestryland:First afforestation; first establishment of agro-forestrysystems, Natura 2000 areas; forest-environment; restoringforestrypotential and introducingprevention actions; support for non-productive investments

49. Agri-Environment Programmes Payments to farmers from public money to produce environmental products/services by maintaining, enhancing or restoring traditional landscapes, valuable wildlife habitats and other areas rich in natural, cultural and historical features. Types of AE Schemes: “Broad and shallowschemes”- benefits to biodiversity, landscape, water quality throughout the countryside. “Higher” or specialised schemes targeting specific habitats and species

50. WTO ‘Green box’ Mechanisms (WTO terminology: subsidies are identified by “boxes”) • Amber Box Measures: Agricultural subsidies/domestic support measures that can distort production and/or change the flow of trade • Examples: commodity-specific market price supports, direct payments and input subsidies. • Green Box Measures: Agriculture-related subsidies that are not trade distorting and include direct income supports for farmers that are decoupled from current production levels and/or prices. • Examples: environmental and conservation programs, research funding, inspection programs, domestic food aid including food stamps, and disaster relief.