Best Practice Report


Policy design and implementation / Sustainable agriculture and poverty reduction

7. Sustainable agriculture and poverty reduction

Agricultural policies that are proving successful in contributing to multiple green growth goals include credit enhancement, education, and outreach and capacity building, R&D, integration of poverty reduction and agricultural policies, and strengthened property rights, targeting improved nutrient and water management, agroforestry, aquaculture, and integrated livestock and crop management for both big and small farmers.

Increased agricultural productivity is critical for food security and poverty reduction, but policy portfolios for green growth in agriculture must simultaneously tackle environmental degradation, climate change resilience, adaptation, and mitigation. Realization of green growth objectives in agriculture – especially in developing countries – is intrinsically linked to boosting agricultural productivity, i.e. increasing agricultural yields by a factor larger than the associated increase in inputs, such as land, labor, fertilizers and water. With a projected global population of around 9.2 billion by 2050 and with 2.5 billion people currently depending on agriculture to sustain their livelihoods, the challenges for food security and poverty reduction are clear. The role of growth and increased productivity in agriculture for reducing poverty and ensuring food security is confirmed in the literature (Cervantes-Godoy and Dewbre, 2010; and Timmer, 2005). More specifically, growth originating in agriculture is estimated to be between 2.5 and 4 times as effective in reducing poverty in developing countries than growth in other sectors (Stevens, 2012; and UNEP, 2011).

Furthermore, green agricultural growth implies that resource efficiency and productivity gains go hand-in-hand with ensuring the long-term provisioning capacity, or sustainability, of agro-ecosystems (FAO, 2012; UNEP, 2013; and Negra, 2013). This implies addressing environmental externalities as well as climate change resilience and adaptation issues (Garnett et al., 2013; IPCC, 2007; and Neufeldt et al., 2013). Policies and practices in the agricultural sector will also have tremendous implications for global greenhouse gas emissions and their mitigation. Currently, agriculture contributes directly to 10-12% of global greenhouse gas emissions (Tubiello et al., 2013). If indirect emissions from agriculture-related deforestation and forest degradation and from agricultural pre- and post-production emissions are also taken into account, 19 to 29% of global greenhouse gas emissions are attributable to the global food system (UNEP, 2013). The good news is that in many cases there are synergies between policies and practices that contribute to increased productivity, poverty reduction, and environmental and climate-related goals (FAO, 2011; UNEP, 2013).

This section draws on lessons from the design and implementation of a number of such promising agricultural practices and policy portfolios that can realize multiple green growth goals at different scales and in different country contexts. It focuses specifically on developing and emerging economies and acknowledges that findings are highly context- and location- specific.

Agricultural policies that are proving successful in contributing to multiple green growth goals include those targeting small farm holders, improved nutrient and water management, agroforestry, aquaculture, and integrated livestock and crop management. A number of green growth oriented agricultural policies and practices have been designed and implemented, prominently under the headings of sustainable land management and climate-smart agriculture. In many cases, they are proving effective in jointly addressing a suite of green growth goals including increased productivity; food security; poverty reduction; climate change resilience, adaptation and mitigation; and reduced environmental degradation. Focusing on smallholders, who manage more than 80% of the world’s estimated 500 million farms and provide over 80% of the food consumed in large parts of the developing world (IFAD and UNEP, 2013), UNEP (2011) finds that adoption of greener farming practices by smallholders is associated with increased yields of between 54 and 179%. Pretty et al. (2006) estimated an average crop yield increase of 79% associated with the adoption of sustainable farming practices and technologies, based on an analysis of more than 286 agricultural projects in 57 developing countries.

Prominent practices and related policies include improved nutrient and water management in rice systems, agroforestry, aquaculture, water harvesting in dryland areas, and livestock integration into farming systems. In addition to increasing yields, profitability and income, these practices are often associated with environmental benefits such as reduced soil vulnerability decreased agricultural runoff, enhanced soil productivity, and climate change resilience and mitigation benefits (UNEP, 2013). No-till practices, where seeds are sowed directly under the mulch layer from the previous crop, have also shown effective in generating such multiple green growth benefits and have been an important element of agricultural improvements in Argentina, Brazil, Paraguay, Uruguay, Australia, and USA (see Case 11 on Brazil). It should be noted, however, that no-till cultivation is more appropriate for large than small farm sizes due to high investment costs for machinery, and that no-till has been associated with overuse of glyphosate herbicides and reliance on genetically modified crops to combat weeds.

Several governments are having success with portfolios of policies to achieve inclusive green growth in agriculture that mix credit enhancement, education and outreach and capacity building, R&D, integration of poverty reduction and agricultural policies, and strengthened property rights. Establishment and enforcement of well-defined property rights may be the single most important precursor for adoption of sustainable agricultural management practices, and has often been found to be a necessary prerequisite for market-based incentive policies to be effective (UNEP, 2012). In addition to well-defined and enforced property rights, OECD (2011) highlights inclusion of the following types of policies in comprehensive and coherent policy portfolios for green growth in agriculture: pricing policies and subsidy reforms, land-use regulation; and R&D and skills development to increase resource use efficiency throughout supply chains (OECD, 2011; Negra, 2013; and Stevens, 2012).

To date, most experience with design and implementation of green growth policies in agriculture is limited to initiatives to promote specific sustainable practices and policy goals, as opposed to policy portfolios designed and implemented in response to comprehensive national green growth strategies for agriculture. Nonetheless, the recommendations on policy portfolio elements outlined above are supported by lessons from actual implementation of policy portfolios, including the experiences from Brazil and Thailand (see Case 11 and 12).

The role of government in providing access to credit and creating financial incentives for farmers, for example through direct subsidies and tax offsets, seems particularly critical not least to tackle up-front investment costs and time-lags between private investments and pay-offs that pose significant challenges to adoption of sustainable agricultural management practices. In Kenya, for example, tax incentives for growing trees have been introduced alongside reforms to restrictions on harvesting and marketing of tree products, the creation of contract farming schemes to enhance trading of tree products between landholders and companies, training of extension service staff, establishing tree nurseries countrywide, prohibition of harvesting of trees from public forests, and awareness raising (UNEP, 2013). UNEP highlights that this mix of policies has resulted in a 215,000 hectare expansion of agroforestry over the last 30 years in western and central Kenya.

Evidence also points to the pivotal role of skills and innovation and R&D policies for sustainable agriculture and poverty reduction, as illustrated in the Thailand case and notably the Brazil case. Capacity building and R&D has played a central role in improving nutrient and water management in rice systems in a wide range of countries including Bangladesh, China, Vietnam, the Philippines, Nigeria, Rwanda, and Senegal (UNEP, 2013).

Case 11: Agriculture Policy in Brazil

Brazil has achieved a reduction in poverty rates, from 20% of the population in 2004 to 7% in 2010, supported by a set of complementary policies and programs to improve the productivity, and reduce the environmental impacts of agriculture (Beddington et al., 2012). Key policy elements include: (i) a focus on agricultural R&D and diffusion of knowledge at local levels with the pivotal role of the agricultural research agency, EMBRAPA, and the allocation of the necessary resources more than in any comparable country in the world, (ii) provision of complementary measures such as agricultural credit and the environment guidelines of the Brazilian Development Bank BNDES; (iii) dovetailing agricultural production patterns to the national program on Zero Hunger ensuring consistency of poverty and agricultural policies; (iv) farm-level capacity building policies and mechanisms ensuring stakeholder participation; and (v) supporting trade policies.

Case 12: Agriculture Policy in Thailand

In Thailand, government intervention including agricultural credit and extension services seek to expand land under cultivation, promote sustainable practices, and upgrade agro-processing and exports (OECD, 2012c). The sector has developed through mechanization and technology adoption, raising farm productivity and size. Key lessons from Thailand’s experience include the value of integrated area development approaches that recognized rural-urban dependencies and enabled moving labor to move from the agriculture sector to agro-processing and industrial sectors This resulted in greater wages in the farm sector and greater mechanization and technical innovations for raising farm productivity and emergence of commercially viable farms.