Roles of Agriculture ProjectInternational Conference20-22 October, 2003Rome, ItalyEnvironment ModuleRoles ofAgriculturePro...
The Roles of Agriculture Project aims to extend current thinking about thesocial, environmental and economic roles of agri...
Environment Module Cross Country ReportAllali Khalil, Magdalena Lizardo, Randy StringerPaper prepared for the Roles of Agr...
Cross Country Report1The Roles of Agriculture Project (ROA) aims to extend current thinking about the social,environmental...
Environment2agricultural growth in a particular country is more likely, or less likely, to promoteenvironmental benefits. ...
Cross Country Report3socio-cultural measures to improve rural areas, promote economic incentives to increaseresource effic...
Environment4production and distribution processes entail environmental damage, including land and waterdegradation, biodiv...
Cross Country Report5How are the countries managing agricultural externalities?This section presents an initial list of en...
Environment6The following issues are proposed for discussion:a) The lack of basic information on damage caused by agricult...
Cross Country Report7Country SummariesThe charming landscape which I saw this morning, is indubitably made up ofsome twent...
Environment8important are technological drivers associated with better water management and efficiency,and sectoral polici...
Cross Country Report9and rivers;d) 20 percent of the respondents think that rice farming is favorable to the flood prevent...
Environment10e) agro-tourism might represent a very useful option to satisfy both immediate and futurepriorities associate...
Cross Country Report11land management practices. The questionnaire captured soil and water conservation practicesand farme...
Environment12input savings for wheat, producer their perception about ZT technology, and theenvironmental impacts of these...
Cross Country Report13facilities; (ii) more alternatives for recreational activities are possible; (iii) Jatiluhur has bet...
Environment14through direct physical access to home grown food). Poverty trends at the national level arepositively affect...
Cross Country Report15South Africa (T.E. Kleynhans)The South Africa study analyses the causal links between agricultural p...
Environment16ReferencesAgus, Fahmuddin and Made Oka A. Manikmas, (2003), Indonesia Environment Report,Paper prepared for t...
Cross Country Report17O´Ryan, R., M. Díaz and C. Pincheira, (2003), Perceptions of the Environmental Role ofChilean Agricu...
Table 1: Summary Table of ROA Environmental Site StudiesCountry Authors Positive Externality Reduction in NegativeExternal...
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Environment ccr 2

  1. 1. Roles of Agriculture ProjectInternational Conference20-22 October, 2003Rome, ItalyEnvironment ModuleRoles ofAgricultureProjectAgricultural and Development Economics Division (ESA)Food and Agriculture Organizationof the United Nations
  2. 2. The Roles of Agriculture Project aims to extend current thinking about thesocial, environmental and economic roles of agriculture in the developmentprocess. For more than three years, the project has worked to establish ananalytical framework; to identify the social and economic roles for which themarket prices of agricultural activities fail to convey sufficient signals to securean optimal level of those activities; and to carry out eleven country case studies.The case studies include Chile, China, the Dominican Republic, Ethiopia,Ghana, India, Indonesia, Mali, Mexico, Morocco, and South Africa.The ROA International Conference, October 20-22, provides an opportunity topresent and discuss research results from the eleven case studies and to drawon the lessons, strengths and experiences learned over the past three years forthe design and implementation of future work. The country studiesconsist of module reports (policy, environment, poverty, food security, buffer,social viability, and culture) and a national summary report. This paper hasbeen prepared for presentation to and discussion by country case study teammembers participating in the International Conference. It is a working draft.The Roles of Agriculture Project is funded through a Trust Fund from thegovernment of Japan. The project is run by the Agricultural and DevelopmentEconomics Division of the Food and Agriculture Organization of the UnitedNations. For more information on this Project or the Division andits work, see the ESA website at www.fao.org/es/esa.
  3. 3. Environment Module Cross Country ReportAllali Khalil, Magdalena Lizardo, Randy StringerPaper prepared for the Roles of Agriculture International Conference20-22 October, 2003 – Rome, ItalyAgricultural and Development Economics Division (ESA)Food and Agriculture Organizationof the United Nations
  4. 4. Cross Country Report1The Roles of Agriculture Project (ROA) aims to extend current thinking about the social,environmental and economic roles of agriculture in the development process. This paperrepresents the first attempt to draw out lessons, issues, results and experiences provided by the11 ROA country studies focused on environmental externalities. Each of the 11 countrystudies present: (i) a national level assessment of agricultural externalities (both positive andnegative); and (ii) site specific case studies providing qualitative and/or quantitativeassessments either of positive agricultural externalities or examples of a reduction in negativeexternalities. This paper is prepared for presentation and discussion by the country case studyteam members participating in the environmental module workshop at the ROA InternationalConference 20-22, October 2003.What are the objectives of the environmental module case studies?The ROA environmental module includes two types of reports. The first report is an overallnational assessment describing the prevalence, pressures and policy responses to agriculturalexternalities. The national assessment outlines how agricultural externalities impact on soil,water, biodiversity air quality, and rural amenities. The reports consider both positive andnegative externalities. The purposes of this national level assessment are: to provide a broadoverview of the major agricultural-related environmental issues facing the country; to presenta policy landscape describing what policy models and tools are being used to address thoseenvironmental issues, and to explain the pressures driving changes in agricultural practicesthat induce positive or negative externalities. The intent is to understand the underlying causesof sustainable and unsustainable agriculture, ie to what extent are technologies andmanagement practices that promote good environmental outcomes or bad environmentaloutcomes encouraged by policy failures, market failures or institutional failures.The second country environmental module report is a site specific study. The main purpose ofthe site specific study is to quantify the value of agricultural externalities, includingmeasuring the non-market values. The existence of an agricultural externality suggests thatthe agricultural practices or systems are either over producing, or under producing, somegoods or services1. The site specific case studies attempt to examine how markets, institutionsand policies interact to produce ‘sub-optimal’ social outcomes, and estimate the value of theexternality. In the site studies, the emphasis is placed on the economic and environmentalimpacts at the local, regional, national and global levels.Three theoretical background papers provide the research objectives, guidelines, andmotivations of the environmental module (Landry and Mistiaen, 2002, Lopez 2002, andMcConnell 2002). Lopez provides an overall conceptual framework for the studies, outlininghow environmental impacts of agricultural growth depend on five conditions: (i) propertyrights; (ii) the sources of agricultural growth; (iii) the types of policies used to stimulateagriculture; (iv) government credibility; and (v) whether or not farmers are subsistence orcommercial. One aim of Lopez’s conceptual framework is to allow countries to be classifiedbased on the degree to which they satisfy the five conditions.Lopez proposes a working hypothesis suggesting that the environmental consequences ofagricultural growth depend critically on the prevailing government policies and institutions.Thus, a taxonomy based on these five conditions provides insights into the likelihood that1A related explanation is that society is over or under consuming goods or services that agriculture provides
  5. 5. Environment2agricultural growth in a particular country is more likely, or less likely, to promoteenvironmental benefits. The environmental outcome, however, depends on the five prevailingconditions, with the environmental impacts ranging from very positive to massivelydestructive.Lopez then postulates that agricultural expansion based on appropriate incentives is likely toinduce an environmental dividend if certain minimum institutional conditions are satisfied.Many of these environmental services are externalities, neither taken into consideration by themarket, nor assessed by policymakers, nor represented in national accounts. Instead, othersectors may benefit from positive agricultural externalities. However, in other circumstances,agricultural growth based on inadequate incentives and weak institutions is likely to generatemassive negative environmental effects. One aim of using a typology based on the fiveconditions outlined above to identify and correct the market failures, institutional weaknessesand perverse policies to secure and enhance positive environmental outcomes.Landry and Mistiaen (2002) and McConnell (2002) provide theoretical notes for the ROAcase studies that focus on the technical aspects related to choosing site study methodologiesand to using specialized economic techniques that measure non-market goods and services.The aim of these two theoretical notes on methodologies, as well as other related backgroundmaterials, is to highlight the basic measurement principles, assumptions, data requirements,and interpretation of results. The appropriate methodology to use depends on the site studyintent and the need to estimate values from observed market behavior or rely on directquestioning of consumers. The site studies reflect a wide range of valuation techniques,including market price methods, replacement costs methods, travel costs methods, hedonicprice methods, and contingent valuation methods.What are the pressures driving changes in agricultural externalities?The ROA case study countries are a heterogeneous group of countries with diverse resourceendowments, income levels, and agricultural structures. Their agricultural sectors vary widelyboth among and within countries. Likewise, the prevailing government policies andinstitutional conditions that shape environmental consequences of agricultural growth varyacross and within the countries. However, the module reports suggest that countries do share anumber of similar characteristics, trends, and pressures that are influencing agriculturalpractices and the impact those practices have on environmental externalities.How the five prevailing conditions suggested by Lopez are addressed are fundamental tounderstanding the environmental outcomes from these pressures. Among these commonforces that are interacting with government policies and institutions to produce positive andnegative environmental impacts are: expanding globalization and trade; agricultural andsector-wide policy reforms; technological advances; and substantial changes in relative pricesleading to more intensive, more specialized, and more concentrated production anddistribution systems. Four driving forces are presented here for discussion at the workshop.First, globalization pressures, including international development community pressures tointegrate environmental objectives with agricultural objectives is making the agriculturalsector policy agenda more complex than ever in the case study countries. International anddomestic pressures are forcing policymakers to search for the right combination of
  6. 6. Cross Country Report3socio-cultural measures to improve rural areas, promote economic incentives to increaseresource efficiency, and environmental regulations to protect soil, water, food and farmworkers.During the years following the United Nations Conference on Environment and Development(UNCED), the international community’s guiding principles on sustainable development hasincreasingly implied that agriculture should widen its focus from expanding production andincreasing yields to include sustainable management of ecological processes, environmentalservices and social goods. While these objectives are not necessarily incompatible, sometrade-offs are inevitable. Despite its message of harmony, the concept of agriculturalsustainability raises tension between market-driven economic growth strategies, socialpressures for a more equitable distribution of economic opportunities and the need to maintainenvironmental productivity, ecological services and biodiversity to fulfill future economic andsocial aspirations.Second, most of the countries have signed onto a variety of multilateral environmentalagreements (MEAs), including conventions and treaties on desertification, biodiversity,climate change, forestry and fisheries. The ROA case study countries are participating invarious international bodies to harmonize criteria and codes of conduct for farming practices.If enacted fully, these commitments in the international arena have important consequencesfor agricultural production and rural development.Over time, MEAs have become increasingly specific, setting out detailed strategies andprocedures, establishing measurable objectives and standards, and setting precise dates bywhich signatories must comply. Compliance often requires changes in national legislation,state and local regulations, tax policy or regulatory systems. For the ROA countries, concernsover environmental agreements are analogous to concerns over domestic standards andenvironmental controls that influence production costs, shift relative factor prices, and therebyaffect short-term competitiveness, export performance and jobs.A third common pressure influencing environmental outcomes is the regional and global tradeinitiatives encouraging countries to integrate national level political, economic andenvironmental institutions with those at supranational and global levels. These initiatives include,for example, a revival of regionally-based arrangements (eg, AFTA, ASEAN, APEC,MERCOSUR, NAFTA), and further economic integration through the WTO.China, Chile, India, Mexico and South Africa represent examples where these trade initiativeshave had some positive environmental outcomes in local areas. Two important reasonsexplaining the positive outcomes are (i) the increased demand for safe and uncontaminatedfoods and (ii) increased demand for sustainable production practices. The export markets inROA countries are concerned more and more with the safety, nutritional quality, freshness anddiversity of their food exports. As a result, producers and exporters are increasingly occupiedwith meeting higher standards for health and safety, and levels of pesticides, contaminants,naturally occurring toxicants, as well as chemicals added for ripening and/or storage.The increased demand for sustainable production practices is related to higher incomes (bothwithin the ROA countries and in those countries importing their exports) imply high incomeelasticities of demand not only for safe foods, but also for environmental goods, such asenvironmentally-friendly production practices. Consumers are now concerned about whether
  7. 7. Environment4production and distribution processes entail environmental damage, including land and waterdegradation, biodiversity loss, and packaging waste.As pointed out in the Mexico case study, green certification and ecolabelling programmesrepresent one important market response to the demand for environmentally-friendly practicesand healthy products. Ecolabelling attempts to capitalize on the price premiums consumersare willing to pay for both the private good of safe food and the public good of an improvedenvironment. While producers have marketed the nutritional attributes of their products forsome time (such as health benefits of organic produce), only recently have they begun tomarket sustainable practice attributes.In the ROA countries where food exports are aimed at high income countries, the public andprivate institutions are building up a range of signaling mechanisms to pass on keyinformation to support producers. These signaling mechanisms include: reliable productinformation on evolving consumer preferences; easier access to documentation on importrequirements by commodity and by country; and research and extension networks thatencourage resource conservation practices by commodity. For producers who market a greatdeal of their food production in designated premium markets (ie, those markets with thehighest food safety and environmental standards, namely the EU, Japan, Korea and the US)where import requirements often vary significantly between these countries, food producersare developing procedures to react to changes within and between markets.A fourth factor facing the ROA countries is that, in general, poverty is heavily concentrated inrural areas. Many rural poor live and work in ecologically fragile, economically marginal andenvironmentally-degraded areas. Protecting environmentally-vulnerable areas and makingthem more productive requires long-term investments. Poor and subsistence producers infragile areas lack the capital necessary to invest in natural resource protection; they tend tohave high rates of time preference; and, normally, are unable even to avoid the impacts ofenvironmental degradation on their existing production base. This deterioration in theproduction potential of natural resources is a major concern for ROA countries’ future foodsecurity.Poverty often induces food producers to degrade natural resources and environmental serviceseven though they depend heavily on a sustained resource base for survival. At the same time,government programmes and policies aimed at alleviating poverty often contribute toenvironmental degradation by directly encouraging or unintentionally subsidizingenvironmental degradation. Further resource degradation contributes to more rural poverty,urban migration and erratic food production. For poor rural communities at the margin ofsubsistence, resource degradation means greater food production instability as the frequencyof poor harvests increases.As poverty reduces and incomes grow, the general tendency is for the demand forenvironmental quality to increase. Less polluting agricultural techniques become more viablewhile the political willingness to enact more stringent environmental regulation may increase.The environmental policies that a country could adopt to promote the internalisation ofexternalities also include incentives to promote those activities that yield positiveenvironmental effects. How environmental outcomes change with rises in per capita income isan important issue, but what is of more fundamental concern for the ROA project is howdifferent policies affect this relationship.
  8. 8. Cross Country Report5How are the countries managing agricultural externalities?This section presents an initial list of environmental management responses gleaned from thecountry cases. At the most general level, environmental management include three areas: (i)integrating environmental concerns into policy decision making; (ii) modifying existingpolicies to reduce negative environmental consequences; (iii) promoting local, national,regional and global initiatives. There may be examples of countries actively promoting anidentified positive externality.The most common types of policy interventions tend to be either extension and advisorymeasures or regulatory measures, eg, bans, standards, or labeling requirements. Economicinstruments such as taxes, subsidies or tradable quotas are rare in the cases presented. Chileand Mexico have enacted tradable water rights systems. The extension programmes includepromotion of alternative agriculture production systems and integrated pest management.Despite greater the growing understanding and recognition of the importance ofenvironmental policies, few systematic evaluations exist to determine which policy responsesare relatively more efficient and which policy choices are relatively more cost effective. Sotoo are studies aimed at quantifying the distributional consequences of alternative policychoices. Several reasons may explain why. First, most environmental programmes andpolicies aimed at the agriculture are recent. Second, technical difficulties associated withevaluating one particular policy when it forms part of a larger policy package. Third, a lack ofdata and/or evaluation culture and practice. Fourth, choosing appropriate alternatives withwhich to compare policy performance. Fifth, the non-point source nature of agriculturalpollution. And, sixth, incompatible division of responsibilities among government and donoragencies.What are we learning from the site studies?Table 1 summaries the measurement techniques and environmental issues analyzed in theROA country case studies. Three groups of studies emerge. The first group includes the use ofwillingness to pay estimates of positive externalities using contingent valuation, travel costand hedonic pricing methods. The positive externalities are green house gases (GHGs), agro-tourism, agro-forestry benefits and rural amenities. The second group of studies employsimilar non-market measurement methodologies or econometric techniques to quantify thevalue of reducing negative externalities or the willingness to pay for reduced pollution: GHGs,water pollution, and soil degradation. The third group of studies employs a variety oftechniques, including the Delphi technique (Chile) to better understand expert perceptions ofagricultural related environmental externalities, or economic and market assessments of howchanging agricultural practices impact on the environment.Each ROA case study represents a unique example yet each country could provide andseemingly endless supply of additional site studies and information. The final section of thisreport provides a brief overview of each reports objectives and conclusions. What may beuseful here is to glean some methodological lessons from the studies and draw lessons forfuture work. This is an important objective of the workshop.
  9. 9. Environment6The following issues are proposed for discussion:a) The lack of basic information on damage caused by agricultural practices is a ratherbig issue. More than almost any sub-discipline in economics, environmentaleconomists are dependent on information from ecologist, environmentalist, biologistsand other scientists to provide the threshold damage information. This information isoften lacking in many of the most data aggressive Industrial countries. It represents amore serious problem for developing counties.b) The need to capture the entire set of external values form field level, to global level.For example, reducing land degradation can result in increased productivity at thehousehold level, better flood control and less sedimentation at the regional level,improved food security at the national level and an improved carbon sink andecosystem at the global level. All these values need measuring.c) The need to assess net costs and benefits and to examine the opportunity costs of thesites. In addition, the need to computing shadow prices for natural resource stocksd) Better understanding of linkages between macroeconomic variables, economy widevariables and the environment (eg Green Gross National Product, sectoral greenaccounts; indicator-based approaches: wealth and genuine savings, and performanceindicators
  10. 10. Cross Country Report7Country SummariesThe charming landscape which I saw this morning, is indubitably made up ofsome twenty or thirty farms. Miller owns this field, Locke that, and Manningthe woodland beyond. But none of them own the landscape. There is aproperty in the horizon which no man has but he whose eye can integrate allthe parts, that is, the poet. This is the best part of these men’s farms, yet to thistheir land deeds them no title.Ralph Waldo Emerson, Nature (1836)Chile (Ramón López and Gustavo Anríquez)The first Chile case study considers both negative and some positive environmentalexternalities of Chilean agriculture. The paper presents a case study for an importantwatershed in Chile, the Aconcagua Valley, and an econometric analysis of input demand byChilean agriculture. Two positive environmental externalities are identified erosion protectionin sloped and vulnerable areas and carbon sequestration services estimated at about $2 millionper year, roughly, 3 percent of the value of avocado exports.The paper concludes that agricultural induced water pollution in the in the VthRegion of theAconcagua watershed, both ground and surface water, is significant but not yet critical. Theregion is one of the most productive agricultural regions in the country and the contribution ofagriculture to water pollution appears to be rather moderate. The most important agriculturecontribution to water pollution is pesticide traces found in surface water. Nitrate fertilizersmay be one source of the high nitrate content found in ground water.The paper also presents an empirical assessment of the evolution of chemical input demandby the agricultural sector, as a proxy for emissions, using time series to estimate a system ofinput demands for the Chilean agriculture. One important finding is that nitrate fertilizers aregood substitutes for pesticides. The increasing export orientation of agriculture has reducedthe pesticide dependence of agriculture. The rapid rise in pesticide demand is mostly due to areduction in the relative price of pesticides compared to other inputs. The econometricanalysis suggests that given the high price responsiveness, a modest tax on pesticides can bevery effective in reducing the pesticide/output intensity and in thus diminishing one of themost important negative environmental externality of agriculture.Chile (Raúl O´Ryan, Manuel Díaz, and Cristián Pincheira)This study uses a modified version of the Delphi Method to obtain the perceptions ofqualified respondents, in particular the positive environmental externalities and reduction ofnegative externalities.. This methodology does not require extensive data, usually unavailablein developing contexts. The study includes two areas –the semi-arid IV Region and in the VIIRegion with a mild Mediterranean climate – to identify common features as well asdifferences in the development process.The study results show that the drivers of change in both Regions are very similar. Economicdrivers that have been critical are economic openness, high exchange rates and the installationof food export businesses and cold storage plants in the Regions have been critical. Also
  11. 11. Environment8important are technological drivers associated with better water management and efficiency,and sectoral policies, specifically better road infrastructure. The main sources of growth canbe characterized as neutral in both Regions, since they affect factor productivity across theboard.The results show significant regional differences in the perceived externalities. Forty-nineexternalities, nineteen positive (or a reduction of a negative) and thirty negative externalitieswere consulted. In the IV Region 13 positive externalities and only 10 negative ones wereperceived by the majority of respondents to have increased. However in the VII Region only10 positive externalities were perceived to increase whereas 27 of the 30 negative externalitieswere considered to be present by the majority of the respondents.Some positive and negative externalities appear in both Regions. There is significantagreement that land quality has improved, agro-tourism, eco-tourism and gastronomicaltourism are important positive externalities in both Regions. Landscapes improve in bothRegions but a greater majority agrees that this is so in the IV Region. On the negative side,three biodiversity implications are considered relevant in both Regions: reduction andtransformation of natural habitats and disequilibria in the tropical chain due to clearing ofnative vegetation and loss of genetic variability due to mono-crops. Air pollution generally isnot perceived as a relevant externality in any of the Regions. However, bad odors generatedby production and damage to health of workers due to exposure to agrochemicals andpesticides are also present. Some externalities specific to each Region were also identified.Finally, the results support, with some caveats, the proposal by Lopez (2002) that neutralsources of growth coupled with stable property rights and a perception of permanence of thetransformations should lead to improved soils and water supply/balance conditions.China (Yao Lu and Dongmei Guo)The China site study examined water-related externalities in a rice-wheat farming systemlocated in the middle and lower reaches of Yangtze River. The study includes a review ofbiological and physical environmental pollution and a household survey in Zhenjiang Cityestimating the value of environmental externalities caused by agriculture. The pollutionindicators include: (i) total CH4, N2O and CO2 emissions; (ii) the average nitrogen andphosphorous discharged into water systems from non-point sources; and (iii) the total carbonsequestration of water in paddy fields and in dry lands.An economic evaluation is carried out to estimate willingness-to-pay (WTP) on the basis ofsite-surveys in Zhenjiang including more than 400 respondents. Results suggest that theexternality of chemical fertilizers from rice-wheat farming system to drinking water is valuedas 255 RMB per household per year, 2% higher than that of average household income.The survey work suggests that, generally speaking, respondents are more sensitive to thenegative agricultural externalities than the positive ones. The descriptive statistics of thesurvey that we have carried out in Zhenjiang, Jiangsu Province testifies it well as followings:a) 66 percent of the respondents think that chemical fertilizer use has negative environmentalimpacts, while only 28 percent think that organic manure has negative impacts;b) 88 percent of the respondents think that pesticides may cause environmental damage;c) 56 percent answered that agricultural activities cause soil erosion and sediments in lakes
  12. 12. Cross Country Report9and rivers;d) 20 percent of the respondents think that rice farming is favorable to the flood prevention;e) 50 percent of the respondents think that rice farming systems provide amenity services;f) 19 percent of the respondents think that rice farming system provide habit to the wildlife;g) 43 percent of the respondents think the water pollution prevention is the most importantissues among the environmental externalities of agriculture.Dominican Republic (Alejandro Herrera Catalina and Magdalena Lizardo)The Dominican Republic study attempts to analyze the links between agriculture and tourism.The study involves using contingent valuation methods to assesses tourists’ willingness to pay(WTP) for the enjoyment of agro-tourism and for the existence of agriculture’s positiveexternalities. In addition, the study analyzes the factors that could impinge on tourist’spreferences and valuation in the Dominican Republic (DR).Among the factors influencing tourist’s behavior are income, location of the touristdestination, gender, and nationality. The study highlights an agro-tourist typology’sconceptualization. It also presents an estimation of the potential income from agro-tourism.This estimation considers different WTP scenarios according to different farming systems andthe existence of positive externalities, as created by agricultural practices’ efficient use ofwater, soil, forest, landscape, rural culture, and agro-biodiversity conservation. The paperargues that a thorough development of agro-tourism would represent an effective marketmechanism to measure income that the country does not currently perceive, with a value thatvaries between US$251.0 and US$364.0 million annually. At the same time, agro-touristactivities would contribute to define a new role for agriculture, promoting sustainablepractices.Among the studies specific findings and conclusions are:(i) that tourists interested in participating in agro-tourism in the DR are basically motivated bythe cultural experience. People who like agro-tourism are also highly motivated to explorelocal cultures, and to practice eco-tourism and sports tourism;a) a tourists WTP for agro-tourism in the DR increases as his or her level of incomeincreases, and it is higher among both women and people younger than 40 years.Tourist’s, WTP is lower for tourists traveling with children;b) systems of sustainable production supply the types of amenities preferred by agro-tourists, fundamentally those relative to lifestyle and rural culture. No single amenitieshas a particular influence on the determination of WTP. The WTP for amenities linkedto a rural setting correspond to the integrated value of all the amenities that definepreferences for a rural setting;c) agro-tourism offers the potential to involve in some way 78 percent of the tourists thatvisit the DR, who can also be attracted by the existence of positive externalitiesassociated with the adoption of conservationist farming practices;d) the economic contribution of agro-tourism and the existence of positive externalitiesassociated with conservationist farming practices could exceed US$251 millionannually, which would represent 8.4 percent of the tourism income in 2002 and 10%of the farming GDP. The more optimistic scenario indicates that the income generatedcould be as much as US$364 million, which represents 12% of the tourism income in2002 and 14.1% of the farming GDP; and
  13. 13. Environment10e) agro-tourism might represent a very useful option to satisfy both immediate and futurepriorities associated with the goals of sustainable development by linking agricultureand tourism in the DR. An initial strategy to develop agro-tourism in the short-term inthe DR should consider the need for better infrastructure and personal security foragro-tourists in the rural areas and an effective negotiation with tours operators withthe objective of promoting this new tourist market for the DR.Ethiopia (Eyasu Elias)The Ethiopian study presents two cases. The first examines on-farm conservation of geneticdiversity in the enset-coffee system and its economic value. The second study values the off-farm impacts of soil erosion and siltation on a hydropower dam. The study of on farmconservation of genetic diversity documented and quantified the inter- and intra-speciesdiversity maintained by subsistent farmers in the enset-coffee farming systems in Ethiopia.Where possible, the study attempted to quantify the economic value of environmental servicesgenerated by agricultural bio-diversity. The case study provides an example of and evidencefor a positive environmental externality of traditional agriculture in Ethiopia.Questionnaires were administered to 100 sample households disaggregated by wealth group –rich, medium and poor. Key informants categorised households into three wealth groups usinglivestock ownership as local criterion of wealth. The questionnaire captured (a) the social andeconomic profile of households such as ownership of productive assets and family size that areconsidered as main factors that encourage or discourage level crop diversification; (b) on-farmagricultural diversity (i.e., inter-and intra-species diversity) at farm level; (c) understanding anddocumenting the socio-economic and cultural values of traditional on-farm conservation ofgenetic resources particularly that of traditional crops such as enset; (d) household levelvariations in the poly-culture system mediated by socio-economic factors mentioned earlier.The case study points out that farming activities in the enset culture contribute to the on-farmconservation of agricultural diversity that provides concrete evidence for positiveenvironmental externalities and public services that benefit the welfare of society. Thus, theenset-coffee farming system was selected as relevant in the national context to empiricallyanalyse the role of traditional agriculture in conserving and managing crop genetic resourcesand its benefits to the rest society and economy at large. Among the issues the studyexamined include: food security value at household level with respect to aggregate cropproductivity; environmental/ecological services such as soil erosion control, expensivechemical fertilisers use avoided and costs saved by other sectors (outside agriculture); avertedproduction losses and catastrophic effects (e.g., due to disease outbreak); and provision ofgenetic stock for international crop improvement breeding for the welfare of present andfuture generations.The second Ethiopian study quantifies the biophysical nature of soil erosion and estimates theoff-site costs due to the erosion agricultural lands upstream of the Koka dam. The aim is tounderstand the economic impact on the reservoir due to silt accumulation. Using secondarydata and survey information, the paper illustrates the negative environmental externality ofagriculture affecting the welfare of non-agricultural dependent households.A household level survey was carried out to assess the agricultural practices and the rate ofsoil erosion at farm level in the upstream catchment. A questionnaire focused on agricultural
  14. 14. Cross Country Report11land management practices. The questionnaire captured soil and water conservation practicesand farmers perception of the extent of soil erosion hazard on their farms and socio-economicvariables that mediate decisions on land management. A stratified random sample of 100households was selected based on wealth status (rich, medium, poor). Livestock ownershipparticularly that of draught oxen ownership was the major local indicator of wealth used bykey informants to stratify households.Physical quantification of sediments accumulation and valuation of its economic cost wasachieved using secondary data generated by earlier studies, namely, batyhmetric surveys andrunoff measurements gauging stations in the Upper Awash catchment. The study found thatthe Koka dam has lost about 30 percent of its designed storage volume to siltation, losingpower generation capacity and increasing greatly maintenance costs.Ghana (A. Wayo Seini, George Botchie, and Lawrence Damnyag)The Ghana case study analyses the major environmental externalities generated by the semi-deciduous forest and the Sudan savannah farming systems. The major attributes of the semi-deciduous forest zone farming systems comprise permanent tree crops and rotational bushfallow of food crop farming systems. The interior savannah zone is characterized by a mixedfarming system, comprising food crops and livestock. The two zones represent distinctfarming systems known for major agro-forestry activities. This study examines theexternalities produced in these two agro-forestry systems.The studies uses contingent valuation methods and replacement cost methods to estimate thedimensions of the environmental externalities. A CVM questionnaires was structured tocapture the maximum amount of money the respondent are willing to pay for the overallbenefits provided by: improvement of scenery, prevention of soil erosion, improvement ofwild life habitat, supply of fuel wood, preservation of soil fertility, improvement of waterretention and increase of soil fertility, arising from a hectare of an agro-forestry farm. Theresearch team also carried out in-depth interviews with selected stakeholders. These in-depthinterviews and secondary sources provided us with the information and data required for therecovery cost estimation of environmental functions.The CVM valuation showed that, in the case of the semi-deciduous farming system. Thegender of the farmer and the age of the farmer were the most important factors influencing, thewillingness to pay for improved scenery, increased soil fertility, improved water retention, andprevention soil erosion.. The age of the farmer is highly significant at the 1 percent level andgender is significant at the 5 percent level. On the other hand, the significant factorsdetermining the maximum willingness to pay in the Sudan Savannah farming system ishousehold income and age with willing to pay for supply of fuel wood and age.The replacement cost valuations suggest that in the long run, it is more expensive to restoreenvironmental attributes through measures that include dam construction and agro-forestry inthe Sudan savannah, than simple agro-forestry projects that rely on rainfall conditions (forestsystem) as well as supplementary irrigation from hand-dug wells (savannah system).India (Vijaylaxmi Pandey)The India report explores the environmental and economic benefits from adopting moreenvironmentally-friendly tillage techniques, including zero tillage (ZT). The study measures
  15. 15. Environment12input savings for wheat, producer their perception about ZT technology, and theenvironmental impacts of these technologies. Farmers perceptions are considered as importantto understanding how new techniques contribute to reducing negative environmentexternalities of agriculture and for making them more popular.The specific aims of the study are: (i) to examine the environmental impact of ZT in wheatcrop at the farm level; and (ii) to understand the perception of farmers regarding ZT. A surveywas carried on in two states; one at an advanced stage of agricultural mechanization andintensification, the other at a lower stage of agricultural development. Haryana state has longbenefited from green revolution technologies so represents the developed and irrigatedagriculture site. In Bihar state, the spill over effects of the green revolution are percolatinggradually, so it represents the lower level of agricultural advancement site. Two districts,Kaithal and Begusarai, respectively from Haryana and Bihar were selected. From the selecteddistricts equal number of both, adopters and non-adopters are surveyed.The total sample size is 400 farmers, with distribution of 200 adopters and 200 non-adoptersof ZT. Inverse sampling technique was employed to select the households. The data werecollected in collaboration with Rice Wheat consortium for the Indo Gangetic Plains (RWC).The questionnaire was tested and modified after the pilot survey in the field. The informationrecorded from the farmers include different input use in the field and different farmingoperations performed. Perceptions about ZT were recorded from both adopters and non-adopters for different set of questions. Net savings were calculated for the wheat crop. Theconversion factors were used for physical quantification of the environmental benefits.The results suggest that ZT adopters tend to be younger and their main source of livelihood isagriculture. The data show that both intensive and less-intensive agriculture experience anincrease in yield by following ZT or reduced tillage (due to drought in the year 2002), but it isobserved to be 3 percent higher for less-intensive agriculture (Bihar) than intensive agriculture(Haryana). The net savings is greater in less-intensive agriculture (Rs 701.14/ha more inBihar). This demonstrates scope for widespread of ZT and reduced tillage techniques in thecoming years in less intensive agricultural areas. From the environmental view point, ZT andreduced tillage saves emission of green house gases. Further, the amount of water used foragriculture is reduced by 20 percent.Indonesia (Fahmuddin Agus and Made Oka A. Manikmas)The Indonesia site study focuses on three sections of the Citarum River, the upstream sectionlocated in Bandung District, middle stream in Cianjur District, and down stream area inKarawang District. All three sites are located in Indonesia’s West Java Province. The studyestimates different types of non-market values, making use of three measurement methods:the Travel Cost Method (TCM) to measure the value of rural amenities; the ContingentValuation Method evaluates the willingness to pay for environmentally sound agriculturalprograms; and the Replacement Cost Method (RCM) is used measure the trade off betweeneconomic values of agricultural land use and environmental services. The TCM involved 120respondents and the CVM involved 180. The RCM relied on secondary data backed up withgroup interviews to substantiate the information.The travel cost study found the willingness to pay for visits to Jatiluhur Dam is significantlymore attractive than Cirata Dam. This reasons include: (i) closer to Jakarta and has better
  16. 16. Cross Country Report13facilities; (ii) more alternatives for recreational activities are possible; (iii) Jatiluhur has betterpromotion to attract visitors; (iv) Jatiluhur is the biggest and the oldest Dam in West Java; and(v) Jatiluhur is more accessible than Cirata.The CVM found that both professional and farmers willingness to pay for environmentalprograms in the upstream area was highest for reforestation programs, followed by agro-forestry, terracing and alley cropping. In the middle stretch of the river, professionals werewilling to pay more for reforestation, but farmers were willing to pay more for alley cropping.From all raised environmentally sound programs, either professional or farmer ready to paythe largest amount for irrigation and drainage system programmes in downstream areas, whilesupporting reforestation programmes upstream of Citarum.Some 37 percent of the total economic value of agricultural land in the Citarum river basin isprovided by marketed products. About 73 percent is contributed by the economic value ofland in conserving the environment. Without conservation and this region would experiencean estimated economic loss of not less than US $2.65 billion/year.Mali (K. N’Diaye, A. Kouriba, L. Diarra, O. Kergna, Hugo Verkuijl)The objective of the Mali study is to document a number of important irrigation-led changesthat have taken place in the delta of the Niger River where the Office du Niger (O.N.) wascreated in 1932. The major impact of the delta river scheme is the transformation of an aridarea into a humid and densely populated ecosystem of primary economic, demographic andsocial importance. Thanks to the irrigation, a viable habitat with rural development has beencreated with important contributions to poverty reduction. Household food security andincome have increased through direct physical access to food and through the diversificationof income sources.The study points out that most impact studies highlight water use efficiency difficulties. TheO.N.’s irrigation efficiency (ie, the share of the water diverted from the river that iseffectively used by plants) ranges between 40 and 60 percent. Waterlogging is contributing tosalinity and related soil problems, reducing productivity. On the other hand, the rise in thewater table has significant positive spillovers which this study highlights and quantifies.Among these positive benefits are: (i) the re-use of drainage water for rice and otherproduction with substantial market output; (ii) a number of social and environmental benefitscan be observed which are not mediated through markets. One of these is a greatly facilitatedaccess to water for domestic use by the ever growing population which dramatically reduceslabour and costs related to domestic water supply; (iii) the rise in the water table makes treegrowing and re-forestation possible alongside the irrigation plots, producing wood for thelocal communities, and has contributed to the viability of orchards plantations andhorticulture, which in turn provide enhanced living conditions, a micro-climate, local wood-related businesses, as well as improved nutrition; and (iv) the use of drainage water has led tothe creation of a number of villages along major drains where the water is used for cattle,horticultural production, and the abandonment of millet in favour of rice.The study notes that the O.N.’s development causes negative externalities such as malariaincidence increases and impacts on the Niger’s delta water balance and ecosystemsdownstream the O.N. A major positive externality is the creation of a cultivated eco-system,related to national food supply and to household food security (the latter being enhanced
  17. 17. Environment14through direct physical access to home grown food). Poverty trends at the national level arepositively affected by the revitalisation of the O.N.Mexico (María Eugenia Ibarrarán, Enrique Guillomen, José Iván Rodríguez)The Mexico study analyses the rise or organic coffee production to assess agriculturalcontribution to positive environmental externalities and sustainable agriculture, The studycompares organic coffee production practices with the conventional methods. The objective isto distinguish positive environmental externalities that emerge from organic agriculture in thisparticular case.Mexico is a leader in organic agriculture, exporting to Canada, Europe, Japan and the US.Mexico is the world’s fifth largest coffee producer, after Brazil, Colombia, Indonesia andVietnam, but the world’s largest producer of organic coffee, and one of the first to produce"gourmet" coffee. Coffee is produced on a total of 690,000 hectares in 12 states in the central-south part of the country. It is grown in the shade with care being taken to protect theecosystem. Mexican coffee growers, therefore, produce positive environmental externalitiesthrough soil, water, and ecosystem protection.The study examines a commercial firm, Ecole-Café, involved in the production of organiccoffee. The main environmental benefits derived from this project are a reduction in the use ofchemicals and fossil fuels, and substitution of these for renewable resources and naturalfertilizers. In addition, Ecole-Café increases carbon sequestration and provides naturalsettings for migratory birds to stay during their journey during the winter. It provides a clearexample of how business and environmental protection can go together.An important message emerging from this case study is that organic agriculture promotes therational use of natural resources. While initially, organic coffee production was sustainedthrough making use of traditional practices, it has evolved quickly to incorporate morescientific knowledge involving complex practices. Although limited, this case study showshow these integration techniques can be attained.Sustainability implies satisfying necessities in the present without compromising the wellbeing of future generations. This study suggests that extending organic agriculture techniquesto produce food and other agricultural products based on protecting natural resources makeseconomic and ecological sense. The study further concludes that more research should bedirected at appropriate technologic option to attain sustainable development through organicproduction, aimed at lowering the costs of production practices and international certificationrequirements.Morocco (Allali Khalil)The Morocco environmental module examines two separate cases. The first use contingentvaluation techniques to measure rural amenity associated with agriculture. The second useshedonic pricing techniques to estimate the value of agro-tourism. These studies are beingtranslated into English from French and will be discussed at the Conference workshop.
  18. 18. Cross Country Report15South Africa (T.E. Kleynhans)The South Africa study analyses the causal links between agricultural practices andenvironmental outcomes in several locations around the country. The study focuses on howinstitutional factors influence agricultural practices and the resulting environmental impacts.The study concludes that the South African government, together with semi-governmentalagency influences on agricultural education, research and extension have all contributed toenhancing a culture of environmental and sustainable production awareness and promotingappropriate technologies that to implement sustainable production.These investments in human capital, soil and veld conservation programmes, andconservation legislation have resulted in measurable improvements both in variousenvironmental health indicators, including biodiversity and soil quality. This institutionalinfluence has had a far greater effect on agricultural practices in the commercial farming areasthan in the communal farming areas. A fact reflected clearly in the findings of the nationalstudy on soil and veld degradation.A second major influence in environmental outcomes has been the retail food chains sellingfruit in the northern hemisphere. These food retailers have exerted their dominant bargainingpower upwards along the supply chains to export oriented deciduous, citrus and subtropicalfruit farms, encouraging environmentally beneficial changes in production practices along theway. The study suggest that these positive changes have the intensive perennial cropproduction areas of South Africa have been much faster with the commercial retail goodexporters chains than what is attained via government legislation.The most effected agricultural practices during the past ten to fifteen years have been: (i) theadoption of less tillage and the use of tooth implements; (ii) more careful fertilization ofcropland based on soil sample analyses and fertigation of perennial crops; (iii) more carefulcrop protection by using less toxic and less quantities of insecticides and fungicides, reducinggreatly the active ingredients per hectare. Other innovations include narrower plant spacing,better seed and fruit cultivars, virus free plant material and better livestock breeding stock.The national overview shows either a slow down in the rate of soil and veld degradation, or anactual improvement of soil and veld and thus biodiversity conditions in commercial farmingareas. The groundwater quantity, rather than quality, appears to be more of an issues in thedrier areas. In the wetter areas, where more intensive agriculture is found and thus morefertilization takes place, various factors - such as the number and distribution of measuringpoints - complicate efforts to identify agriculture as the major cause of deteriorating groundwater and surface water quality. Agricultural impacts on air quality in South Africa is not acritical issue. The influence of agriculture on rural amenities in South Africa is unclear.
  19. 19. Environment16ReferencesAgus, Fahmuddin and Made Oka A. Manikmas, (2003), Indonesia Environment Report,Paper prepared for the Roles of Agriculture International Conference, 20-22 October 2003,Rome, Italy.Allali, K., (2003a), Externalités Pécuniaires Positives de l’Agriculture sur le Tourisme deMontagne au Maroc: Application de la Méthode des Prix Hédonistes au Marché des GîtesFamiliaux du Haut Atlas Occidental Marocain, Paper prepared for the Roles of AgricultureInternational Conference, 20-22 October 2003, Rome, Italy.Allali, K., (2003b), Valeur Sociale de la Conservation du Paysage Agricole au Maroc:Application de la Méthode d’Evaluation Contingente au Paysage Agricole de la Chaouia,Paper prepared for the Roles of Agriculture International Conference, 20-22 October 2003,Rome, Italy.Diarra, L., O. Doumbia, A.O. Kergna, A. Kouriba, M. KN’diaye and H. Verkuijl, (2003),Analyse des Externalités Environnementales des Deux Systèmes de Productions Ciblés, Paperprepared for the Roles of Agriculture International Conference, 20-22 October 2003, Rome,Italy.Elias, E., (2003a), On-Farm Conservation of Genetic Diversity in the Enset-Coffee Systemand its Economic Value (An Example of Positive Environmental Externality of Agriculture),Paper prepared for the Roles of Agriculture International Conference, 20-22 October 2003,Rome, Italy.Elias, E., (2003b), Off-Farm Impacts of Soil Erosion: Siltation in the Hydropower Dam (AnExample of Negative Environmental Externality of Agriculture), Paper prepared for the Rolesof Agriculture International Conference, 20-22 October 2003, Rome, Italy.Ibarrarán, M.E., E. Guillomen and J.I. Rodríguez, (2003), Environmental Roles of Agriculturein Mexico: Case Study of Organic Coffee Production in Mexico, Paper prepared for the Rolesof Agriculture International Conference, 20-22 October 2003, Rome, Italy.Khalil, A., (2003a), Externalités Pécuniaires Positives de l’Agriculture sur le Tourisme deMontagne au Maroc: Application de la Méthode des Prix Hédonistes au Marché des GîtesFamiliaux du Haut Atlas Occidental Marocain, Paper prepared for the Roles of AgricultureInternational Conference, 20-22 October 2003, Rome, Italy.Khalil, A., (2003b), Valeur Sociale de la Conservation du Paysage Agricole au Maroc:Application de la Méthode d’Evaluation Contingente au Paysage Agricole de la Chaouia,Paper prepared for the Roles of Agriculture International Conference, 20-22 October 2003,Rome, Italy.Kleynhans, T.E., (2003), Environmental Roles of Agriculture in South Africa, Paper preparedfor the Roles of Agriculture International Conference, 20-22 October 2003, Rome, Italy.López, R. and G. Anríquez, (2003), Environmental Externalities of Agriculture: Chile 1980-2000, Paper prepared for the Roles of Agriculture International Conference, 20-22 October2003, Rome, Italy.
  20. 20. Cross Country Report17O´Ryan, R., M. Díaz and C. Pincheira, (2003), Perceptions of the Environmental Role ofChilean Agriculture, Paper prepared for the Roles of Agriculture International Conference,20-22 October 2003, Rome, Italy.Landry Craig E. and Johan A. Mistiaen, (2002), Non-market Valuation of the EnvironmentalRoles of Agriculture in Developing Countries, Rome: FAO.Lopez, R. (2002), A Note on the Environmental Effects of Agricultural Expansion, Rome:FAO.McConnell, Kenneth E., (2002), Issues in Valuing Agricultural Externalities, Rome: FAO.Catalina, A.H. and M. Lizardo, (2003), Case Study of Agriculture’s EnvironmentalExternalities Valuation: Agro-Tourism in the Dominican Republic, Paper prepared for theRoles of Agriculture International Conference, 20-22 October 2003, Rome, Italy.López, R. and G. Anríquez, (2003), Environmental Externalities of Agriculture: Chile 1980-2000, Paper prepared for the Roles of Agriculture International Conference, 20-22 October2003, Rome, Italy.N’Diaye, K., A. Kouriba, L. Diarra, O. Kergna and Hugo Verkuijl, (2003), The HiddenBenefits of the Office du Niger Irrigation Scheme, Paper prepared for the Roles of AgricultureInternational Conference, 20-22 October 2003, Rome, Italy.O´Ryan, R., M. Díaz and C. Pincheira, (2003), Perceptions of the Environmental Role ofChilean Agriculture, Paper prepared for the Roles of Agriculture International Conference,20-22 October 2003, Rome, Italy.Pandey, V., (2003), Environmental Impact of Improved Technology-Farm Level Survey andFarmers’ Perception, Paper prepared for the Roles of Agriculture International Conference,20-22 October 2003, Rome, Italy.Seini, A.W., G. Botchie and L. Damnyag, (2003), Analysis of the Environmental ServicesProvided by Selected Farming Systems in Ghana, Paper prepared for the Roles of AgricultureInternational Conference, 20-22 October 2003, Rome, Italy.Yao, L. and G. Dongmei, (2003), Evaluation of Environmental Roles in Physical Dimensionand Economic Value: Case Study of Farming System in Middle and Lower Reaches ofYangtze River, Paper prepared for the Roles of Agriculture International Conference, 20-22October 2003, Rome, Italy.
  21. 21. Table 1: Summary Table of ROA Environmental Site StudiesCountry Authors Positive Externality Reduction in NegativeExternalityMethodologyChile Ramón López,Gustavo AnríquezSoil protection and GHGs Water Pollution EconometricChile Raúl O´Ryan,Manuel DíazExpert Perceptions Perceptions DelphiChina Yao Lu,Dongmei GuoGHGs Water Pollution Contingent ValuationDominican Republic Alejandro Herrera CatalinoMagdalena LizardoAgro-tourism Contingent ValuationEthiopia Eyasu Elias Genetic diversity Market ValueEthiopia Eyasu Elias Soil erosion and siltation Market ValueGhana A. Wayo Seini ,George Botchie,Lawrence DamnyagBenefits of Agro-forestry Contingent Valuation andReplacement CostIndia Vijaylaxmi Pandey Soil erosion, watersavings and GHGsMarket ValuesIndonesia Fahmuddin AgusMade Oka A. ManikmasRural amenitiesAgriculture production vsenvironmental servicesLess damagingagricultural practicesTravel Cost, ContingentValuation and ReplacementCostMali K. N’Diaye, A. Kouriba,L. Diarra, O. Kergna,Hugo VerkuijlIrrigation infrastructure Economic AssessmentMexico María Eugenia Ibarrarán,Enrique Guillomen, JoséIván RodríguezOrganic Coffee Economic AssessmentMorocco Allali Khalil Rural Amenities Contingent ValuationMorocco Allali Khalil Agro-tourism HedonicSouth Africa T.E. Kleynhans Land, soil, water andchemical useEconomic Assessment

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