Environmental Responsibility, Agricultural Diversity, and Agricultural Survival

1
Environmental Responsibility, Agricultural
Diversity, and Agricultural Survival

• Jason W. Clay
• Center for Conservation Innovation
• World Wildlife FundUS
• Third Annual Butler/Cunningham Conference
• Montgomery, Alabama
• November 8, 2004

2
Why are environmentalists interested in food and
fiber?

• Agriculture is the largest threat to biodiversity
  on the planetuses half of all habitable land
• It is the most polluting industry in most
  countries, 70 of water used by humans, and most
  chemicals.
• Most biodiversity is in areas of use
• Most biodiversity and biomass is in the soil
• Production is largely extractive90 of farmers
  have net soil loss. In US 6 bushels of soil to
  produce 1 bushel of grain 2 kilos of wild fish
  to make 1 kilo of salmon

3
The context for this interest

• Consolidation and integration of marketslonger
  market chains, but fewer players
• Declining prices to producersonly the efficient
  or the protected will survive
• Increasing use of producer contracts to reduce
  corporate risksresidues, product safety, and
  traceability
• Increasing consumer interest in product and
  product testingless in production processes
• Increasing numbers of certification programs
  (Organic, FSC, MSC, Eurepgap)
• Increasing role of retailers as watchdogs

4
The new license to operate

• In the past, was obey the law, now obey the law
  in consumer country or market
• Was do no harm or no net loss (driven both by
  government and buyers), now it is do good and
  beyond compliance
• Was scale or equity, now both scale and equity
• In a global economy, the issue is about price
• Comparative advantage and efficiency of
  production are driving producers around the world
• Reduce water use
• Reduce other input use (pesticides, fertilizer,
  energy)
• Build the soilits cheaper than buying inputs

5
Opportunities to reduce impacts through
partnerships with the private sector

• Identify the most serious impacts
• Habitat conversion, soil degradation, input use,
  effluents
• Be strategicsome crops have more impacts than
  others
• Be strategicsome buyers have more influence than
  others. Todays price is tomorrows premium
• Focus on howbetter, not best, management
  practices. Todays BMP is tomorrows norm
• Work with producers to reduce impacts and
  increase profits and make sure they are in
  business in 25-50 years
• Develop commodity specific BMP-based investment,
  buyer and insurer screens
• Identify the key commodities and impacts in AL to
  target

6
Zoning and Regulations to Minimize Impacts from
Agriculture

• Not all land is created equalor is equally good
  for production
• Siting can cause up to 90 of subsequent impacts
• Key siting issues are protection of riparian
  areas, slopes and watershed
• Siting and zoning issues are crop specific
• Better practices cannot correct impacts
• New crops often have little known impactsthe
  future will be about new crops in AL and
  elsewhere
• The only thing worse than the environmental
  impact of failed operations is the economic
  waste.

7
Marginal Lands

• Most environmental impacts result from farming
  the wrong land
• Our research shows that virtually any farmer
  anywhere in the world can abandon 5-15 of their
  land and increase total production
• This is true for many crops in many areas
• Abandoning marginal areas disproportionately
  reduces input use and increases producer net
  profits
• More importantly, it reduces environmental
  impacts by up to 50
• How would this kind of thinking change land use
  in AL

8
Degraded Lands

• Agriculture is expanding globally at 0.25 to
  0.5/year
• In the past, much land was degraded and abandoned
• With new production techniques much of this land
  can be brought back into production
• In Brazil, farmers are finding that they make
  more money growing soil than they do growing soy
  beans
• Through no-till, crop sequencing and crop
  rotation, they can increase organic matter from
  0.5 to 3 in 5-6 years
• They reduce water, pesticide, fertilizer use and
  soil erosion by 50 and pollutants in effluent by
  90
• Does AL have the potential to rehabilitate
  degraded land and if so, what would it be used
  for?

9
Subsidies and Market Barriers

• Subsidies are often the biggest barrier to the
  adoption of better practices
• Subsidies quite possibly result in more
  environmental impacts than any other single
  policyand the impacts reverberate throughout the
  world
• In the US, subsidies have increased the value of
  land (where subsidized crops can be grown) by
  25-50 making producers less competitive on
  global markets
• Direct crop production payments and export
  subsidies will be restricted under the WTO

10
Payments for Environmental Services

• Emphasis is likely to shift from direct subsidy
  payments to payments for environmental services
• Reduced erosion,
• Increased soil carbon/carbon sequestration,
• Water/watershed protection, etc.
• The biggest gains would probably be on more
  marginal lands not the best agricultural land,
  similar to CRP
• If this occurred AL might be in a position to
  take advantage of this situation

11
Better Management Practices (BMPs)

• Only a few activities cause 60-80 of the
  environmental impacts of most concern
• Identify BMPs that already address those concerns
• Most BMPs pay for themselves, often in 2-3 years
• Adapt BMPs to different scale/intensity
  production
• Develop low-cost BMPs
• There are no best management practices only
  better onesand better is far better than worse
• What crops and impacts are of most concern in AL?

12
Social BMPs

• Many BMPs address social and equity issues
• Shrimp producers with worker incentive programs
  can be 4 times more profitable than those that
  dont
• Brazilians are exploring a wide range of programs
  that increase profits and improve worker welfare
• Education programs can reduce worker turnover by
  80 and pay for themselves within a year
• Unilevers soy sourcing program increases the
  price paid to producers by 15 and reduces
  Unilevers costs
• To date, these programs have been about
  production costs and efficiency, but there is
  marketing potential too
• What can AL do along these lines?

13
Certification and Ecolabels

• Rapid increase in the number of certification
  programs, but only organic is sustained without
  subsidies
• Few programs can back up what they claim or imply
• Very few programs have measurable standards or
  can measure progress against a baseline
• No programs test for product quality or residues
• Wisconsin potatoes are a useful contrast
• Comparison of cotton production impacts (organic,
  IPM, GM, conventional, hybrids) to see which use
  the most toxic chemicals and which impact soil
  and water
• Ecolabels should be evaluated by their ability to
  measure a reduction in key impacts for each
  product certified
• Is AL taking advantage of certification programs?

14
Entrepreneurs

• Food production is largely an inherited
  occupation.
• Most farmers are born into itvery few choose it
• This is not a likely scenario for innovation and
  cross fertilization of ideas from other sectors
• One university trains entrepreneursEARTH in
  Costa Rica
• Within 3 years, each graduate has created 10 jobs
• What rural areas need are graduates that make
  jobs, not take them
• What could AL do to create more entrepreneurs?

15
What does all this mean for Alabama?

• Fewer farmers but more people living in rural
  areas
• Most of those moving to and living in rural areas
  are poor
• Shifts of ag subsidies to payments for
  environmental services could benefit AL
• AL farmers are marginal, they cannot compete in
  most commodities and need to focus on specialty
  items
• Should also focus on local markets, quality of
  food, longer growing seasons, etc.
• In the past, a farmer producer 2-3 main cash
  crops in their lifetime. Now they will be
  producing 10-12. Its a different ballgame.
• Are AL farmers being prepared for this?

16
Closing thoughts

• Producing food and fiber in the future will be
  about managing change, not protecting the past
• It will be about how to think, not what to think
• It will be about learning, but learning much
  fastertoday it takes 8 years to disseminate
  BMPs, by that point many are obsolete
• There are no entitlements to farm, however, and
  there will be fewer farmers each year
• However, more people will be living in rural
  areas each year, and they can farm new outputs
  (e.g. services)