This chapter makes a case for investing in greening the agriculture5
sector, emphasising the potential
global benefits of making this transition. It provides evidence to inspire policymakers to support increased green investment and guidance on how to enable this transformation, which aims to enhance food security, reduce poverty, improve nutrition and health, create rural jobs, and reduce pressure on the environment, including reducing GHG emissions.
The chapter begins with a brief overview of agriculture at the global level, followed by a discussion on conceptual issues including two predominant farming-practice paradigms, i.e. conventional (industrialised) agriculture systems and traditional (subsistence) smallholder agriculture. The section ends with a brief description of key characteristics of the green agriculture paradigm. Section 2 presents the major challenges and opportunities related to the greening the agriculture sector and Section 3 discusses a wide range of sustainable agriculture practices, mostly using examples and evidence from the organic sector, which is relatively rich in data. The section starts with an overview of the cost of degradation resulting from current agricultural practices and benefits of greening the sector. It is followed by an outline of some of the priorities for investment. The section ends with a discussion on the results of an economic modelling exercise, which presents future scenarios for green agriculture and business-as-usual (BAU). Section 4 shows how global and national policy as well as capacity building and awareness raising can facilitate necessary investments and encourage changes in agricultural practices. Section 5 concludes the discussion.
1.1 General background
Agriculture is a major occupational sector in many developing countries and is an important source of income for the poor. World Bank statistics (2010) show agricultural value-added as a percentage of GDP to be 3 per cent for the world as a whole, and 25 per cent for low income countries (LICs), 14 per cent for lower middle income countries (LMICs), 6 per cent for upper middle income countries (UMICs) and 1 per cent for high income countries (HICs).6
Approximately 2.6 billion people rely on
agricultural production systems – farming, pastoralism, forestry or fisheries – for their livelihoods (FAOSTAT 2004).
To date, global agricultural productivity has more than kept up with population growth (FAO 2009; IAASTD
38
2009). However, agricultural productivity per worker and per land unit varies a great deal across countries. Agricultural productivity per worker in 2003-05 was 95 times higher in HICs than in LICs, and this difference increased compared with 1990-1992, when it was 72 times higher. Industrial agriculture mostly practiced in developing countries, continues to generate high levels of production – more than 50 per cent of the world value added in agriculture and food processing – but it also accounts for proportionally more adverse environmental impacts than lower-yield traditional farming (World Bank 2010). Agriculture in developing countries is becoming more productive. Over the above period, aggregate agricultural productivity per worker in developing countries increased by 21 per cent, albeit from a very low base.
Despite the increasing productivity of agriculture, nearly 1 billion people remain malnourished. Between 2000 and 2007, over a quarter (27.8 per cent) of children under the age of five in LICs were malnourished (World Bank 2010). Moreover, over half of food-insecure families are rural households, often in countries such as India that have food surpluses. A transition in the agricultural paradigm must also assist in meeting this challenge.
Agriculture also has tremendous potential to alleviate poverty. A large proportion of the rural population and labour force in developing countries is employed in agriculture. On average, the contribution of agriculture to raising the incomes of the poorest is estimated to be at least 2.5 times higher than that of non-agriculture sectors in developing countries. Underscoring the relationship between increasing yields and return on labour with poverty, Irz et al. (2001) estimate that for every 10 per cent increase in farm yields, there was a 7 per cent reduction in poverty in Africa and more than a 5 per cent poverty- reduction effect for Asia. Growth in manufacturing and services do not show a comparable impact on poverty reduction. The World Bank (2010) reported that an increase in overall GDP derived from agricultural labour productivity was, on average, 2.9 times more effective in raising the incomes of the poorest quintile in developing countries than an equivalent increase in GDP derived
5. In this report agriculture includes only crop and animal husbandry unless clearly indicated otherwise. Forestry and fisheries are covered in separate chapters.
6. World Bank Classification: Low-income economies (US$ 1,005 or less), Lower-middle-income economies (US$ 1,006 to US$ 3,975), Upper-middle- income economies (US$ 3,976 to US$ 12,275), High-income economies (US$ 12,276 or more); Available at: http://data.worldbank.org/about/country- classifications/country-and-lending-groups.