ROA Environmental Module Workhop FAO International Conference on The Roles of Agriculture in Developing Countries Workshop on Agriculture and Environmental Externalities 21 October 2003

ROA Environmental Module Workhop What are the objectives of the environmental module case studies? The aims of National level assessments: –to provide an overview of the major agricultural-related environmental issues; –to present a policy landscape describing what policy models and tools are being used; –to explain the pressures driving changes in agricultural practices that induce positive or negative externalities.

ROA Environmental Module Workhop What are the objectives of the environmental module case studies? The aims of the site specific study are: –to examine how markets, institutions and policies interact to produce ‘sub-optimal’ social outcomes –to quantify the value of the agricultural externalities, including measuring the non-market values; –the emphasis is placed on the economic and environmental impacts at the local, regional, national and global levels.

ROA Environmental Module Workhop What are the pressures driving changes in agricultural externalities? International development community pressures to integrate environmental objectives with agricultural objectives; Treaty pressures (MEAs), the ROA case study countries participate in various international bodies to harmonize criteria and codes of conduct for farming practices.

ROA Environmental Module Workhop What are the pressures driving changes in agricultural externalities? Trade pressures: i.the increased demand for safe and uncontaminated foods and ii.increased demand for sustainable production practices. Poverty pressures, as the poor: i.live in fragile areas; ii.lack the capital necessary to invest in natural resource protection; iii.tend to have high rates of time preference; iv.are unable even to avoid the impacts of environmental degradation on their existing production base.

ROA Environmental Module Workhop How are the countries managing agricultural externalities? i.integrating environmental concerns into policy decision making?; ii.modifying existing practices to reduce negative environmental consequences; iii.promoting local, national, regional and global initiatives; iv.examples of countries actively promoting positive externalities?

ROA Environmental Module Workhop Common characteristics across counties Common types of interventions include: –extension and advisory measures, conservation etc; –regulatory measures, eg, bans, standards, or labeling requirements. Economic instruments such as taxes, subsidies or tradable quotas are rare in the cases presented. (Chile and Mexico have enacted tradable water rights systems). The extension programmes include promotion of alternative agriculture production systems and integrated pest management

ROA Environmental Module Workhop Common characteristics across counties 1)most environmental programmes and policies aimed at the agriculture are recent; 2)technical difficulties associated with evaluating one particular policy when it forms part of a larger policy package; 3)a lack of data and/or evaluation culture and practice; 4)choosing appropriate alternatives with which to compare policy performance; 5)the non-point source/nonmarket nature of agricultural externalities; 6)incompatible division of responsibilities among government and donor agencies?

ROA Environmental Module Workhop What are we learning from the site studies? See matrix of examples One group measures positive externalities; A second group measures reduction in negative; A third group measures perceptions and basic economic assessments

ROA Environmental Module Workhop What are we learning from the site studies? Inadequate information on damages and thresholds; Incomplete set of values (under counting?) Benefits and Costs need valuing (over counting?) Assigning benefits Better understanding of linkages-macro, economy-wide and cross sectoral

ROA Environmental Module Workhop Future Research Agenda? Environmental Services a)Water, watersheds, water and health; b)Soil conservation; c)Carbon sequestration; d)Biological diversity management; e)Seed genetic stock maintenance; f)Agricultural heritage systems.

ROA Environmental Module Workhop Environmental Services and Poverty Alleviation Develop policies and strategies to promote positive environmental outcomes and poverty outcomes; Develop policies to enhance resource availability for environmental services provided by the poor; Develop a better understanding of the economics of environmental services.

ROA Environmental Module Workhop Empirical Studies What is available on existing studies and performance (ROA countries); Develop conceptual paper and summary of cases to use for analysis; Case studies: –The type of environmental service –Who pays, and what criteria

ROA Environmental Module Workhop Case studies –The type of environmental service What, how much, distribution, who benefits –How to maintain or enhance- Policy reforms Institutional reforms Market reforms Cash or in-kind payments – Monitoring/enforcement mechanisms

ROA Environmental Module Workhop LowHigh Productivity Potential High Low policy intervention Incentives for environmental benefits Low environmental research priority Environmental research Low Yield promoting policies and Payments for environmental services Yield promoting research Sustainability research Environmental Benefit

ROA Environmental Module Workhop Case Study Outcomes Benefit/cost analysis of various options; Develop targeting criteria to account for poverty outcomes and environmental outcomes; Analyze distributional effect within and between sectors; Target results to policy community.