UNCTAD calls for shift to sustainable agriculture

The United Nations Conference on Trade and Development (UNCTAD) released its Trade and Environment Review 2009/2010 on 8 February 2010. It called for a shift towards ‘clean’ growth, in response to the global financial crisis, as well as concerns about climate change and food prices.

The report said that the major crises the world is experiencing should be turned into opportunities for radical economic and policy changes. These changes have to come primarily in three areas: energy efficiency, sustainable agriculture and renewable energies for rural development.

On sustainable agriculture, UNCTAD recommends that governments encourage the use of various forms of sustainable agriculture, including organic farming, low external input sustainable agriculture, or integrated pest management that minimizes the use of agro-chemicals.

Sustainable agriculture is of “strategic importance” for growth and poverty reduction in many developing countries. It is also good for the environment and often fits the circumstances of smallholder farmers who make up the majority of food producers in the developing world. According to UNCTAD research, farms that engage in certified organic production in East Africa were significantly more profitable than comparable groups of farms engaged in conventional production.  Moreover, organic conversion in many African countries is associated with increases, rather than reductions, in yield. Sustainable agriculture also provides considerable scope for climate change mitigation and adaptation.

The adoption of coherent national and international policies to encourage the use of more sustainable production methods, including organic agriculture, could help save costs, develop new markets, improve revenues and enhance food security. The report recommends that publicly funded research and extension work should be shifted towards “sustainable ecosystem-based agriculture”.

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Third World Network

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Item 1

UNCTAD/PRESS/PR/2010/003^*

Original: English

Much «clean» growth possible in developing world with existing technology, right strategy and incentives, UNCTAD Report says

Huge gains can be made by focusing on energy efficiency, sustainable agriculture, and off-grid renewable power, study says; economic, food, and climate crises provide opportunity for change

Geneva, 8 February 2010 - The stress of the global financial crisis -- as well as concerns about climate change and food prices -- should be used by developing countries to shift towards "clean" growth, a new UNCTAD report recommends.  It says such progress is possible and affordable with existing technology, based on the right strategy and incentives.

UNCTAD's Trade and Environment Review 2009/2010^[1] (TER 09/10), released today, contends that while conventional wisdom holds that economic crises are times for belt-tightening and cost-cutting, the opposite is true in the current case.  The urgency of the crisis gives governments of the world's poorer nations the chance to re-direct resources to economic growth that is more economically efficient, better for the environment, more socially equitable, and more promising over the long term.

Because so little has been done in such nations, the TER notes, huge gains can be realized in improving energy efficiency, enhancing sustainable agricultural methods, and stimulating the use of rural, "off-grid" renewable energy.  If approached intelligently, such improvements should yield savings that pay for themselves or even generate quick profits.  In addition, shifting to "clean" growth should create jobs, the report says.  But to make this progress happen, governments must eliminate market barriers and policies that prevent the flow of capital into these promising sectors.

The study maintains that large improvements in energy efficiency can be achieved in many low-income and least developed countries "at negative net cost."  For example, efficient building technologies may be applied using local materials, in many cases reducing heating and related costs. According to studies by the European Commission, better energy efficiency can result in yearly savings of up to €1,000 for an average EU household. "Green" buildings are not much more expensive than normal construction in many developing counties, since they pay off in the form of reduced energy bills.  Materials for insulation and ventilation, for example, are often available locally.  The construction of energy-efficient buildings, the retrofitting of existing buildings, and the manufacture of energy-efficient building components are expected to grow worldwide by 6% annually.  Most new jobs in the sector will be created locally, often in small enterprises (the construction sector already accounts for 5-10% of all employment at national level).  Energy efficiency programmes are thus especially promising for underdeveloped regions and areas with high unemployment, the report says.

Payback periods for such energy-efficient investment in developing countries would generally be shorter than in developed countries, because there is more potential for replacing inefficient equipment, the study notes.

Similar opportunities exist in sustainable agriculture, opened up by alternative production methods, developments in technology, and changing consumer preferences, the report says.  It recommends that governments encourage the use of various forms of sustainable agriculture, including organic farming, low external input sustainable agriculture, or integrated pest management that minimizes the use of agro-chemicals.

Organic farming, for example, is good for the environment and often fits the circumstances of smallholder farmers who make up the majority of food producers in the developing world.  Such farmers in many cases can't afford fertilizer or pesticides and are used to functioning without them. Organic produce sells for higher prices, and recent Food and Agriculture Organization (FAO) research has shown that when organic farming is combined with reduced tillage techniques, farming can become almost climate-neutral.  According to UNCTAD research, farms that engage in certified organic production in East Africa were significantly more profitable than comparable groups of farms engaged in conventional production.  In contrast to the experience of developed countries, organic conversion in many African countries is associated with increases, rather than reductions, in yield. 

UNCTAD has made 35 specific recommendations on overcoming institutional, economic and political obstacles to organic farming.  Many are low-cost measures.  The report recommends that publicly funded research and extension work should be shifted towards "sustainable ecosystem-based agriculture."

Steps to provide "off-grid" renewable energy supplies, especially in rural areas, also hold great promise for the developing world.  The TER notes that such technologies as solar panels, windmills, biogas generators (using agricultural waste), and small hydro-power facilities can power homes and communities, increase agricultural production, improve health by reducing air pollution from indoor fires, and create jobs.

The TER notes that Grameen Shakti, a subprogramme of the Grameen microcredit bank in Bangladesh, has helped more than 2 million people in 40,000 rural villages gain access to renewable energy through solar home installations and biogas facilities.  And the Employment (EmPower) and Power Partnership Programme of Decentralized Energy Systems of India illustrates how self-sustained growth can be triggered through rural electrification that supports many village micro-enterprises and generates employment in agriculture, construction materials, handicrafts, maintenance, and repair services. 

Although the initial procurement and installation costs of renewable energy equipment are high (depending on how sophisticated the technology is), the running costs are very low, as there are no fuel costs. Furthermore, the decentralized nature of such energy supplies means that the high cost of building expanded electricity grids is avoided. For example, in the EmPower programme, power from local renewable energy sources is about 30% cheaper than grid-provided electricity. Such systems contribute to enhanced energy security and shield developing-country economies from both the escalating energy prices of conventional fuels and the notorious price volatility of fossil fuels.

Macro-economic costs are not the greatest barrier to taking advantage of the opportunities for clean growth, the TER says. Rather, it is the lack of appropriate policies, regulations, and institutional structures to support the shift towards clean growth. The key policy challenge is to leverage through better incentives for private investment and to initiate cumulative technological changes in "clean" growth, thereby supporting economic diversification and creating dynamic job and income opportunities.

Against this background, the TER 09/10 highlights the importance of far more pro-active government roles and the more pronounced use of industrial policies, reversing the trend of government passivity advocated under neoliberal growth policies. Such a shift to active industrial policies may require greater "policy space" than is available under current rules of the multilateral trading system, the report says.

Item 2

Development: Crisis could open doors for change, says UNCTAD

New York, 8 Feb (IPS/Thalif Deen) -- As the financial crisis continued to threaten world economies last year, the White House chief of staff Rahm Emanuel famously declared: "You never want a serious crisis to go to waste."

The UN Conference on Trade and Development (UNCTAD) subscribes to the Emanuel philosophy that crises always "offer a window of opportunity to embark on a path of more resilient and sustainable economic growth."

The Geneva-based UN agency implicitly argues that even in the most economically disastrous circumstances, one has to see the brighter side of things - however gloomy the outlook.

In its "Trade and Environment Review 2009-2010" released Monday, UNCTAD says the global economic and financial crisis and the inter-related climate, food, and water crises have imposed themselves as "defining parameters for policy-making today."

"Understanding the causes and consequences of these crises, and drawing lessons from them should spur dramatic economic and policy changes," it says.

These changes have to come primarily in three areas: energy efficiency, sustainable agriculture and renewable energies for rural development.

UNCTAD Secretary-General Dr. Supachai Panitchpakdi says that major crises such as the world is now experiencing can offer opportunities for rapid breakthroughs in new technologies, production and consumption patterns, and management practices.

He admits that promoting growth in these sectors will not automatically solve the current poverty and climate imperatives, but "it will, however, provide multiple social, economic and environmental dividends and constitute much-needed first steps towards low-carbon social and economic development."

"The key challenge is to avoid responding to the crises with measures to perpetuate economically, socially and environmentally unsustainable production and consumption patterns," he says.

In a foreword to the UNCTAD report, New Zealand's Minister of Trade Tim Groser warns that the trade-climate change linkage is a "ticking time-bomb".

"But I also believe there is another path open to us, and real opportunities to pursue win-win solutions across these agendas," Groser says.

The impact of the global economic crisis on the livelihoods of hundreds of millions of people, particularly in developing countries, adds further urgency and importance to the path taken.

Nowhere, he argues, is this more evident than in the agricultural sector. All countries, developed and developing alike, have a common interest in food security, removing impediments to trade and reducing global emissions of greenhouse gases.

Food production, he says, needs at least to double in the next 40 years, and at the same time global greenhouse gas emissions need to be reduced substantially.

"Land is a finite resource. Thus, we will need to achieve the best possible global production patterns for agriculture that will meet food, development and climate needs," says Groser.

In its report, UNCTAD stresses that gains in energy efficiency are the fastest and most economical way to increase access to energy, mitigate climate change, reduce national expenditures on imports of fossil fuel and control air pollution.

This will not only save costs but also enhance national competitiveness.

"While up-front costs may be significant, improvements in energy efficiency often pay for themselves through saved energy costs," the report notes.

Secondly, sustainable agriculture is of "strategic importance" for growth and poverty reduction in many developing countries.

The adoption of coherent national and international policies to encourage the use of more sustainable production methods, including organic agriculture, could help save costs, develop new markets, improve revenues and enhance food security.

Moreover, these will also provide considerable scope for climate change mitigation and adaptation.

Thirdly, renewable sources of energy, available in abundance in a number of developing countries, can be economically exploited with readily available technologies.

The provision of electricity and mechanical energy offers enormous potential for improving rural welfare and accelerating poverty reduction, while at the same time unlocking the productive potential of isolated rural communities. +