Why Agriculture Matters For Sustainable Development

Notes for the Dublin Speech : Why agriculture matters for sustainable development Ian Johnson Good evening to all of you and, again a special thank you to the Department of Agriculture and Food and the government of Ireland for their generous hospitality and efforts in helping us host this two day meeting. Over the past five to ten years we have seen the growth of a great many environmental treaties. The international treaties on climate change (including the Kyoto Protocol); ozone depleting substances; biodiversity; desertification, and, more recently, the convention on persistent organic pollutants have placed the global environment firmly on the international agenda. The Earth Summit followed by the most recent meeting in Johannesburg has moved our thinking from environment and development to sustainable development. At the turn of the millennium, world leaders pledged their commitment to the so called millennium development goals – or MDGs – an ambitious agenda together with specific targets dedicated to reducing global poverty. Earlier this year, the Monterrey meeting on finance and development provided new development funds designed to meet the MDGs. In agriculture we have witnessed the start up of the Doha round on trade as well as the International undertaking on genetic resources. To this we can add a great many other treaties, international meetings and commitments.

This breath-taking increase in ostensible internationalism and the rich mosaic of international commitments presents unparalleled opportunities for the world to “fix itself”

by both tackling the crippling poverty and injustice we see in today’s world as well as facing the challenges of tomorrow’s world by placing our planet on a long term sustainable path. If the political will is found and sustained to meet all the targets, and commitments are made to fund actions to match the fine rhetoric we will have made a good start to the long and arduous journey towards a truly sustainable and just world. Failure cannot be contemplated. In many respects the Johannesburg meeting broke new ground. The quality, intensity and breadth of debate amongst all segments of civil society (governments, NGOs, and the private sector) truly moved inter-stakeholder discourse to a new level. The discourse was wide ranging reflecting the need to think broadly about sustainable development and not simply about adding an environmental dimension. The discussions were about our immediate future as well as the future for our children and their children. And increasingly a view by many at the meeting that we are a highly connected part of a small global village. Long term sustainable development required growth with environmental and social responsibility by all. Johannesburg provided much to feast upon. Indeed, as with other summits, they can be defining meetings -- shaping agendas and issues well beyond the consummate word-smithing of diligent bureaucrats. Such summits provide broad platforms to air big issues. I believe that the Johannesburg legacy may well be that

(one) it positioned the issue of poverty well beyond an issue of development assistance but at the heart of the long-term sustainability of our planet. Poverty reduction was discussed as an economic, ecological and moral imperative. (two) it implicitly suggested that we need new institutions to deal with the emerging issues faced by our planet. To some, it signaled the limitations of inter-governmental negotiations and the cry for new approaches to public policy making -- approaches that are inclusive of all stakeholders (including governments) yet agile and efficient. Consultations without decisions, actions without new forms of broad-based accountability are doomed in the long term. Such thinking is also fully aligned with many organizational theorists such as Peter Drucker who argue that future institutions will be network-based, agile and inclusive – something not in great evidence in the intergovernmental tradition. (three) it identified key sectoral issues that needed to be addressed over the long-term to ensure both increased prosperity and poverty elimination but also to ensure environmental sustainability and social accountability. WEHAB -- a concocted acronym -- was invented to target water, energy, health, agriculture and biodiversity, all central to long term sustainability although I believe it was a mistake to not include education also. Perhaps it would have produced a less saleable acronym -- WEHEAB!

(four) it explicitly placed long-term thinking and actions that underpin sustainability. Thinking long-term -- in our World Bank contributions to the meeting we chose 2050 as

a useful frame of reference -- helps assess the actions, institutions and alliances needed today to meet tomorrows challenges. It helps us think through what social, technological, economic and ecological transformations will be needed to move us towards sustainability. Our thoughts about tomorrow’s world must , of course, not undermine our concern for today’s world. And indeed for many the Johannesburg dialogue on sustainable development coincided with much uncertainty and trepidation about today – the tragic food crisis on South Africa’s doorstep, affecting over 14 million people. The constant thought of war, civil disturbance and disruption. The large and increasing social inequities within and between countries. The injustice of massive trade distortions and the low flow of funds from North to South. The concern of global poverty – with 2 billion people living on less than a dollar a day with poor access to basic services and with hunger affecting over 800 million and not improving. Tomorrow’s World And yet let us look ahead – to fifty years hence – within some of our lifetimes and certainly within the lifetime of our children. By then – with even modest growth rates consistent with meeting the 2015 goals and then eliminating absolute poverty we will be looking at a world GDP of around $140 trillion (compared with the $37.5 trillion economy of today) – an increment of around $100 trillion! We will have more than an additional 2 billion on this planet, almost all of whom will be living in the developing world. Demand for food will at least have doubled from today – driven both by extra mouths to feed and by the impact of modest income growth on food demand. Hunger

will be both an issue of access and supply. Energy needs will keep pace with per capita income growth and will likely result in a demand for electricity that will approach an additional 150 million Gigawatts of installed capacity. Demand for water will increase dramatically – for agriculture and for household use and with limited remedial action we could see half the world living under water stressed conditions. In addition, we will, by then have become an urban world. The infrastructure and housing needs if urban dwellers are to live healthy and productive lives will be huge. Neglecting our common environment could begin to impose high and as yet unknown costs : climate change and loss of biological diversity, both essentially irreversible at least in the medium term. Does Agriculture matter for the future? Let us now turn to the focus of this evening’s speech – to address the question of whether agriculture matters for tomorrow’s world and, if it does, what actions are needed to ensure it plays a full role in a sustainable future. From the outset, let me make no apologies for my conclusion -- that, along with energy, health and education, the agricultural sector is a cornerstone sector of long term sustainable development. I will structure my comments around two broad themes -(i)

Agricultures role in poverty reduction both through its impact on economic growth and its impact more directly on poverty reduction.

(ii)

Agricultures role in environmental sustainability.

I will conclude my talk with some observations on what actions are needed to move the agricultural agenda to provide us with a period of sustained responsible growth and prosperity. The role of agriculture for wealth creation and poverty reduction Today, in most OECD countries, agriculture accounts for less than 5% of Gross Domestic Product (GDP). The share of agriculture has historically fallen over the past two hundred years as mechanization, increased productivity and economic diversity have increased. In developing countries, agriculture remains at around 24%., although for the least developed countries, and especially those in Africa, it ranges from around 25% to 68%. In much of east and south Asia agricultures role has fallen somewhat but still remains an important sector. Few countries have been able to grow their economies without a solid contribution by agriculture -- it has long been an engine of growth. Indeed the Green Revolution and its emphasis on high yielding varieties provided the growth and aggregate economic surpluses that underpinned the Asian miracle. Wherever agriculture represents more than 10 to 15 % of GDP agricultural productivity and growth will be central to economic growth, and wherever fifty per cent or more of the population is rural and poor, agriculture is central to employment creation.

There is much empirical evidence on the relationship between agricultural growth and poverty reduction : A one per cent increase in agricultural GDP per capita led to a 1.6 per cent gain in the per capita incomes of the lowest income fifth of the population in 35 least developed countries analyzed (Timmer, 1997). A 10% increase in crop yields led to a reduction of between 6% and 10% of people living on less than a $ a day. For African countries, a 10% increase in yields led to a 9% decrease in the percentage of those living on $1 a day (Irz et al, 2001). Agricultural productivity gains in India between 1973 and 1994 increased real incomes of small farmers by 90% and that of landless laborers by 125% (World Bank,2001). Forests and forest products provide livelihoods for around 500 million people, most of whom are poor (World Bank). The demand for agricultural products will rise. Today, the world food problem stems largely from insufficient purchasing power in the hands of poor people, not from global productivity constraints per se. Total average calories per day has continued to increase world-wide and today stands at 3190 kilocalories per day for developed countries and 2385 kilocalories per day for developing countries (FAO) compared with an average benchmark of around 2200 kilocalories per day. Of course, such averages mask large variations – we still have over 800 million people who go to bed hungry and this number appears tragically to be growing. Targetting assistance to the hungry

continues to be a high priority for the world – the 2015 MDG target on hunger represents one of the key international commitments. Dealing with structural hunger, political hunger ( a sad reality in many countries affected by conflict) and environmental hunger ( as a result of episodic drought and inclement weather) must be kept under close and constant scrutiny. Total food availability also masks tremendous differences in micronut rient deficiencies – what M.S Swaminanthan has appropriately called the “hidden hunger” caused by deficiencies in iron, zinc and vitamin A. Targetted nutritional programs deserve increased support. Yet tomorrow we will witness an increase in demand for food. Population increases in the developing countries will clearly place new demands for food as we add 2 to 2.5 billion additional mouths to be fed by the middle of the century. But equally important will be changing dietary demands as incomes grow and households become less poor. We are already beginning to witness such transformations : Take India for example: In 1970 milk consumption was around 20 million tons (in contrast say with the United States at around 60 million tons). Today, consumption in India stands at a little above 80 million tons (and has just surpassed the United States) and growth in demand shows no signs of abating. Global meat demand is projected to grow from 209 million tons in 1997 to 327 million tons in 2020. Production of meat and milk in developing countries is expected to grow at rates of around six times greater than those of the developed world. : consumption doubling every 25 years or so. The impacts of such dramatic changes have

been called the “livestock revolution” – a revolution that places even greater strains on grain production, land use and natural habitats, and the environment (Delgado et al). Indeed, growth in demand for meat and milk is highly correlated with growth in income – in low income countries high income elasticities of up to 3 have been estimated (World Bank). Fish consumption is also increasing exponentially – average daily consumption has doubled in the past 40 years or so resulting in a huge growth in fish farming. Aquaculture has moved from around 8 per cent of total catch in the early 1980s to 25% today and within 25 years will be more than half of total catch globally. But future agriculture will also not only be focused on food security : multifunctionality will be a reality for many farmers in the South. Agro-forestry, carbon farming, ecology management and other services may well become important. The Kyoto Protocol for example offers new and exciting opportunities for engaging small farmers in agro-forestry, low till agriculture and other climate friendly activities that can be both profitable and environmentally responsible. Given the growth in demand then what can we expect with regard to future productivity ? Certainly we have witnessed a productivity boom since early agrarian times. From 8000 BC to around 1900 rice yields increased in India from one to two tons per hectare to today were potential yields of 12 tons per hectare are possible (Swaminathan). The “green revolution” provided considerable impetus for productivity gains and countries such as India and China have now become amongst the world’s largest

producers of rice, wheat, sugarcane and cotton. Not withstanding this major achievement however actual total productivity remains well below the potential at least when compared to the most productive. The figures for India are worth noting: Crop

production rank

Productivity (rank)

world highest

Rice

second

2.8 ton/ha (51)

7.4 ton/ha (Ukraine)

Wheat

second

2.5 ton/ha (32)

9.0 ton/ha (Ireland)

Pulses

First

0.6 ton/ha (118)

4.8 ton/ha (France)

In Africa we see even greater productivity gaps – for example for comparable crops and ecosystems an African farmer produces roughly one third of his or her east asian counterpart. While recognizing the important caveats on policy, weather variation and the like it is hard not to conclude that productivity gains within existing and known technologies are entirely feasible – something borne out of the recent successes in west Africa with respect to the high yielding African rice (NERICAs). Agriculture and environmental management Since our quest is to review the potential for agriculture to simultaneously increase incomes as well as protect the environment it is worth dwelling on the synergistic relationship between agriculture and environment : agriculture is dependent on the natural environment but equally our future environment is highly dependent on future farming practices

Jared Diamond has written prophetically about the relationship between agriculture and sustainability. In his research on the collapse of pre-industrial societies he points the finger to what he terms “ecological suicide” driven largely by unsustainable farming and harvesting practices. His analysis of the collapse of Easter Island is especially prophetic driven by extensive agriculture, massive land degradation and biodiversity mining and leads Diamond to note : “ the fate of Easter Island society seizes hold of the imagination, because the parallel between Easter Island isolated in the Pacific Ocean and Planet Earth isolated in our own galaxy is so obvious” (Diamond). But lets shift to contemporary times. We know that : Agriculture is the largest user and abuser of scarce water resources. More than 70 per cent of all water abstraction is used in agriculture, often highly inefficiently. Agricultural practices in some parts of the world are exacting a heavy toll on the quality and quantity of land. Land degradation in the tropics has been estimated to result in losses of agricultural GDP of up to 12 per cent per annum (Dixon, World Bank). The estimated population on ecologically fragile lands has doubled since 1950. Today, a quarter of the people in developing countries – 1.3 billion – survive on fragile lands, especially in arid and mountainous areas. Most eke out a living in agriculture. Many of these fragile lands are home to key biological diversity zones. Indeed, worldwide around 60 per cent of our known terrestial species occupy only 1.4 per cent of our land mass, mostly in developing countries and much of it under immediate threat

through land clearing, migration and unsustainable agricultural practices. (Conservation International). The growth in, and movement of, livestock also places new burdens on ecological management. Intensive livestock management and waste management in the developed world; land degradation in the arid and semi arid zones; and livestock and wildlife competition are all likely to be magnified in the future as we witness the livestock revolution mentioned earlier. Africa will present a special challenge – in the next few years modern science is almost certainly likely to reduce the impact of crippling bovine diseases (such as East Coast Cattle fever) which could result in an unheralded growth in cattle in areas of high biodiversity. Climate change and its effect on weather patterns could also spell doom for many poor farmers. The impact of climate change will be felt most by poor countries, and by poor people in those countries. In the absence of remedial actions, crop losses could be as high as 20 per cent. Climate change may exact many tolls – to the extent that it will increase the probability of natural disasters it is instructive to note that since 1975 the total number of people negatively affected by weather events is well over 4 billion, most in developing countries. Deaths due to flood and drought are ten times greater than those from earthquakes (Varangis). Increasing effort on both mitigation and adaptation must have a high priority for policy makers. The vagaries of weather have, of course, been a constant factor in determining farm income – in developing countries however such vagaries exact a high toll. Take the case of Morrocco where the principal determinant of economic growth and performance is directly related to weather and agricultural

performance : GDP growth rates since 1992 have been negative in every year with poor rainfall (as high as minus 6 per cent) yet as high as 12 per cent plus in years of good rainfall. Yet the environment may also offer opportunities to the agricultural sector. Low and no tillage schemes and community forestry management programs could provide supplemental income to farmers. Small scale “carbon farming” is being piloted by the World Bank through its community carbon fund. Farmers are the natural stewards of natural resources and could begin to play a broader role in ecological management as is occurring in some parts of Africa and Europe. Local knowledge will yield a high premium. The Social Dimensions of Agriculture. Let me now turn to the final leg of our three legged sustainability stool – social responsibility and accountability to complement productive income growth and environmental responsibility. Agrarian societies, especially in developing countries, are under-going significant transformations. Today, the bulk of poverty is rural. HIV aids has taken a huge toll on many rural communities – on a recent visit to East Africa a farmer I met told me about the importance of young farmers associations yet noted that the problem now is the lack of young farmers : aids has taken a toll pushing the young and the old to positions of prominence in agriculture. Women have historically played a very central role in agriculture but rarely has it been recognized. Also somewhat unrecognized is the effect that social conflict and civil strife has on the rural and agricultural sector in many parts of the world. In Africa, for example, 22 of the poorest

40 countries are in or just emerging from conflict. It has been variously estimated that perhaps a quarter of Africa’s potential agricultural land is currently unusable as a result of conflict. Social organization at the community, local and national level will become critical to the future growth of the agriculture. Evidence of community driven development (CDD) suggests it holds considerable promise in effective rural management (World Bank) – this has led incidentally in the World Bank to a large increase in CDD work and we now are funding to the tune of around $2 billion in CDD projects and programs. Indeed, new and innovative institutional approaches will be critical. In agriculture we still seem to suffer from the “missing middle” caused by the dismantling of the state in intermediation services from supply of inputs to marketing and storage functions. There was pious hope that the private sector would fill the void although in many countries this has simply not happened. The scope for new approaches engaging civil society through farmers organizations and local NGOs in service delivery deserves more attention in many countries where the state has failed. The implicit cry from Johannesburg for new institutions is as relevant at the local level as it is at the global level. Towards an action agenda Having made the case for agriculture let me now provide some concluding remarks on what actions will be needed to place agriculture more firmly on the policy

agenda as well as actions that will increase productivity in an environmental and socially responsible manner. I would suggest seven broad actions, delivered to you in no particular order since, at the end of the day, it is the interaction of actions that will produce results:

(One) Reform agricultural trade and increase market access. Current subsidies by OECD countries now total around $311 billion (2001), greater than the regional GDP of sub-saharan Africa and one sixth of total ODA flows. In addition, many developing countries impose high trade barriers which reduce the potential for effective trade opportunities between developing countries. The potential economic benefits of global trade reform for the developing world are estimated at some $142 billion annually. The impact of lowering OECD trade) Ensure that domestic policies do not discriminate against agriculture. Sound agricultural and food policies, a supportive macro-economic framework, barriers has been estimated at a little more than 50 per cent of ODA given in 2001. It is essential that the Doha round be given high priority and focus to ensure that it is both a trade and development round. (Two) Encourage a sound domestic policy environment Domestic policies which discriminate against the rural and agricultural sector need to be addressed in many countries. An enabling policy environment for local trade

and market access need to be complemented with sound regulatory frameworks and vastly improved operation of land markets and land reform.

(Three) Develop sound and sustainable institutions. Access to financial services, marketing advice, and technical services have all fallen behind in many countries. New institutions are needed that are accountable, service oriented and owned by stakeholders. A greater role for both public private partnerships and for public NGO/civil society organizations should be explored. (Four) Link agriculture with broad based rural development Rural poverty can only be addressed in the context of broad based rural growth and by improving the social well being of rural dwellers, especially those most vulnerable and at risk. The provision of health and education services, combating HIV aids, and enhancing household food and income security in times of stress must complement agricultural policies. Rural infrastructure is also a key issue in many countries and especially in Africa. Lack of investment in rural roads has exacted a high toll : in many parts of Africa, farmers can hardly get their products to local markets and poor infrastructure results in a high price to be paid for inputs. In some parts of Africa farmers are paying five times the landed price of fertilizer, surely dampening household income.

(Five) Foster non-farm employment No country has succeeded in eradicating rural poverty through agriculture alone, other sectors of the rural economy. Support to productive non-farm investments is critical. (Six) Link agriculture with natural resource management. Agriculture depends fundamentally on natural resource s and has a central role in their conservation. Agricultural policies and practices for productivity gain must also be geared towards reducing land degradation, improving water management (“More crop per drop”), enhancing sustainable fisheries management, sustaining the production of forest products while protecting the environment, and incorporating climate change considerations into rural planning. (Seven) Invest in science and technology There is considerable evidence of high rates of return to agricultural R and D (IFPRI). Over the past thirty years massive shifts have occurred in the balance of public and private investment in R and D. For poor farmers the case for ensuring public domain access is paramount and hence the case for global public goods research is clear. Agricultural research will need to link productivity and environmental management objectives. It will need to be based on local concerns and information as well as international research. Increasingly social concerns must also be addressed. Given the increased private sector role in funding research modalities for appropriate public private relationships will need to be explored.

As noted earlier, in the short run there appears to be a case for increasing productivity in low income countries through the application of existing technologies. But as we look to the future – a doubling of food demand, new threats and vulnerabilities, new opportunities of linking agriculture with health care provision (such as in quality protein maize) – debate and discussion on the application of science and technology will be essential. A better understanding of the scope for traditional knowledge and expansion of conventional research; the potential benefits and costs of new technologies; the scope for improved systems approaches to natural resource management; and the potential that lies in functional genomic all need healthy and informed debate – the subject of our meeting today and tomorrow. Conclusion Being in Ireland reminds us all of the central importance of science and of public policy in agriculture. In the fall of 1845 a blight appeared in potatoes through Europe. In Ireland , unlike the rest of europe, the potato was a staple food. By 1850 over a million irish people had succumbed to famine and a further million or more had emigrated producing perhaps the first and certainly largest agrarian led diaspora. The combination of inadequate science and inept public policy has few parallels and its impact is felt to this day in Ireland. Policies that could have mitigated the potato blight were cast aside for unenlightened and crippling government policies, enacted from far away. By 1847 evictions of tenants had reached a staggering 100,000. The so called “quarter acre clause” of the Poor Law provided no relief for small holders with the result that homelessness and social dislocation became a major source of distress and death. Unenlightened

official policies towards food aid and relief resulted in gross misallocations and the construction of unproductive assets including the “hunger roads” in the west of Ireland. Official policies were countermanded to some extent by the early rise of church groups and NGOs (such as the Quakers) as well as by philanthropic contributions from around the world including those from other dispossessed peoples (such as the Choctaw and Cherokee nations in the US). Ireland ‘s history should not be forgotten as governments develop new agrarian policies and move towards more science-based agriculture to help the poor and marginal farmers of the world. Thank you.

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