CHILE – Evaluating And Improving The Ministry Of Agriculture’s Environmental Agenda (MAEA) Integrated Assessment and Planning for Sustainable Development Integrated Assessment and Planning for Sustainable Development Second Review Meeting Geneva, September 21-22, 2005 Victoria Alonso - Edmundo Claro RIDES

Background (1) What was the original focus of the assessment? 1. Assessment. To assess the sustainability impacts of the MAEA and to suggest necessary adjustments to it so that it promotes better environmental performance, reinforces sustainable trade in the agriculture sector and helps at reducing poverty. 2. Participation. To make relevant actors’ participation an important factor in the assessment, so that the MAEA is coherent in relation to the strategic goals of the Ministry of Agriculture, the National Commission on Environment, the Trade Liberalization strategy of the Ministry of Foreign Affairs, and the Clean Production strategy of the Ministry of Economics. 3. Capacity building. Enhancing capacity to undertake integrated assessment and planning for sustainable development and therefore facilitating the design of policies, plans and programs that take into account economic, social and environmental aspects of development. Why was it selected? 1. Political pluralism: to promote the adoption of a plural perspective in policy matters. 2. Substantive pluralism: to ensure environmental and social aspects were considered on a par with economic ones in the design of the MAEA. 3. Procedural pluralism: to make certain that participation of different public bodies, civil society and the private sector in the design of the MAEA. 4. Methodological pluralism: to expand the repertoire of analytical and participatory techniques used in the design of policies.

Background (2) What were the original key objectives of the project? a) To contribute to the planning process of the MAEA so that it can be a factor towards sustainable development. More specifically, to promote an environmentally progressive MAEA which reinforces sustainable trade in the agriculture sector and helps in reducing poverty. b) Improving policy coherence of the MAEA in relation to the strategic goals of the Ministry of Agriculture, the objectives of the National Commission on Environment, the Trade Liberalization strategy of the Ministry of Foreign Affairs, and the Clean Production strategy of the Ministry of Economics. c) To evaluate the sustainability impacts of the MAEA and to suggest necessary adjustments to it. d) To disseminate the experience of this assessment in other policy planning processes within the country, as well as in the region and internationally.

Background (3) What are the new focus and objectives (if there have been any changes) and why? After the preliminary assessment of the MAEA, two of the objectives became more specific: a) Assessment: focus on three selected productive sectors (forestry, pork meat and wheat), construct future scenarios for the MAEA under these sectors, and assess their sustainability impacts, and then derive recommendation of specific policies. b) Participation: to define who should participate, including authorities, the private sector and civil society

Background (4) What are the key policy scenarios, why? The MAEA is a general document with important elements for improvement but, Does not include specific tools to constitute a policy document Key policy scenarios are: a) Without Environmental Agenda b) With a medium Environmental Agenda and c) With a full Environmental Agenda

Background (5) What are the productive sectors to be assessed under each scenario, why? Since the Agricultural Policy of Chile is organized in sub-sectors of agriculture, the project analyzed the main economic, social and environmental issues in some of these sub-sectors: forestry, pork meat and wheat These sectors were selected because they represent the following criteria: economic relevance, impact on poverty, environmental impact and trade relevance.

Background (6) What are the key methods for assessing economic, social, and environmental impacts in this project? Scenario approach under the following structure: –Description of the sector –Barriers to the sustainability of the sector (economic, social and environmental) –Policies attributable to the Environmental Agenda of the Ministry of Agriculture: incentives, regulations, voluntary programs, and research and development –Scenario building for the year 2010 based on policies identified on 3): a) Without Environmental Agenda b) With a medium Environmental Agenda and c) With a full Environmental Agenda –Scenario assessment in terms of its contribution towards sustainable development: trade, poverty and environmental impacts. –Policy recommendations.

Background (7) What have been the processes of implementing this project? –Constitution of a Steering Committee –Background paper –Specific interviews –National Workshop –Selection of methodology and specific agriculture sectors –Sector description –Validation with ODEPA –Constitution of a Working Group for each sector –First Group discussion –Scenario Construction –Second Group Discussion –Definite sector documents

Assessment framework Selected sector: pork meat Scenario 1: without MAEA Scenario 2: medium MAEA Scenario 3: full MAEA Economic indicators: State investment Exports level Social indicators: Employment Rural poverty Environment indicators: Water quality Odour emissions

Scenario construction Policy or instrumentScenario 1Scenario 2Scenario 3 Economic instruments: financial instruments to promote application to CDM by SMEs Information systems: underground water baseline Voluntary mechanism: third clean production agreement Land use planning: to reduce conflict for land use between urban development and agriculture

Initial effects How does each scenario affect the price of the related product or incentive of using a related natural resource? Scenario 2 will affect incentives to produce pork meat but not very significantly. Land use planning will certainly put some obstacles to the siting of new nurseries. However, due to the scale of incoming new projects, these new costs are expected to be very low in comparison to normal investment costs. The clean production agreement will rise production costs due to more stringent guano application regulations: there will be limits to the amout of guano to be applied and there will periods under which guano can be applied to agricultural land. However, this instrument is voluntary, so that all participating producers will have analysed their participation in economic terms before joining the agreement. Scenario 3 should not affect incentives to produce pork meat further to what happened with Scenario 2. This is mainly because the two extra measures in Scenario 3 (financial instruments to promote application to CDM by SMEs and an underground water quality information system) should mostly imply costs to the state and not necessarily to the private sector.

Initial effects (continued) How will the changes in price or incentive in turn affect production or use of the natural resource It is expected that the measures contained in scenarios 2 and 3 will not affect the growing tendency in the production of pork meat. In effect, it might actually provide with new international market opportunities for clean or environmentally friendly pork meat products.

Economic/trade effects For the ONE selected sector: How will the changes in production or use of resource affect economic and trade performance under each scenario? Econ/trade indicators Scenario 1Scenario 2Scenario 3 1. State investment (cost) Export level0++

Environmental effects For the one selected sector: How will the changes in production or use of resource affect the environment under each scenario? Environment indicators Scenario 1Scenario 2Scenario 3 1. Water quality Odour emissions 0++

Social effects (1) For the ONE selected sector: How will changes in production or use of resource affect social well-being and poverty in each scenario? Use no more than 3 indicators. Social indicatorsScenario 1Scenario 2Scenario 3 1. Employment Reduction of rural poverty 0++

Social effects (2) Who are the winners and losers from the changes in production and use of resources? –In general, MAEA is a good thing for the future of environmental sustainability of Chilean agriculture –Facilitate construction of agreements within the public sector –Increases competitiveness of the Chilean pork meat sector, especially of big producers –Bring health benefits for workers, consumers and local communities But: –Might put more pressure on small and medium farmers by forcing them to comply with new environmental requirements

Secondary effects (1) Please describe any further, long-term social & economic/trade implications of the projected environmental changes? Social implications: a) due to better water quality, health improvements; b) due to less odour emissions, less conflicts between local communities and nearby pork nurseries. Economic implications: a) due to better environmental performance of the pork meat sector, more competitiveness in international markets; b) due to stringent environmental requirements, expansion of the environmental industry in Chile.

Secondary effects (2) Please describe any further, long-term environmental & economic/trade implications from the projected changes in social well-being? Winners: a) big pork meat producers will be more able to switch to cleaner production technologies and benefit from more resource efficient production; b) lower poverty levels for rural workers might bring higher pressure on natural resources: water, energy, land, etc.; c) health benefits for workers, consumers and local communities might imply higher labour productivity; d) b) and c) together might push the creation of new small entrepeneurs. Loosers: small and medium farmers not able to comply with MAEA requirements might switch to even lower environmental standards in order to compete in the national pork meat market.

Recommendations (1) For ex ante or concurrent assessment, how should the policy/plan be re-formulated or revised? –A third Clean Production Agreement that World not only promote the measurement of nitrogen emissions but would include concrete measures to minimize those emissions. –A national plan for Land Use that would reinforce and broaden the environmental and sustainability considerations for land use planning, especially when addressing rural territories. –An underground water baseline that would inform on the pollution levels in the major agriculture basins. –Financial instruments to promote the making of collective studies to apply for the Clean Development Mechanism (CDM) for small and medium size producers

Recommendations (2) How to improve the process of policy/plan-making? Consider: –Complement with all relevant sectors –Reach decision makers –Reach political consensus –Further engagement of the private sector –Cost evaluation –Election year

Enabling conditions What needs to happen in order to implement the recommendations? To continue with the capacity building process related to the IAP project with key decision makers. To proceed with other relevant sectors in the Chilean agriculture To gather the required financial and human resources for the MAEA implementation To get the private sector’s commitment to support the future MAEA

Lessons learned so far... Integrated assessment: has provided elements for policy improvement in at least 3 ways: –Has allowed for consideration of different elements of the Chilean agriculture’s reality –Has integrated a broad range of relevant actors –Has expanded the repertoire of analytical and participatory techniques To address the agenda from a productive sector’s perspective instead of enviromental aspects To widen the participatory y process has proved successful in many ways: –Has allowed different relevant actors to seat at the same table –Has promoted dialogue between actors from different relevant institutions in the public sector –Has produced an agreed upon document