The São Francisco River Basin:Trends, Current Situation, and Policy Options for Reducing Rural Poverty

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The São Francisco River Basin:Trends, Current Situation, and Policy Options for Reducing Rural Poverty

  1. 1. The São Francisco River Basin: Trends, Current Situation, and Policy Options for Reducing Rural Poverty O ti f R d i R lP t Steve Vosti & SFRB Team February 2008 UCD/Embrapa
  2. 2. Presentation Overview • Trends and Driving Forces – Population, Poverty, Agriculture, Market Structure • P bl Problems – Persistent poverty – ‘Local’ water conflicts – Environmental flows – Deviations from ‘average’ • Role for Public Policy Action – Managing agriculture – Reducing persistent poverty – ‘What If’ Scenarios • Water pricing p g • Water use restrictions • Data Sources, Hydro-Economic Models, Value Added to CP • Knowledge Pathways and Impact Pathways UCD/Embrapa
  3. 3. Policy Instruments that Can Affect Productivity and Profitability • Assets and Asset Quality – Land, water, financial capital, market access, knowledge • Relative Prices –I Inputs t • water – Products UCD/Embrapa
  4. 4. Three Worlds of the WDR 2008 Source: World Development Report 2008 UCD/Embrapa
  5. 5. Changing Market Structure UCD/Embrapa
  6. 6. Soil Types and Distance to Market UCD/Embrapa
  7. 7. Population Total Population 1991 2000 Change % change Change in the 1991-2000 Total for SFRB 14,059,006 15,723,771 1,664,765 11.84% SFRB Alagoas 668,980 705,851 36,871 5.51% Bahía 2,712,391 2,897,898 185,507 6.84% Distrito Federal 1,601,094 2,051,146 450,052 28.11% Goiás 147,656 173,079 25,423 17.22% Minas Gerais 6,971,994 7,885,366 913,372 13.10% Pernambuco 1,568,446 1,591,141 22,695 1.45% Sergipe 229,819 260,180 30,361 13.21% Rural 1991 2000 Change % change Population 1991-2000 Total for SFRB 4,445,920 3,691,016 -754,904 -16.98% Alagoas g 409,421 , 400,418 , -9,003 , -2.20% Bahía 1,579,751 1,442,275 -137,476 -8.70% Distrito Federal 85,205 89,647 4,442 5.21% Goiás 50,576 37,650 -12.926 -25.56% Minas Gerais 1,256,533 809,764 -446,769 -35.56% Pernambuco 842,515 700,970 -141,545 -16.80% Sergipe 124,703 131,202 6,499 5.21% UCD/Embrapa
  8. 8. Aging of the Rural SFRB Population Shifting Demographic Profile 12.00 12 00 10.00 ipios Proporti of Munici 8.00 6.00 ion 4.00 2.00 0.00 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% 27% 28% 29% 30% 31% 32% 33% 34% 35% 55+ Dependency Ratio -- 1991 55+ Dependency Ratio -- 2000 UCD/Embrapa
  9. 9. Agriculture in the SFRB -- 1991 UCD/Embrapa
  10. 10. Agriculture in the SFRB -- 2004 São Francisco River Basin Harvested Specialty Harvested Grains Crops, 2004 2004 Petrolina Harvested Area (ha) Harvested Area (ha) at Município Level at Município Level None None 1 - 2,000 1 - 2,500 Montes Claros 2,001 - 5,000 2,501 - 10,000 5,001 - 10,000 10,001 - 50,000 10,001 - 20,000 50,001 - 200,000 20,001 - 431,441 200,001 - 401,980 Sete Lagoas Scale 1:9,000,000 Ribeirao das Neves 0 50 100 200 300 Belo Horizonte Betim Kilometers Divinopolis Lambert Azimuthal Equal Area Projection, WGS-84. Map by J A Young, 12 September 2007 UCD/Embrapa
  11. 11. Frequency Distribution of Corn Production (in tons/ha) 60 Changes in Yields g 40 ount Co 20 0 1 2 3 4 Unweighted Yields in 1991 Frequency Distribution of Corn Production (in tons/ha) 60 Count 40 20 0 0 2 4 6 Unweighted Yields in 2004 UCD/Embrapa
  12. 12. Water Availability UCD/Embrapa
  13. 13. Water Productivity in Corn y UCD/Embrapa
  14. 14. Water Productivity UCD/Embrapa
  15. 15. Water Conflicts in the SFRB Source: ANA 2007 UCD/Embrapa
  16. 16. Poverty in the SFRB UCD/Embrapa
  17. 17. Extreme Poverty in the SFRB 2003 Rural Extreme Poverty- Poverty Poverty Rural Poverty Rural % of % of Rural Rural Absolute Pop Absolute Pop Total for SFRB 1,012,095 28% 345,677 9% Alagoas 163,307 41% 70,400 2.6% Bahía 328,313 23% 139,941 9.7% Goiás 7,792 7 792 21% 2,846 2 846 7.5% 7 5% Minas Gerais 178,006 22% 43,214 5.3% Pernambuco 258,004 37% 53,484 7.6% Sergipe 48,635 37% 19,603 14.9% UCD/Embrapa
  18. 18. Spatial Distribution of Rural Poverty UCD/Embrapa
  19. 19. Spatial Clusters of Rural Poverty in the SFRB Cluster 1 Cluster 3 Cluster 2 Not Significant Low - Low High-High High-Low Low-High UCD/Embrapa
  20. 20. Water-Poverty Links: A Visual Inspection UCD/Embrapa
  21. 21. Possible Water-Poverty Links y UCD/Embrapa
  22. 22. Next Steps for Small-Scale Farmers? • Scale Economies Loom Large • Shifting Product Mix Will Likely Be Required • Such Shifts Will Require Private Investments • Capital, knowledge, market development UCD/Embrapa
  23. 23. Some Types of Variability Matter Greatly Yield Variation Price Variation UCD/Embrapa
  24. 24. Effects of Alternative Policy Options – A Quick Look Using LUS Analysis Q g y UCD/Embrapa
  25. 25. A Basin-Wide View of the Effects of Agricultural E pansion Agric lt ral Expansion Petrolina Barreiras Paracatu Rio Paranaiba UCD/Embrapa
  26. 26. A Basin-Wide View of the Effects of Agricultural Expansion, cont. g p , Value of Total Output Total Increase in Employment (2006 R$) (person-months/year) Barreiras R$ 36,523,637 2,347 Petrolina R$ 192,853,884 14,302 Paracatu R$ 41,988,915 $ 7,401 Rio Paranaiba R$ 3,675,946 192 Barreiras Petrolina P li Paracatu Rio Paranaiba UCD/Embrapa
  27. 27. A Basin-Wide View of the Effects of Baseline Agricultural Expansion, cont. g p , 8000 . 6000 Discharg (m3 s-1) 4000 2000 ge 0 1 2 3 4 5 6 7 8 9 10 11 12 Month Baseline B li 8000 . 6000 Discharge (m3 s-1) 4000 2000 0 1 2 3 4 5 6 7 8 9 10 11 12 Month UCD/Embrapa
  28. 28. What Happens If Policymakers Say ‘No’ to Increased Irrigation 10% Reduction 20% Reduction P e rc e n t C h a n g e in Ir rig a te d L a n d fro m a 1 0 % R e d u c tio n in P e r c e n t C h a n g e in Irrig a te d L a n d fro m a 2 0 % R e d u c tio n in W a te r A v a ila b ility W a te r A v a ila b ility 0 0 1 1 -1 -2 -2 B o n fin o p o lis d e M in a s B o n fin o p o lis d e M in a s U nai -4 Unai -3 C a b e c e ira s C a b e c e ira s -6 6 -4 C ris ta lin a C ris ta lin a F o rm o s a F o rm o s a -8 -5 B ra s ilia B ra s ilia -6 -1 0 -7 -1 2 30% Reduction 40% Reduction P e rc e n t C h a n g e in Irrig a te d L a n d fr o m a 3 0 % R e d u c tio n in P e rc e n t C h a n g e in Ir rig a te d L a n d fro m a 4 0 % R e d u c tio n in W a te r A v a ila b ility W a te r A v a ila b ility 0 0 1 1 -2 -2 -4 -4 B o n fin o p o lis d e M in a s B o n fin o p o lis d e M in a s Unai -6 -6 U nai C a b e c e ira s -8 C a b e c e ira s -8 C ris ta lin a -1 0 C ris ta lin a -1 0 F o rm o s a F o rm o s a -1 2 1 -1 2 B ra s ilia B ra s ilia -1 4 -1 4 -1 6 -1 6 -1 8 UCD/Embrapa
  29. 29. Changes in Crop Allocation Associated with a 10% Reduction in Water Availability (%) C r i s t a li n a B o n f i n o p o li s d e M i n a s c it r u s c it r u s c o ffe e c o ffe e 3 c o rn c o rn c o tto n 2 c o tto n 1 .5 d r ie d b e a n s d r ie d b e a n s 1 1 g r a in s g r a in s 0 0 .5 h o r t ic u lt u r e h o r t ic u lt u r e 1 m ani c io -1 m ani c io 0 o r c h a r d f r u it s -2 o r c h a r d f r u it s -0 .5 1 o th e r te m p o ra ry o th e r te m p o ra ry -3 -1 o th e r p e rm a n e n t o th e r p e rm a n e n t -1 .5 r ic e -4 r ic e -2 soybeans -5 soybeans sugar sugar -2 .5 -6 v e g e t a b le s l v e g e t a b le s l Unai F o rm o s a c it r u s c it r u s c o ffe e c o ffe e 3 10 c o rn c o rn 2 c o tto n c o tto n 0 d r ie d b e a n s 1 d r ie d b e a n s 1 g r a in s -1 0 g r a in s 0 h o r t ic u lt u r e h o r t ic u lt u r e 1 -2 0 m a n io c m a n io c -1 o r c h a r d f r u it s o r c h a r d f r u it s -3 0 -2 o th e r te m p o ra ry o th e r te m p o ra ry o th e r p e rm a n e n t -4 0 o th e r p e rm a n e n t -3 r ic e r ic e -4 soybeans -5 0 soybeans -5 sugar sugar -6 0 v e g e t a b le s v e g e t a b le s UCD/Embrapa C
  30. 30. Changes in Water Use Associated with a 10% R d ti i W t A il bilit (10%) Reduction in Water Availability B o n fin o p o lis d e M in a s C r is ta lin a c it r u s c it r u s c o ffe e c o ffe e 0 0 c o rn c o rn 1 1 -2 c o tto n -5 c o tto n d r ie d b e a n s d r ie d b e a n s -1 0 -4 g r a in s g r a in s h o r t ic u lt u r e c t -1 5 h o r t ic u lt u r e c t -6 m a n io c m a n io c -2 0 -8 o r c h a r d f r u it s o r c h a r d f r u it s o th e r te m p o ra ry -2 5 o th e r te m p o ra ry -1 0 o th e r p e rm a n e n t o th e r p e rm a n e n t -3 0 r ic e r ic e -1 2 -3 5 soybeans soybeans -1 4 sugar -4 0 sugar v e g e t a b le s v e g e t a b le s U nai F o rm o s a c it r u s c it r u s c o ffe e c o ffe e 0 3 c o rn c o rn 1 -5 c o tto n c o tto n 2 d r ie d b e a n s d r ie d b e a n s -1 0 g r a in s g r a in s 1 -1 5 h o r t ic u lt u r e h o r t ic u lt u r e m a n io c m a n io c -2 0 0 o r c h a r d f r u it s o r c h a r d f r u it s 1 -2 5 o th e r te m p o ra ry o th e r te m p o ra ry -1 o th e r p e rm a n e n t o th e r p e rm a n e n t -3 0 r ic e r ic e -2 -3 5 soybeans soybeans -4 0 sugar sugar -3 v e g e t a b le s v e g e t a b le s UCD/Embrapa
  31. 31. What Happens If Policymakers Charge for Water? (20% Increase in Water Prices) Bonfinopolis de Minas p Brasilia citrus it citrus it coffee coffee 0.8 1 corn corn 0.6 cotton cotton 0.5 0.4 dried beans dried beans 0.2 grains 0 grains horticulture 1 horticulture 0 -0.5 -0.2 02 -0.4 R1 manioc orchard fruits -1 manioc orchard fruits Crop Allocation other temporary other temporary -0.6 other permanent -1.5 other permanent -0.8 rice rice -2 -1 soybeans soybeans -1.2 sugar -2.5 sugar vegetables vegetables Bonfinopolis de Minas Brasilia citrus citrus coffee coffee 0 0 corn corn -1 cotton -2 cotton dried beans dried beans -2 -4 grains grains -3 -4 4 horticulture manioc -6 -8 8 horticulture manioc Water Use orchard fruits orchard fruits -5 other temporary -10 other temporary other permanent other permanent -6 -12 rice rice -7 soybeans -14 soybeans -8 sugar -16 sugar vegetables vegetables Bonfinopolis de Minas Brasilia citrus citrus coffee coffee 0.5 2 corn corn cotton cotton 0 0 dried beans dried beans grains -2 grains -0.5 horticulture horticulture -4 -1 manioc orchard fruits other temporary -6 manioc orchard fruits Employment Emplo ment other temporary -1.5 other permanent -8 other permanent rice rice -2 soybeans -10 soybeans -2.5 sugar sugar -12 vegetables vegetables UCD/Embrapa
  32. 32. What If It Doesn’t Rain? f1= large, div+ f2= large, div- (40% Reduction in Rainfall) f3= medium, div , f4= small, div % Changes in Land Allocation pasture corn dried beans soybeans limes vegetables orchards wheat sorghum 80 60 40 20 f1 0 f2 -20 f3 -40 -60 f4 -80 -100 -120 corn dried beans limes vegetables orchards wheat 0 -5 % Changes in -10 f1 -15 Total Water Use f2 -20 f3 -25 f4 -30 30 -35 -40 UCD/Embrapa
  33. 33. What If It Doesn’t Rain? f1= large, div+ f2= large, div- (40% Reduction in Rainfall) f3= medium, div , f4= small, div Changes in Applied Water, by Source f1 f2 f3 f4 60000 40000 20000 0 -20000 sw -40000 40000 gw -60000 -80000 -100000 -120000 -140000 f1 f2 f3 f4 0 -10 10 -20 -30 -40 % Changes in -50 50 Farm Profits -60 -70 UCD/Embrapa
  34. 34. What If It Doesn’t Rain? f1= large, div+ f2= large, div- (40% Reduction in Rainfall) f3= medium, div , f4= small, div Changes in Use of Hired Labor , by Crop dried pasture corn beans soybeans limes vegetables orchards wheat sorghum 80 60 40 20 f1 0 f2 -20 f3 -40 -60 f4 -80 -100 -120 f1 f2 f3 f4 10 0 -10 -20 -30 -40 -50 % Changes in Hired Labor -60 -70 Use, by Farm Type -80 -90 UCD/Embrapa
  35. 35. Knowledge Pathways and Impact Pathways Min. of Ag. Agents of Change Embrapa CPWF Embrapa ANA Research Centers BFPPolicy Central Policy y g Water Mgmt. Policy y OECD ‘Placeholders’ ‘Placeholders’ ‘Placeholders’ ‘Pl h ld ’ Policy ‘Placeholders’ IEB -- NGOs Policy ‘Placeholders’ Placeholders Embrapa HQ Policy Core Team IPEA ‘Placeholders’ •Research Policy •Training g ‘Placeholders’ •Outreach Research Collaborators Brazilian Embrapa Research NGOs Farmers International Universities Centers • Cooperatives Research • Brasilia • Savannah Community y • Petrolina •Coastal zone • Minas Gerais •Corn and sorghum • Ceara •Semi-arid UCD/Embrapa
  36. 36. Muito Obrigado! UCD/Embrapa

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