I1G332- FeAb. I/q?7 WORLD BANK ENVIRONMENT PAPER NUMBER 15 Mainstreaming Biodiversity in Agricultural Development Toward Good Practice Global Overlays Program Stefano Pagiola and John Kellenberg with Lars Vidaeus and Jitendra Srivastava /AA~~~ A/%A\ RECENT WORLD BANK ENVIRONMENT PAPERS No. 1 Cleaver, Munasinghe, Dyson, Egli, Peuker, and Wencelius, editors, Conservation of West and Central African Rainforests/Conservation de laforet dense en Afrique centrale et de l'Ouest No. 2 Pezzey, Sustainable Development Concepts: An Economic Analysis No. 3 Munasinghe, Environmental Economics and Sustainable Development No. 4 Dewees, Trees, Land, and Labor No. 5 English, Tiffen, and Mortimore, Land Resource Management in Machakos District, Kenya, 1930-1990 No. 6 Meier and Munasinghe, Incorporating Environmental Concerns into Power Sector Decisionmaking: A Case Study of Sri Lanka No. 7 Bates, Cofala, and Toman, Alternative Policies for the Control of Air Pollution in Poland No. 8 Lutz, Pagiola, and Reiche, editors, Economic and Institutional Analyses of Soil Conservation Projects in Central America and the Caribbean No. 9 Dasgputa and Maler, Poverty, Institutions, and the Environmental Resource Base No. 10 Munasinghe and Cruz, Economywide Policies and the Environment: Lessons from Experience No. 11 Schneider, Government and the Economy on the Amazon Frontier No. 12 Munasinghe, Global Climate Change: Economic and Policy Issues No. 13 Kramer, Sharma, and Munasinghe, editors, Valuing Tropical Forests: Methodology and Case Study of Madagascar No. 14 Current, Lutz, Scherr, editors, Costs, Benefits, and Farmer Adoption of Agroforestry: Project Experience in Central America and the Caribbean WORLD BANK ENVIRONMENT PAPER NUMBER 15 Mainstreaming Biodiversity in Agricultural Development Toward Good Practice Global Overlays Program Stefano Pagiola and John Kellenberg with Lars Vidaeus and Jitendra Srivastava The World Bank Washington, D.C. Copyright © 1997 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing February 1997 Environment Papers are published to communicate the latest results of the Bank's environmental work to the development community with the least possible delay The typescript of this paper therefore has not been prepared in accordance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. 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Stefano Pagiola is an economist in the World Bank Environment Department. John Kellenberg is a consultant to the department. Lars Vidaeus is chief of the Global Environmental Unit, and Jitendra Srivastava is the Principal Agriculturalist in the Agriculture and Natural Resources Department. Library of Congress Cataloging-in-Publication Data Pagiola, Stefano Mainstreaming Biodiversity in agricultural development: toward good practice / Stefano Pagiola, John Kellenberg ; with Lars Vidaeus, Jitendra Srivastava. p. cm. - (World Bank environment paper ; no. 15) (Global overlays program) Includes bibliographical references. ISBN 0-8213-3884-6 1. Agricultural economy. 2. Biological diversity conservation 3. Agriculture-Economic aspects. 4. Agricultural development projects. I. Kellenberg, John. II. World Bank. III. Title. IV. Series. V. Series: Global overlays program. S589.7.P34 1997 333.95'16-dc2l 97-994 CIP Contents Foreword .......................................................... v Acknowledgments .......................................................... vi Executive Summary ............................................................ vii 1. Introduction ............................................................. 1 2. Conflicts and Complementarities Between Agriculture and Biodiversity ..... ......... 5 Global Trends .......................................................... 5 Interactions Between Agriculture and Biodiversity ................................... 6 Agriculture and Biodiversity's Services ............................................. 10 Biodiversity as an Input to Agriculture ................ ............................. 12 3. Understanding the Causes of Conflict ................ ............................. 16 Market Failures ............................................................. 17 Factors Affecting Farmer Incentives ................................................ 18 Stylized Examples of How Biodiversity Is Undervalued .............................. 21 4. Responses to the Problems . ...................................................... 24 Recognizing and Diagnosing Threats to Biodiversity ................................. 24 Addressing Policy Distortions ..................................................... 25 Reducing Market Failures ........................................................ 27 Improving Research and Extension . ............................................... 30 Complementary Conservation Measures ............. .............................. 32 Valuing Benefits and Assessing Tradeoffs ........................................... 34 Implementation Problems ........................................................ 35 5. The Challenge for the World Bank . ................................................ 37 Mainstreaming at the Country Level .......................... 37 The Role of the Bank .......................... 38 Glossary ............................ 47 Bibliographic review .....................................48 iv Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Figures 1. Conceptual framework . .......................................................... 3 2. Comparison of biodiversity in forest and agricultural ecosystems in Borneo ..... ........ 7 3. Key steps in mainstreaming biodiversity in World Bank sector work .................... 42 Boxes 1. What is biodiversity? ............................................................. 2 2. Intensification and pesticide use in Bangladesh ...................................... 22 3. Rapid assessment of biodiversity .............. .................................... 26 4. Policy responses to deforestation in the Amazon ..................................... 27 5. Compensating farmers for intellectual property rights to biological information ......... 29 6. Trust funds: compensating local communities for biodiversity conservation ..... ........ 30 7. How can agriculture promote biodiversity conservation? ............................. 31 8. Elements of a new agricultural research and development model ....... ............... 32 9. Integrated Pest Management: biodiversity and ecological knowledge at work ..... ...... 33 10. Global plan of action for conservation and sustainable use of plant genetic resources ..... 34 11. Greening Country Assistance Strategies: toward good practice ........................ 39 12. The Global Environment Facility .............. .................................... 40 13. The Global Overlays Program ................. ................................... 41 14. Capturing the convergence between conservation and agricultural interests ..... ....... 45 Foreword The World Bank is committed to helping its studies as a means of identifying good practices developing country partners implement their for country planners and Bank task managers. obligations under the Convention on Biological The results will help guide national actions to Diversity. This commitment, backed by an conserve biodiversity, reduce greenhouse gas action agenda, is described in the 1995 report emissions, and protect international waters. Mainstreaming Biodiversity in Development: A This study is a key activity of the Global World Bank Assistance Strategyfor Implementing Overlays Program. It provides the foundation the Convention on Biological Diversity. A key ele- upon which in-depth country studies will build ment of the action agenda is to help countries to develop good practices in mainstreaming design and implement biodiversity-friendly biodiversity in agricultural development. sector policies and programs. The Bank's sector Agricultural development is linked in work in agriculture, natural resource mana- Agrtantural diversit iservatdon gement, and rural development must be fully important ways to biodiversity conservation, responsive to this need, and its lending proto- through impacts on natural habitats and the use resncrafted to help Governments mainstream of biodiversity in sustainable agriculture. In grams at the Govevel. planning agriculture sector development, Gov- ernments need to assess the extent to which the Global Overlays Program, launched by policies, institutions, and investment programs the Bank's Environmentally Sustainable have to change to accommodate the objectives Development Vice Presidency (ESD) in partner- of conserving biodiversity, as well as the costs ship with bilateral donors and NGOs, seeks to and benefits of such adjustments. internalize global externalities into national environmental planning and the Bank's sector work, operations, and dialogue with govern- ments and partners. It is an iterative process, combining conceptual studies, reviews of state-of-the-art techniques for measuring and Ismail Serageldin mitigating global externalities, and testing these Vice President concepts and tools through country-level Environmentally Sustainable Development v Acknowledgments This paper was written by Stefano Pagiola and Institute (WRI) reviewing the conflicts and John Kellenberg, of the World Bank's Global complementarities of agricultural development Environment Division (ENVGC), under the and biodiversity conservation. Background guidance of Lars Vidaeus, Chief of the Global materials were prepared by Sanjiva Cooke, Environment Division, and Jitendra Srivastava, Narpat Jodha, John Kellenberg, William Principal Agriculturalist in the Agriculture and Magrath, Stefano Pagiola, and Ann Thrupp Forestry Systems Division (AGRAF). (WRI). This paper draws heavily on the existing Useful comments were provided by David literature and documentation of lessons learned Cassells, John Dixon, Doug Forno, Ernst Lutz, from Bank and other projects. In addition, a Kathy MacKinnon, Colin Rees, Louise Scura, number of special studies were undertaken. and Ethel Sennhauser of the World Bank's These include work commissioned by the Environment Department, Anthony Whitten of Agriculture Department on Biodiversity Mana- the Asia Technical Department, Philip Brylski gement for Agriculture, studies by teams of of the Europe and Central Asia Country specialists in the Environmentally Sustainable Department, and Nigel Smith of the University Development Vice-Presidency (ESD) on special of Florida. topics, and work by the World Resources vi Executive Summary Agriculture has played a major role in the Current patterns of agricultural develop- decline of biodiversity, as it is the human ment are undermining biodiversity and the activity that affects the largest proportion of the many valuable services it provides. By destroy- earth's surface and is the single biggest user of ing or disturbing their habitat, agriculture freshwater worldwide. Its expansion and threatens the survival of many species, some of intensification are considered to be major which are valuable in themselves and some of contributors to loss of habitat and reductions which are critical to ecosystem functions. of biodiversity worldwide. Agricultural land- Conversion or modification of natural habitats scapes, however, can contain considerable bio- for agricultural use also affects the services diversity; indeed, biodiversity often plays a provided by ecosystems and their stability and crucial role in agricultural production. As the resilience. world's population continues to grow, finding Agriculture is highly dependent on eco- ways to increase agricultural production with- system products and services, including genetic out destroying the many benefits provided by information for development of new crop biodiversity-not least to agriculture itself- varieties, crop pollination, soil fertility services will be a major challenge. provided by microorganisms, and pest control services provided by insects and wildlife. Yet interactions Between Agriculture and agricultural practices often threaten the eco- Biodiversity system's ability to continue providing these services, thus jeopardizing the long-term Because production increases require either sustainability of agricultural production. agricultural expansion or intensified produ- Preventing loss or damage to biodiversity ction within existing areas, the two broad areas beventimpor dans to ersity of concern are the effects of conversion of natural can be an important means to enhance habitat to agriculture and the effects of agri- agricultural production and development. For cultural intensification. Habitat conversion is example, ecosystem resilience within agri- particularly harmful to biodiversity, since it cultural landscapes may be safeguarded by substantially modifies natural areas. Agri- maintaining spatial biodiversity (using culsturtallanmodscaes nalocturai biodivea grsit relatively large numbers of species, preferably howevr,l landscintensificaontion of landiuse with significant genetic variation within each however, thi iningioiverity In each se crop) and temporal biodiversity (frequently effects experienced on-site must be distin- changing crops or varieties). Likewise, soil guished from effects experienced offisite; health may be maintained through the use of agriculture can have effects far beyond the area intercropping, cover crops, and increased use of actually cultivated. manure and crop residues. vii viii Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Understanding the Causes of Conflict damage to biodiversity also tend to be econo- mically inefficient. A basic principle of biodi- Understanding why the relationship between versity-friendly policy reforms is to discourage agriculture and biodiversity has been so agricultural extensification and encourage agri- marked by conflict requires understanding the cultural intensification. incentives driving land-use decisions made by Eliminating the marketfailures that are the root millions of individual farmers. of the undervaluation of biodiversity is diffi- Any decision to change land use should cult, but the payoff can be substantial. Possible weigh the benefits obtained from a change approaches include imposing environmental against its costs. However, the costs of biodi- taxes, revising property rights, developing new versity loss often are not borne by those income opportunities dependent on biodi- deciding whether or not to conserve it. Many versity conservation, and developing mecha- benefits of biodiversity are either externalities nisms to compensate local communities for or public goods, so individual farmers have genetic material collected in their areas. little incentive to take them into consideration Farmers' choices are limited to what is when making land-use decisions. As a result of technically feasible. Improvements to available the poorly functioning or non-existent markets technologies could go a long way towards both for many services provided by biodiversity, reducing conflicts between agriculture and these services are systematically undervalued biodiversity and increasing the sustainability of by resource managers. This results in socially- agricultural development. New approaches to excessive rates of biodiversity loss. agricultural research, which emphasize better The under-valuation of biodiversity's management of biological resources, are being benefits is often exacerbated by the effects of tested around the world. Research is increa- government policies, including both agriculture- singly turning to biological assets, including specific policies and broader economic policies. manipulation of genes and predators of insect In many countries, for example, policies have pests. Improvements to extension are also discriminated against agriculture, thus stifling important to ensure that new techniques, agriculture and discouraging intensification, inputs, and information emerge that promote leaving agricultural expansion as the only biodiversity-friendly agricultural production means to increase production. Governments reach farmers. have also often subsidized the use of harmful Since the pressures on biodiversity in inputs, such as pesticides. In some countries, agriculture are so great, targeted conservation land settlement programs have led to wide- efforts are needed to complement the broader scale conversion of natural habitats. responses and help to minimize damage. Such Responses to the Problems complementary measures might include pro- tection of particularly important parts of areas being converted to agriculture, including Recognizing and diagnosing the causes of nesting sites, riparian areas, and wetlands; biodiversity loss is a prerequisite for appropriate preservation of corridors between remaining responses. Despite recent efforts, however, h s iservation of paicual most countries have so far made little progress valuable sies andeffor o prtct in this regard. ~~~valuable species; and efforts to protect threatened species in situ. Reforming economy-wide and sectoral policies is Mainstreaming biodiversity in agricultural an important first step to conserving biodi- developmentmeansaddressingthesestrategic versity. Moreover, win-win policies often exist, elements. Factors that constrain or encumber since policy distortions which exacerbate Executive Summary ix such mainstreaming fall into three main While there is no a priori reason for all CASs categories: to address biodiversity conservation, it would * Lack of information and a generally poor be legitimate to do so in cases where understanding of the nature of effects make * agriculture is the main engine of growth and problem assessment and identification of the maintenance of a diverse biological base appropriate and specific responses difficult. is critical to such growth; * The traditional focus on sectoral production * prudent use and conservation of biodiversity and employment objectives and institutional amounts to management of an important barriers to cross-sectoral coordination have part of the national capital stock; and/or effectively prevented inclusion of * the country harbors globally significant biodiversity conservation in agricultural biodiversity which it is committed to pre- development planning. serve as a Party to the Convention on Biolo- * Lack ofproven methods to address biodiversity gical Diversity. loss problems. Although a wide range of At the level of agricultural sector work, the tools and mechanisms have been proposed, Bank needs to strengthen its ability to help experience with their use remains limited. developing country partners address four main The Challengefort kquestions: The Challenge for the Bank * What impact do agricultural development activities have on biodiversity, both in the The Bank's commitment to assisting its deve- areas actually used for agriculture and loping country partners in mainstreaming outside them? biodiversity in agricultural development is . How can sustainable uses of biodiversity essential for several reasons: enhance agricultural development? X Conservation of biodiversity is linked to . How can economy-wide and agriculture sustainable agricultural development. policies and programs be modified to reduce * The Bank is committed to helping client biodiversity losses? What factors constrain governments meet their obligations under policy adjustments and institutional the Convention on Biological Diversity. reforms? * As an implementing agency for the Global . What are the tradeoffs between agricultural Environment Facility (GEF), the Bank has a development objectives and biodiversity direct responsibility to help client govern- conservation, and how can they be ments mainstream biodiversity in deve- evaluated? lopment. Good practice in addressing these questions To deliver on this commitment, the Bank is being developed under the Global Overlays needs to integrate, where appropriate, biodi- Program, initiated by the Bank with donor, versity conservation as an objective into its NGO, and other partners. The next step envi- operations at the levels of country assistance saged in the program is to support efforts by strategy, agricultural sector review and ana- developing country partners to answer the lysis, and project design and implementation. above or similar questions as part of proposed The Bank's Country Assistance Strategies agricultural planning studies. (CASs) have traditionally focused on macro- Finally, at the project level, the challenge for economic performance. Although increased the Bank is fourfold: emphasis has been given to addressing con- * Promote identification of synergies between straints in key sectors of the economy in recent biodiversity conservation and agricultural years, sectoral and environmental issues are development, and build them into project generally not fully integrated in the CASs. design. x Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice * Broaden the use of environmental assessments awareness of mainstreaming biodiversity in as a tool to mainstream biodiversity in agri- agricultural development. culture. This includes using sectoral and * Deepen the implementation of 'do no harm' regional environmental assessments to strategies in the design of agricultural pro- screenbothpublic investmentprograms and jects by effective use of environmental upstream project design options against the assessments, and by systematically applying objectives of biodiversity conservation. the Bank's policy on compensatory actions * Use agricultural investment and sector adjust- for natural habitats threatened by proposed ment operations as instruments to support project activities. policy reform, institutional capacity, and 1. Introduction The past century has seen a strikingly high rate culture, industry, or human consumption; of species loss as a result of human-induced reducing sedimentation in reservoirs, harbors, processes of conversion and degradation of and irrigation works; minimizing floods, land- natural habitats and the increasing specia- slides, coastal erosion, and droughts; improving lization of human-managed habitats. Agri- water quality; providing recreational culture has played a major role in the decline of opportunities; filtering excess nutrients; and biodiversity, as it is the human activity that providing essential habitats for economically affects the largest proportion of the earth's important species. They contain genetic mate- surface and is the single biggest user of fresh- rial that can help develop useful products such water worldwide. Its expansion and inten- as pharmaceuticals and improved crops. sification are considered to be major contri- Moreover, many people value ecosystems for butors to loss of habitat and reductions of biodi- aesthetic, moral, or spiritual reasons, even if versity worldwide. Agricultural landscapes, they do not use them. The specific benefits however, can contain considerable biodiversity; provided by any given ecosystem vary indeed, biodiversity often plays a crucial role in substantially. agricultural production. As agricultural pro- For the purposes of this paper, a broad duction continues to rise to meet the growing definition of agriculture as the science or art of demands of the world's population, finding cultivating the soil, producing crops, and ways to minimize conflicts and enhance the raising livestock is adopted. A varying but many complementarities between agriculture often substantial proportion of the benefits of and biodiversity is critical. biodiversity accrue to agriculture itself. Al- Biological diversity, often shortened to though human management has often greatly biodiversity, encompasses the variability among modified natural ecosystems, agricultural acti- living organisms from all sources, including vities remain dependent on many biological terrestrial and aquatic ecosystems and their services. The provision of genes for the deve- ecological complexes. This includes diversity lopment of improved varieties and livestock within species, among species, and of eco- breeds are an important part of these services, systems (Box 1) Biodiversity plays a funda- but far from the only one. Others include crop mental role in sustainable development, and pollination, soil fertility services provided by diverse ecosystems provide many important micro-organisms, and pest control services benefits. They often contain a variety of provided by insects and wildlife. The term economically useful products that can be agrobiodiversity has been coined to describe the harvested or serve as inputs for production important subset of biodiversity that contri- processes. Diverse ecosystems also provide butes to agriculture. Damage to biodiversity economically valuable services, such as often has important implications for agriculture improving water availability for irrigated agri- itself, but at the same time there is substantial 1 2 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Box 1. What is biodiversity? that forms the basis of sustainable agricultural development, as well as numerous other Biodiversity encompasses all species of plants, animals, benefits. This paper seeks to aid in this complex and microorganisms, the genetic variability within task by reviewing current knowledge on the these species, and the ecosystems and ecological processes that they form and which sustain them. It is more than just the number of species, but also includes biodiversity; by analyzing the factors that have variety, representation, and uniqueness. Biodiversity exacerbated conflict between the two and can be measured at three different levels: (a) ecosystem prevented complementarities from being diversity, which describes the variation in the exploited; and by proposing ways in which assemblages of species and their habitats across the conflicts can be reduced and complementarities earth's surface; (b) species diversity, which refers to the enhanced. Specifically, the paper addresses four variety of different species; and (c) genetic diversity, main questions: which refers to genetic variability within a species. Although biodiversity is often measured * What impact do agricultural development simplistically by counting species, the variety of activities have on biodiversity, both in the species is also important. Introducing new, exotic areas actually used for agriculture and species might increase the local species count, but does outside them? not increase overall biodiversity. On the contrary, * How can sustainable uses of biodiversity introducing exotics, disturbing a habitat, or invasion by natural weed species may come at the expense of enhance agricultural development? native species that may be rare, threatened or very * How can economy-wide and agriculture localized in their distribution (endemic), leading to a policies and programs be modified to reduce net loss in overall biodiversity. biodiversity losses? What factors constrain policy adjustments and institutional potential to exploit biodiversity to enhance reforms? agriculture. * What are the tradeoffs between agricultural Growing populations and rising incomes are development objectives and biodiversity increasing the demand for agricultural conservation, and how can they be products. Meeting this need without destroying evaluated? the many benefits provided by biodiversity The conceptual framework used in this study -not least to agriculture itself-will be a major is based on a number of propositions that are challenge. Part of the solution will be to meet embedded in Figure 1. Most decisions affecting agricultural production needs without con- the relationship between agriculture and verting additional areas of already much- biodiversity are made by individual farmers, diminished natural habitats. A more intensive, not by national planners. The incentive knowledge-based agriculture will be required, structure under which farmers and other local and agrobiodiversity is likely to play an resource managers make decisions about important role. Given the very wide area of the conversion of natural habitats is influenced by earth's surface already used for agricultural agriculture and non-agriculture policies, production and the inevitability that it will institutions, and development programs. The increase, part of the solution must lie in retain- resulting agricultural practices will, of course, ing as much biodiversity as possible within affect the level of agricultural production, as agricultural landscapes. Maintaining biodi- well as both on-site and off-site biodiversity. versity is also likely to prove critical to the Changes in the level of biodiversity translate sustainability of agricultural production. into losses or gains to society through changes Planners face a difficult task in reconciling in the level of services provided bybiodiversity, the imperative of increasing agricultural including direct uses such as extractable production without damaging the biodiversity products, valuable ecosystem services, and Introduction 3 Figure 1 Conceptual framework Agricultural sector policies, institutions, Non-agricultural policies, institutions, of ths evcand development programs and development programs agi a piAgricultural practices l Agricultural production a O n-site impacts Off-site impacts on biodiversity on biodiversity I |Loss or gain of biodiversity l Changes to services provided by biodiversity Changes to services opi y aprovided todivrity t a ( "agrobiodvriy" Changes in societal benefits option or existence values. An important subset been mneasured correctly, would have been of these services is directly beneficial to evren lower than they appear. This paper agriculture-changes in their level will affect attempts to show how consideration of biodi- agricultural production. Changes in agri- versity in planning agricultural development cultural production and services influenced by offers different policy prescriptions. biodiversity also lead to changes in societal Chapter 2 begins by discussing the nature of benefits, but these have been largely ignored. In conflicts and complementarities between many cases, resources have not been used agriculture and biodiversity. Although agri- optimally, and societal benefits, if they had 4 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice culture has long depended on and benefited and assessing tradeoffs are also discussed. Few from biodiversity, global trends have increased of these measures will be easy to implement, the conflict between the two, with adverse and are discussed in the last part of the chapter. consequences for both. Chapter 3 attempts to Chapter 5 concludes by examining the role of analyze the causes of conflict by examining the the World Bank and discussing how to main- factors that have driven farmers and other stream biodiversity in the Bank's work. resource managers to actions that degrade This paper should not be interpreted as a biodiversity. These factors include the nature of good practice handbook on mainstreaming markets for services provided by biodiversity, biodiversity in agriculture. Instead, it is a first which often work poorly or not at all, and the step in an intellectual journey that will, as incentives created by goverment policies, indicated by the title, ultimately lead to good Chapter 4 examines the possible responses to practice. Because this topic is so diverse, many the problem, including changes in economy- generalizations and an abundant use of wide and sector policies, efforts to reduce qualifiers are inevitable. market failures, and improvements in research and extension. The problems of valuing benefits 2. Conflicts and Complementarities Between Agriculture and Biodiversity Biodiversity has enabled farming systems to incomes, which lead to higher consumption evolve since agriculture developed some 12,000 and in a shift in consumption towards foods years ago. Traditionally, agricultural pro- higher on the food chain. This pressure has duction systems were based on diverse biolo- often been further aggravated by other factors, gical resources within a variety of managed such as government policies and inequitable landscapes. A majority of agricultural products distribution of land and resources. Biodiversity consumed today evolved through repeated is particularly threatened in countries with experimentation, collection of plant and animal higher population growth rates because of species, and breeding programs dating back more rapid conversion of land to agricultural hundreds-sometimes thousands-of years. In uses and greater demands for wood for fuel recent years, however, unrestricted expansion and building materials. into forests and marginal lands, combined with Production trends. At several times in the overgrazing, urban and industrial growth, postwar period there have been concerns about monocropping, and changes in crop rotation imminent food shortages-in the period patterns and pest management strategies, have immediately following World War II, after the contributed to the erosion of biodiversity both failure of the monsoons in South Asia in the within and outside agricultural landscapes. mid-1960s, and in the early 1970s, when pro- This erosion affects the services biodiversity duction shortfalls in several areas coincided provides to both agriculture and other sectors. with rapid demand expansion and caused agri- cultural prices to skyrocket. In general, Global Trends however, aggregate global production and agri- cultural yields have increased steadily. Over Population growth. The earth's population was 2 the past fifty years, gains in agricultural billion in 1927, had doubled by 1974, and production have come from three sources: area reached 5 billion in 1987 (a billion is 1,000 expansion, increased land-use intensity (prin- million). Over the next 30 years, the population cipally through expanded irrigation), and yield is projected to grow by two-thirds, from the increases (from a combination of improved current 5.5 billion to 8.5 billion, of which about varieties and improved agronomy and animal 7 billion will live in developing nations. This husbandry practices). growth has substantially increased the demand for food, energy, water, health care, sanitation, Extensification. In some parts of the world, and housing, which in turn has induced a expansion of cultivated areas n accuntsran serious conversion of natural habitats for a important part of the growth in agricultural variety of human uses. Demand for agricultural producihon-parcularly in Africa, where yield products has also increased as a result of rising increases have lagged far behind those 5 6 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice achieved in other regions. From 1700 to 1980, agricultural development impose substantial global forests and woodlands declined from an external costs on society at both the national estimated 6.2 billion hectares to 5.1 billion and the global level. With shrinking areas hectares, or nearly 20 percent. Over the same available for agricultural expansion, increasing period, cropland increased from approximately world food production must come from 270 million hectares to 1.5 billion hectares, or sustainable intensification. about 460 percent. A large proportion of global deforestation has been attributed to the Interactions Between Agriculture and expansion of permanent and shifting agri- Biodiversity culture. There are limits to the potential for increasing agricultural production through The interactions between agriculture and additional extensive growth, and that limit has biodiversity are complex and diverse. Because already been reached in many areas. Although production increases require either expanded remaining unconverted areas tend to be very agricultural areas or intensified production marginal for agricultural production, within existing areas, the two broad areas of extensification continues to be a threat to concern are the effects of conversion of natural natural habitats in many areas. habitat to agriculture and the effects of Intensification. Intensification increases the intensification. In each case, effects experienced use of inputs, changes land use, or uses both to on-site (in the areas actually used for agri- increase productivity (output per unit of land). culture) must be distinguished from effects Two broad types of intensification can be experienced off-site (outside the area of land use distinguished: change). * Conventional forms focus on increased use of purchased inputs such as improved seed, Conversion of Natural Habitats agrochemicals, machinery, and external energy and water inputs. The bulk of past Almthough many ecosystems have been and current intensification has taken this modified to some extent by human activities, form. many remain composed largely of native plant * Agroecological forms of intensification blend and animal species and have not had their improved knowledge about agricultural primary ecological functions essentially ecosystems, intercropping, use of diverse modified by human activities; these we shall species, integrated pest management, and refer to as natural habitats. Conversion of natural efficient use of resources. These approaches habitats to agricultural use places a heavy toll represent a small but growing portion of upon biodiversity. Indeed, agricultural expan- intensification efforts. sion is a major contributor to a continuing loss Global agricultural production has of natural habitats and biodiversity. substantially increased, although not all regions On-site effects. Conversion of natural habitat nor all people within any given region have to agricultural use substantially changes the benefited equally. Conventional forecasts for converted area. Naturally-occurring plant the coming decades, however, indicate that species are replaced by a small number of world food production must at least double by introduced species (usually non-native and 2025 to meet the rising demand for food. There identical to crops produced elsewhere), wildlife is not only growing concern over the ability of are displaced, and insects and microorganisms agriculture to meet this demand, but also over are decimated by pesticides. There is also a the long-term sustainability of growth that has change in functions especially in energy and already occurred. Current patterns of nutrient cycling and storage and in water Conflicts and Complementarities Between Agriculture and Biodiversity 7 Figure 2 Comparison of biodiversity in forest and agricultural ecosystems in Borneo Beetles Butterflies Birds 7,000 - 500 200 - 6.000- 400 .6000 5 150 - 4,000 -300 - o _ _ ~~~~~~~~~~~~~~~~~~~~~~100- 2,000 50 E 5(1 - 100 1,000 0 0. 0 Lowland Coconut Rice Lowland Coconut Rice Lowland Coconut Rice Forest Plantation Fields Forest Plantation Fields Forest Plantation Fields Snails Flowering Plants Biotrophic Fungi 60 3,500 10.000 50 - 3,000 --- : ;''.-0C'- C, 8,000 _ 2,500 - 2,000 - 6,000 030- 1,500 4000- 20 - U z ~~~~~~~~~~~~~1,000 10 500 200 0 0- 0- Lowland Coconut Rice Lowland Coconut Rice Lowland Coconut Rice Forest Plantation Fields Forest Plantation Fields Forest Plantation Fields = Indigenous = Endemic Introduced infiltration and storage. Conversion of a given in Sumatra contain as much as half the species area to agriculture, therefore, modifies and divers;ty found in neighboring primary forest substantially reduces the level of biodiversity -substantially more than other agricultural on that piece of land. Figure 2 compares the land-use systems in the area. Conversion of number of species found in forest and primary forest to this type of agroforestry, agricultural eco-systems in Borneo for a range while definitely reducing biodiversity, reduces of organisms. The number of species found in it less than conversion for other uses. agricultural areas is substantially lower than in Off-site effects. The nature of off-site effects forest ecosystems. Moreover, species in agri- depends on the use that is made of the cultural areas include a larger proportion of converted area. Conversion of natural habitat to common species, while species in forest eco- agriculture also induces changes in remaining systems tend to have a higher proportion of natural areas: endemic and indigenous species. * Edge effects. The area at theinterfacebetween All conversion is not equally harmful. For natural and managed land-use systems is example, some traditional agroforestry systems generally modified precisely because it 8 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice serves as an interface. Common opportu- to just natural habitats. Although the levels of nistic species tend to move into these areas, biodiversity in agricultural landscapes are displacing local or endemic plants and substantially lower than in natural habitats, animals. The disturbance created by con- they are not zero and they still provide many version, therefore, reaches far beyond the valuable services, many of which contribute individual piece of converted land. directly to agricultural productivity. Concern * Fragmentation of remaining habitat. The level for biodiversity in an area, therefore, should not of biodiversity is strongly affected by the size cease after it has been converted. of the remaining habitat and its The levels of biodiversity in agricultural connectedness. Conversion of habitat landscapes vary, depending on the nature of frequently results in substantial fragment- specific land-uses within them. Changes in ation of the remaining habitat, thus modi- land-use can further reduce biodiversity within fying the number and types of species it can agricultural landscapes or lead to a relative support. increase, depending on the nature and context * Changing disturbance patterns. Disturbances of the changes. By choosing agricultural practi- such as fires and flooding often play ces appropriately, loss of biodiversity can be important roles in ecosystems. With the minimized. arrival of agriculture, efforts are often made to control these disturbances. On-site effects. Changing production patterns * Changes in water cycles. The substantial can alter the level of biodiversity on individual Changes in water infiltration and storage agricultural fields. For example, increased use which take place in converted areas often of chemicals, specialized production, and affect hydrological patterns in other areas. standardized crop varieties all tend to reduce This problem is compounded when agri- biodiversity. Not all changes are harmful, Cultural use of converted areas involves however. Some agricultural practices, such as irrigation, as discussed below, integrated pest management or polyculture cropping are more environmentally benign Cumulative effects. The individual effects of a than others, and shifting land use toward them given conversion might be minor, but they can will tend to reduce harmful effects on biodi- increase dramatically as they accumulate over versity, allowing local species to survive. In time, over space, or both. Except where a criti- some cases, local biodiversity may increase as cal habitat is affected (for example, a nesting species that had earlier been lost return to the area), conversion of an individual hectare of land site. The extent of the impact, good or bad, will to agriculture may have little effect on obviously depend on the magnitude of the biodiversity. As the area converted to agri- change in use. A large increase in pesticide use, culture increases in proportion to that of for example, will cause greater problems than a natural habitat, indigenous species will be out- smaller one. Likewise, a substantial reduction competed, a process accelerated by any frag- in pesticide use will allow a greater recovery of mentation of the remaining habitat. insect populations than a smaller one. The Unfortunately, the thresholds in this process nature of the impact also depends on the point are still very poorly understood. of departure. Displacing rich agroforestry systems by cattle ranching, for example, lowers Changes Within Agricultural Landscapes biodiversity, while rehabilitating degraded pastures may increase local diversity. Discussion of the effects of agriculture on biodiversity has often focused on conversion of Land use mosaic. The overall level of natural habitat, but biodiversity is not limited biodiversity in agricultural landscapes does not depend solely on individual land uses; the mix Conflicts and Complementarities Between Agriculture and Biodiversity 9 of land uses is also important. Areas dominated water use are often correlated because high by monoculture will tend to have lower biodi- water use increases the likelihood that versity than areas with a rich mosaic of land pesticides and other substances will be uses. carried away. Off-site effects. The impact of agricultural Cumulative effects. Changes in the use of activities upon natural habitats is not confined agricultural landscapes often have important to areas actually converted to agricultural use. cumulative effects. The pesticide-contaminated Other areas are also affected, some directly, runoff from a single field in a given year, for others in more complex ways: example, may be easily diluted in a water- * Run-off. Agricultural run-off (whether course and have only a minor effect. But such waterborne or airborne) carries pesticides, runoff from many farmers is likely to be fertilizers, and sediment into adjacent and significant, especially in the case of persistent downstream areas, affecting ecosystems in a pesticides and those that concentrate in the variety of ways. The danger posed by food chain. dispersion of pesticides into the environment has been well recognized since the publi- Other Forms of Interaction cation of Rachel Carson's Silent Spring. Other substances also cause problems: fertilizers Effects ofsupporting infrastructure. Agriculture is can be toxic to some organisms while more complex than just fields planted to crops encouraging excessive growth of others, and or grazed by livestock. The supporting infra- sediments can increase the turbidity of water structure (including roads, irrigation systems, and modify water flow by clogging water- and housing for farm families) can also courses. Sediment deposition is also a major significantly affect biodiversity: threat to coral reefs near river outlets. In * Infrastructure developments-especially California, a naturally-occurring soil chemi- roads-often encourage opening up new cal carried off in solution from irrigated areas to pioneer farmers. This effect has been fields proved extremely toxic to birds when well documented in Brazil, Belize, Ecuador, it became concentrated in down-stream and southeast Asia. Roads, therefore, have wetlands. been a major contributor to loss of biodi- * Water use. Agricultural activities can also versity resulting from conversion of natural affect areas far off-site through use of inputs areas. other than land, especially water. Mana- * Whether infrastructure leads or follows gement of water for agricultural purposes agricultural development, it also has its own can substantially affect the timing, volume, effects. Roads, for example, convert habitat and velocity of water flow and groundwater to a particularly sterile alternative, produce recharge, thereby altering natural lake, edge effects over large areas, fragment riverine, estuarine, and marine habitats. remaining habitats, and subdivide popu- Adjacent habitats and their associated flora lations. In Bangladesh, construction of roads and fauna can be altered by limited water or and embankments in agricultural areas has saline intrusion as a result of excessive significantly changed local drainage extraction for agriculture. Water use for patterns, which in turn has profoundly agriculture can also affect upstream habitats modified the habitat for floodplain fish. because aquatic systems are often altered far Special role of water. Water deserves particular into their watersheds to regulate down- attention because of the special role it plays in stream water delivery. Any pollution exa- the many interactions between agriculture and cerbates problems-pollution and high biodiversity. The agriculture sector is the single 10 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice biggest and, due to policy distortions and benefits that biodiversity confers on agri- market failures, often the most inefficient user cultural production. or surface and groundwater worldwide. Water is, of course, vital to practically all life forms, Loss of Species but for many species it forms the very basis of their habitat. Changes in water quality and Loss of species has emerged as a significant quantity are likely to significantly affect a large concern. Although data are scarce, the current number of ecosystems. Moreover, flowing loss rate is thought to be substantially higher water can transport effects far from their point than the background rate of extinction. Species of origin, thus activities that affect either the loss is of concern not only because of they are quality or quantity of water can often be felt at valuable in and of themselves, through their great distances. This also complicates detection actual and potential uses, but also because of of problems and formulation of solutions. their role in maintaining properly functioning Imperfect knowledge. Knowledge of how ecosystems that provide valuable services. ecosystems function remains imperfect. Indeed, * Value of individual species. Many species are even estimates of the number of species differ economically useful-they can be harvested by several orders of magnitude. Among known or serve as inputs for production processes. species, many have not been adequately stu- Approximately 80 percent of the developing died and described. Understanding of the long- world's population use plant-based medi- term impacts of agricultural activities on cine for their primary health needs. Despite biological diversity and ecosystem functioning progress in synthetic chemistry and bio- is extremely poor. technology, plants remain an indispensable source of medicines. Many modern medi- Conversion of natural habitats and changes cinesa Mant includin in agricultural landscapes can result in stes fro Mexicany s incluea substantial~~~~ rdcininbovest. Th steroids from Mexican yams (Dioscorea substantial reductions in biodiversity. The cornposita) and an anti-hypertensive drug remainder of this chapter reviews the nature of fompserpentne wo inyrndiae(ruo problems that might result from reduced .oserpentine).oubst n wi th asignfia bidvriy serpentina). Substances with signifcant potential uses in medicine have also been isolated from wild animals. Several species also derive value from the hold they have on the popular imagination or from their Biodiversity generates benefits through the culturalor religiousnrole. many valuable services it provides. These . Keystone species. Some species play a key role services are being undermined or lost as a result of current patterns of agricultural i ecosystem functions. There is growing development, both as a result of continued evidence that the complexity and diversity expansion of agriculture into natural habitats within many ecosystems revolves around exansion a result of changes in land usepractices small number of critical processes mediated and as a result of changes in land use practices by crtia 'kytn'seie oruso in existing agricultural areas. The effects of this loss manifest themselves in many ways: within species). Loss of a keystone species can have farming systems, undermining production, and a dramatically adverse effect on other in natural habitats, undermining the other species, and can even lead to further services provided by biodiversity Ts section extinction. The importance of keystone discusses the effects of agriculture on the species frequently hinges on highly spe- cialized relationships between the keystone overall benefits of biodiversity, while the species and other organisms. For example, following section addresses in more detail the mtefies a r ariable sorcexofprui mature fig trees are a reliable source of fruit Conflicts and Complementarities Between Agriculture and Biodiversity 11 to primates, birds, and other fruit-eating Agriculture affects the level of services vertebrates, particularly during dry spells. In provided by habitats in several ways. The most this case, fig trees are a keystone species obvious, and that which has had the greatest because so many other species depend on effect in terms of area, is through conversion of them for food during droughts. The health of natural ecosystems to agricultural use. This the figs, in turn, depends upon small, highly conversion eliminates many, if not all, of the specialized fig wasps that pollinate fig services provided by a habitat. Effects from flowers. The relationship between the trees agriculture go far beyond the area actually con- and the wasp population, therefore, is verted: adjacent habitats will also be disturbed important to the entire ecosystem's health. because of edge effects and fragmentation, and Agriculture affects the survival of species in these modifications can eliminate or reduce several ways. The most obvious is through services provided by those habitats. Agriculture conversion of habitat, which may lead directly can also eliminate an ecosystem if a keystone to extinction. Even if species survive the species is lost. conversion of part of their habitat, their long- Just as in the case of species, certain eco- term survival prospects might be significantly systems can also serve as keystones, affecting reduced because the remaining habitat is frag- the functioning of many other ecosystems. mented and disturbed. As the area of a natural Mangrove systems are an example of systems habitat is reduced, the number of species it will whose disruption can often have significant support diminishes substantially. The impact of effects on many others. habitat fragmentation is especially severe on specialist species and on species with high area Changes in Ecosystem Stability and Resilience requirements and a low gap-crossing ability. Edge effects further reduce the effectiveness of Species and their environments are connected remaining habitatby promoting conditions that in a complex web. Many ecosystems have favor generalist species over those with more mechanisms that allow them to absorb external specialized habitat requirements. Species may shocks. Although understanding of ecosystem also be threatened by the introduction of toxic resilience remains highly imperfect, a con- agrochemicals or by changes in water regimes sensus is emerging that ecosystem resilience caused by irrigation. depends on the number of alternative species that can 'take over' particular functions. When Loss of Ecosystems ecosystems are diverse, a range of pathways is available for primary production and ecological Although the importance of ecosystems has processes such as water cycling. If one is received less recognition than that of individual damaged or destroyed, an alternative pathway species, they provide valuable services, not the may be used and the ecosystem can continue least of which is habitat for economically functioning at its normal level. If biological important species. In addition, ecosystems diversity is greatly diminished, however, improve the availability of water for irrigated ecosystem stability an resilience will decline. agriculture, industry, or human consumption; Consequently, the services and economic reduce sedimentation of reservoirs, harbors, benefits provided by the ecosystem will be at and irrigation works; minimize floods, land- risk. slides, coastal erosion, and droughts; improve water quality; provide recreational oppor- tunities; and filter excess nutrients. 12 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Biodiversity as an Input to Agriculture Although thousands of plant species are consumed worldwide, far fewer have entered Agriculture is a managed ecosystem. Although world commerce, and a mere hundred-odd human management has often modified the species account for 90 percent of the supply of natural ecosystem substantially, agricultural food crops by weight, calories, protein, and fat activities remain dependent on many formostoftheworld'scountries. Currently just ecosystem services. Biodiversity, therefore, is an three crops-rice, wheat, and maize-account input to agricultural production, and damage to for 60 percent of the calories and 56 percent of biodiversity can have important implications the protein that people derive from plants. As for agriculture itself. As discussed below, improved varieties have been adopted, preventing such loss or damage can become a diversity has eroded. Thousands of traditional means to enhance agricultural production and crop varieties have been eliminated, and many development. have been subsequently lost. In the Philippines, the introduction of high-yielding varieties Genetic Diversityfor Crops and Livestock (HYVs) of rice are thought to have displaced hundreds of traditional varieties. Homo- Agricultural production systems must be genization has also been extensive in high- resilient in order to adjust more readily to value export crops: for instance, nearly all changes in the biophysical or socioeconomic coffee trees in South America are descended environment. Ecosystem resilience within agri- from a single tree from a botanical garden in cultural landscapes can be safeguarded by Holland. incorporating indigenous crops, varieties, and The extent to which introduction of production methods, as well as maintaining improved varieties erodes traditional varieties spatial biodiversity (using relatively large is not well understood. Several studies suggest numbers of species, preferably with significant that modem varieties complement rather than genetic variation within each crop) and replace local varieties, for example, traditional temporal biodiversity (frequently changing basmati rice varieties continue to be planted crops or varieties). alongside HYVs in India and Pakistan. Genetic erosion, particularly the decline and Continued use of traditional varieties, despite loss of domesticated plant varieties and animal their lower yields, might be due to a variety of breeds, has important implications for global factors. Consumers may prefer traditional food security. Specialization within farming tastes or the choice offered by different varieties systems, homogenization of varieties, and within the market. (Taste preferences are not conversion of areas that were home to wild limited to human consumers-Turkish wheat relatives of food crops have led to a decline in farmers commonly grow age-old landraces to genetic diversity. These developments may produce inexpensive feed preferred by their reduce genetic variation of existing crops, and cows, goats, and horses.) Risk-averse farmers eliminate near relatives of commercial species may prefer to plant different varieties to reduce (other species in the same genus) and species the risk from unreliable rains and other that may have become the bases for market hazards. Some traditional varieties may be diversification via new agricultural products. better adapted to various agroecological niches The prevailing models and polices for than improved varieties. In Bangladesh, for agricultural research and development, along example, annual flooding limits the area to with market pressures for standardized which shorter-stalked, improved rice varieties characteristics, have perpetuated this erosion. can be planted. Empirical research is required to determine the extent to which traditional Conflicts and Complementarities Between Agriculture and Biodiversity 13 varieties continue to survive when improved Ireland in the 19th century that caused massive varieties are introduced, and the conditions that starvation; the mealybug infestation in thirty- favor their survival. four African countries in the 1970s and early Livestock are also suffering genetic erosion. 1980s that lowered cassava yields as much as Modem livestock operations have tended to 60 percent; the citrus canker that led to the loss bottleneck biodiversity as they streamline their of 12 million orange and grapefruit trees in the activities by concentrating on a few highly Florida in the mid-1980s; and the Black Siga- productive breeds or strains. The Food and toka, a fungal plague that damaged expansive Agriculture Organization (FAO) estimates that banana plantations in Central America and at least one breed of traditional livestock is lost parts of Africa in recent decades. Increased each week somewhere in the world as farmers investment in research and development focus on new breeds of cattle, pigs, sheep, and related to major food crop varieties may lessen chickens. Sixteen percent of the over 3,800 the impact of such outbreaks-the southern breeds of cattle, water buffalo, goats, pigs, corn leaf blight caused a 15 percent reduction in sheep, horses, and donkeys believed to have United States corn yields in 1970, but alter- existed at the turn of the century have become native varieties planted in subsequent years extinct, and a further 15 percent are threatened. allowed corn yields to rise above pre-1970 These losses weaken breeding programs that levels. could improve livestock hardiness. Insects and fungi are commonly seen as Genetic erosion is troubling because enemies of food production, but more recently advances in modern plant breeding have been many species have been recognized as based on a wide range of genetic material providing valuable services to agroecosystems provided by close relatives of cultivated in addition to pollination. Many insects species, often referred to as landraces. New contribute to biomass as well as nutrient pro- varieties frequently reflect crossing commercial duction and cycling, and are natural enemies to plant species with wild relatives, adaptations to insect pests and diseases of crops. However, changing farming conditions, and responses to this diversity has been seriously eroded in the economic and cultural factors that shape modern agricultural systems. The dependence farmer priorities. The very success of modern on agrochemicals, and particularly the heavy plant breeding, however, now threatens the use and misuse of pesticides, has been largely source of genetic diversity upon which further responsible for this problem, since agro- progress depends. Individual farmers find it chemicals often kill natural enemies and less rewarding to maintain the diverse mixture beneficial insects as well as the target pests. The of landraces developed by their ancestors. reliance on monocultures and decline of natural habitat around farms likewise contributes to Insect and Disease Resistance this serious loss of beneficial insects. Disruption of agroecosystem balance can One of the main problems associated with lead to resurgence of pests and outbreaks of homogenization of varieties is increased new pests, as well as provoking resistance to vulnerability to insect pests and diseases. An pesticides. Farmers often respond to such out- insect pest or disease can be devastating if it breaks by increasing pesticide use or changing infests a uniform crop, especially in large plan- products. Although this response might be tations. History has shown serious economic temporarily effective, in the long run it can lead losses and suffering from relying on to ineffective pest control as well as ecosystem monocultural, uniform varieties. Among the disruption. By 1980, 260 species of agricultural renowned examples are the potato famine of insect pests had developed insecticide-resistant 14 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice strains, and by the early 1990s, the ranks of Agroecosystem Diversity insects resistant to one or more pesticides had swollen to 500 species. This problem, known as The losses of germplasm and diverse crops and the 'pesticide treadmill', has occurred in many livestock are related to broader losses in farm- circumstances; it is particularly well-known for ing systems. Intercropping, polycultures, and causing devastating losses in cotton and banana agroforestry have been displaced by mono- production in Latin America, and rice in south- cultures. Farmers have been encouraged to east Asia. adopt standardized breeds and monocultural In contrast, biological agents have proven to models, eliminating mixed cropping systems be a major component of agroecological forms and landraces. of intensive agriculture, serving to reduce or eliminate the need for pesticides. Thus far, Soil Health some 500 insect species have been deployed worldwide to control insect pests, as part of Diverse and abundant soil organisms help biological control programs, with a further 100 maintain soil fertility and productivity. This released to check weeds. Recently, parasitic diversity is fundamental to soil quality-often wasps were released in West Africa to control called 'soil health'. Small organisms, such as cassava mealybug. In China, researchers found insects and other invertebrates, play a vital role that jumping spiders and wolf spiders are in developing and maintaining healthy soils, effective at controlling insects, so that chemical and help to maintain nutrient cycling, soil insecticides are no longer needed on certain structure, moisture balance, and fertility. For crops. In 1986, Indonesia officially adopted example, mycorrhizae, which are fungi that live integrated pest management as a national in symbiosis with plant roots, are essential for policy, leading to a 70 percent decrease in nutrient and water uptake by plants. national pesticide use. During this same period Many soil management practices in a 10 percent increase in national rice yields was conventional agriculture can damage soil health attributed principally to the deployment of -heavy use of agrochemicals (particularly insect- and disease-resistant varieties and use of pesticides), soil fumigants, and chemical biocontrol agents. fertilizers can destroy or disrupt soil organisms Similarly, breeding commercial species and soil quality. The homogenization of crops with wild relatives has played a critical role in and varieties, together with a decline in use of combating disease and insect pest resistance. manure, crop residues, intercropping, and For example, on the eve of World War II, the cover crops, can reduce soil organisms and Central American banana industry was rescued deplete the soil of natural nutrients, while from imminent destruction caused by Panama intensive tillage practices may disrupt soil disease by genes from a banana plant collected structure. In the long term, all these practices from a botanical garden in Saigon. A non- undermine soil fertility and reduce pro- descript Mexican maize saved the United States ductivity. maize crop from southern corn leaf blight in the early 1970s, and a barley plant from Ethiopia Summary provided a gene that protects the $160 million barley crop of California, as well as the Conversion of natural habitats and changes in Canadian barley crop (all dollar amounts are agricultural landscapes can result in substantial U.S. dollars). reductions in biodiversity. These changes also bring benefits in the form of increased agri- cultural production. In some cases, the benefits Conflicts and Complementarities Between Agriculture and Biodiversity 15 may exceed the costs of biodiversity loss, The following chapter indicates that there making the trade-off a favorable one from a are good reasons to expect that land-use societal perspective. In others, the costs to decisions are usually made without sufficient society resulting from the reduction in attention to the changes they cause in the level biodiversity exceed the benefits obtained from of benefits generated by biodiversity. increased production of food and fibre. 3. Understanding the Causes of Conflict Although biodiversity provides a wide range agricultural production on the converted land of benefits to agriculture and other sectors, agri- over a specific time period. cultural activities often reduce biodiversity. Land-use changes within an agricultural Agricultural planners need to understand the landscape also have costs over and above those driving forces behind biodiversity losses in of actually implementing the change itself, order to address the problem. This chapter some of which will be borne by parties other analyzes why the relationship between than those making decisions. In principle, if the agriculture and biodiversity has been so services provided by biodiversity are valued marked by conflict, and why little progress has accurately and completely, and if prices been made in exploiting the many potential accurately reflect the opportunity costs of all complementarities between the two. In practice, goods and services to society, decisions to this means understanding the incentives change land use would be optimal because driving land-use decisions made by millions of expected benefits from the change would individual farmers. Governments, NGOs, and exceed expected costs. These conditions are not other agents seek to influence these decisions generally fulfilled, as discussed in this chapter. using a variety of tools, but farmers make Many services provided by biodiversity are not decisions in light of their own objectives and valued by those making decisions, leading to constraints. excessive reductions. Moreover, policies and Any decision to change land use should other distortions further affect decisions weigh the benefits obtained from a change through their effects on price signals received against its costs (including the loss of both by farmers. actual and potential benefits). The costs of The chapter begins by reviewing the markets converting an area of natural habitat, for for services provided by biodiversity, many of example, are more than just the cost of clearing which function poorly or not at all. Numerous the land. There are also foregone benefits from other factors that affect decisionmaking are continued use of the land in its present form, discussed next. In particular, a variety of including extractive benefits from harvesting government policies that have had a substantial various products and non-extractive benefits impact on patterns of agricultural development generated by biodiversity on the site. The loss and declining biodiversity by modifying prices of these services will be felt both on-site and and other signals received by decisionmakers. off-site. In addition, there are often costs The final part of the chapter summarizes the imposed on other parties that are not spe- effects of these multiple factors in two stylized cifically related to reduced biodiversity, such as settings, extensification and intensification erosion on cleared areas producing sedi- decisions. mentation downstream. All of these costs must be weighed against the benefits of increased 16 Understanding the Causes of Conflict 17 Market Failures These distinctions are more than theoretical curiosities-they have important effects on the Although biodiversity provides many benefits, design of solutions, as will be shown below. markets for these benefits often either do not Poorly functioning or non-existent markets exist at all or function poorly. This is caused by for many services provided by biodiversity a variety of factors. mean that these services are systematically * Externalities. The benefits of biodiversity undervalued by resource managers. Conse- often do not accrue to those deciding quently, decisions that reduce biodiversity are whether or not to conserve it. Benefits such common. As they evaluate choices, farmers as water filtration, for example, are enjoyed tend not to include the benefits of conserving primarily by water users downstream from biodiversity. They will generally consider on- a wetland. But farmers do not receive any site, extractive benefits because they benefit payments from downstream beneficiaries, so directly, but are much less likely to consider the they are not considered during decision- consequences of their actions on other benefits making. In this case, the cost of lost eco- provided bybiodiversity. system services is an externality that farmers Ovide bytbiodiversity. have no economic incentive to consider. On-site extractive benefits. Natural habitats * Public goods problems. The benefits of services often contain a variety of products that can be provided by biodiversity often accrue to a harvested for consumption or sale, including group-in many cases to the global gums and resin, flowers, fruit, seeds, leaves, community or to very large subsets of it. For fuelwood, game, fish, insects, and mushrooms. example, the genetic information contained Converting an area to agriculture usually elimi- in plants is of interest to all potential users of nates future harvests of most or all of these plant-derived pharmaceuticals. Even though products. As long as they have a clear title to farmers often belong to the group of them, farmers will take this loss into con- potential beneficiaries, the individual sideration when making conversion decisions. incentive to conserve biodiversity is low. As If the extractive benefits are sufficiently high individuals they would enjoy the full and the returns from agriculture sufficiently benefits of conversion (increased agricultural low, they may maintain the area in its natural income), but only bear part of the con- state. But if others have the right or ability to sequences of reduced biodiversity benefits appropriate some of these benefits, the (such as reducing the availability of pharma- incentives for individual farmers to forego ceutcals). Conversely, farmers oftenbear a conversion are reduced. Clear tenure rules disproportionate share of the cost of (including usufruct rights over various cate- conservation (in terms of foregone agri- gories of benefits) can play an important role in culturvalion(inc buter only enjoyafraione o- ensuring that on-site extractive benefits are the resulting benefits. internalized. Even when titles are clear, * Incomplete informatione The s. ecificbenefits of however, extractive benefits alone may be • Inompeteinfrmaton.Thespeificbenfit of insufficient to convince farmers to refrain from biodiversity are often hard to identify, let conversion given the high returs per hectare alone value. Moreover, the effect of any that are often possible from production of given action (such as conversion of a given thalize ops. hectare of land to agriculture or increased specialized crops. use of pesticides) on the benefits of biodi- On-site productivity effects. Potential negative versity is very difficult to predict. Farmers, effects from lost biodiversity, such as the build- therefore, are often unaware of how their up of pests and damage to soil microfauna, can actions might affect the services provided by affect farmers directly by reducing crop yields biodiversity. or increasing costs. One would expect farmers 18 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice to consider these consequences in their crop species with valuable genes, for decisions, but two factors often militate against example, affects all growers of that crop this. First, on-site productivity effects may be worldwide. Just as individual farmers have very difficult for farmers to assess, and so may little incentive to take these effects into consi- not be adequately considered. Links between deration, neither do individual governments. ecosystem functioning and agriculture are often extremely complex and may not be detected Factors Affecting Farmer Incentives until substantial, sometimes irreversible, da- mage has occurred. The effect of pesticides on Given the absence of effective markets for its beneficial insects that prey on insect pests, for benefits, biodiversity tends to be systematically example, may only be detected after years of undervalued by all decisionmakers. Within this heavy pesticide use. Second, even on-site pro- already imperfect setting, however, many other ductivity effects often have a significant public factors also affect decisions-some exacerbate good dimension. Pollinators, for example, are the problem, while others can reduce its effects. not limited to a single field. Any decline in This section discusses the most important such pollinators is likely to be caused by the actions factors, particularly the effects of policies. In of many farmers rather than just one. many countries, patterns of agricultural deve- Off-site effects. Farmers will generally not lopment and biodiversity loss have been have any economic incentive to consider off- heavily influenced by government policies, site effects because these are pure externalities. including those aimed specifically at the agri- (Where the off-site effect is on a public good culture sector, and broader economic policies. consumed by the farmer community, however, These policies affect decisions through their there may be social norms regulating behavior, impact on prices and other signals received by as discussed below.) farmers. Merely announcing or even legislating T ff from a policy change will not affect behavior unless The failure of markets for benefits frm the change is reflected in signals received by biodiversity is also reflected in decisionmaking fre and oh resuce managers. at higher levels. In principle, government g authorities should incorporate their benefits Prices into decisionmaking because many externalities are experienced within their borders. In The prices of purchased goods and services practice, however, government policies have play a crucial role in farmers' decisions and will generally been made with little or no thought to therefore clearly affect biodiversity. The their potential effects on biodiversity. This direction of price effects is often hard to predict failure to consider the benefits of biodiversity in -high prices of agricultural products can make policymaking at the national level has two converting additional land to agriculture more main causes: attractive, for example, but the same high * Incomplete information. The information prices can also make intensified production on available to government authorities has already cultivated land more profitable, redu- often completely ignored non-market bene- cing pressure on natural habitats. Which of fits such as those provided by biodiversity, these effects will dominate in any given case is even for effects that are felt primarily within difficut to pdoic.te problem is fut h the nation. diffcult to predict. The problem IS further • Global externalities. Even at the national complicated because prices are affected by a level, several important benefits of biodi- variety of factors, including government leve,ity several ixtemportan bentseo b - policies, marketing arrangements, infra- versty emai exernaitis beaus thy structure, consumer preferences, and variations affect the global community. Loss of a wild in weather conditions. Understanding the Causes of Conflict 19 Price effects of policies. Many government high costs. Government sponsorship of land policies directly or indirectly affect the prices of settlement is a prime example of a policy agricultural goods and services: fiscal policies that promotes conversion of natural areas, affect the prices of goods through taxes and and is an important source of pressure on subsidies, tariffs increase the price of imported biodiversity in Brazil, Ecuador, and goods directly, and import quotas increase Indonesia. them indirectly. Exchange rate policies affect * Underpricing inputs and encouraging overuse. the value of all tradable commodities, and Many developing country governments have government agencies actively buy and sell subsidized the use of various inputs, partly commodities, often at administratively- to encourage increased agricultural determined prices. Although policy effects on production and partly to support the incentives to conserve biodiversity can be industries producing those inputs. Pesticide difficult to predict in general, three broad sets subsidies, for example, have been common. of policies have often been thought to be In the mid-1980s, Indonesia was spending especially harmful to biodiversity: about $150 million annually on pesticide * Policies that stifle agriculture and discourage subsidies, which led to considerable overuse. intensification. The vast majority of deve- Far from increasing production, this overuse loping countries have until recently had may actually have been harmful because policies that discriminate heavily against targeted insects rapidly developed agriculture. Resources have been extracted resistance, and natural controls were redu- from agriculture in a variety of ways: over- ced. Moreover, high levels of pesticide use valued exchange rates, protection of compe- also caused substantial downstream pollu- ting sectors, price controls, and high direct tion and seriously affected the health of taxation. A sample of eighteen developing farmers using them. In some countries, over- countries found that transfers out of agri- use of pesticides has been further encour- culture averaged 46 percent of agricultural aged by making access to credit conditional GDP during 1960-84. These policies made on their use. The price of irrigation water has agriculture less attractive than other sectors also had serious adverse consequences for of the economy and substantially slowed biodiversity. Throughout the world, irri- agricultural growth. Investments in gation water has typically been priced far improving productivity have been dis- below the cost of supplying it, which has couraged, leaving area expansion as the only inevitably led to overuse. As a result, modi- way to increase agricultural production. fied timing and stream flows have degraded Where reduced returns to agriculture have conditions for aquatic life, a problem which not been matched by increased labor has been exacerbated by pesticides and absorption in other sectors (a common fertilizers carried in return flows. occurrence in developing countries), labor was often shed into marginal areas, thereby Rules and Regulations deepening rural poverty. Poor farmers have been driven to forest frontiers and other Farmers do not exist in a vacuum, but live and marginal lands, increasing pressure on natu- work in a setting where social rules and norms ral environments. of their communities (whether they be villages, * Policies that encourage extensification. In many tribes, producer cooperatives, or neighborhood countries, agricultural policies have expli- associations) have an important influence on citly promoted conversion of natural areas to their decisions. agricultural use with no consideration for the value of biodiversity, often in spite of 20 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Tenure rights in cultivated areas. Insecure land regulated by local communities. An extensive tenure can affect farmer incentives to conserve literature has developed which demonstrates biodiversity in several ways: that local communities can overcome the * Insecure tenure reduces farmer incentives to collective action problems which plague consider long-term productivity effects on common-property resources and to successfully their land, including any long-term effects regulate their use. from damage to biodiversity, and reduces Community norms. When the benefits of farmer incentives to minimize on-site biodiversity and the costs of failing to conserve damage. Improved tenure, however, would it are experienced primarily within commu- not change incentives to protect benefits nities, those communities have strong from biodiversity that accrue off-site. incentives to regulate. Local communities have Because many of these benefits are public significant advantages for monitoring and goods, improving tenure on agricultural enforcing resource-use rules over more distant land may not significantly affect biodi- (and usually less trusted) government organi- versity. zations. Unfortunately, the authority of local * Insecure tenure reduces incentives to communities has often been undermined- intensify agricultural production. Inten- sometimes deliberately-by central govern- sification often requires investment in land ments. Consequently, many common-property improvements or equipment that farmers resources that were once highly regulated by may be unwilling to make if their tenure is local communities have degenerated into open- insecure. Growth may therefore be extensive access resources. rather than intensive, which is much more harmful to biodiversity. Laws. Rules and regulations promulgated by Smeu rt y biodiversity. f l governments can also affect conservation uSomes, such as agoforesitry,endl tonb decisions. Brazilian tax and tenure laws that discouraged byinsecuretenurenbecausethe encouraged clearing of the Amazon are the require fairly long periods to provide a best-known example of laws that had an retuirne finvestments periods to providea adverse effect on biodiversity. Even laws Tn om casestenuse intended to protect biodiversity can sometimes established or increased by clearing land. e have perverse effects. Laws against cutting This has notably been the case in the trees, for example, while intended to protect BailiasnoAazon here it hase rl ine forests, have often reduced incentives to substantial conversion of natural ecosystems. undertake agroforestry practices. In many cases, rules and regulations often prove Tenure and usufruct rights in communal areas. unenforceable, but can affect behavior by Communal areas (including community forests, forcing farmers and others to avoid them (for pastures, and wastelands) are generally example, by bribing enforcers to overlook thought to be open-access resources that any- infractions). one can exploit (an image popularized by Hardin's Tragedy of the Commons). Because Technology habitats in these areas are often less modified than areas used more intensively for agri- Whatever the incentive structure, farmers' culture, they often tend to have higher levels of choices are limited by the characteristics of biodiversity. If resources in communal areas are available technologies-emphasizing research misused, therefore, damage to biodiversity on monoculture has limited the available could be substantial. Evidence is accumulating, options. Modem crop breeding strategies focus however, that use of such areas is often closely on improving a limited number of charac- Understanding the Causes of Conflict 21 teristics such as grain yield, drought tolerance, these products that the farmers can expect to pest resistance, or growth rate. Breeders appropriate for themselves (and hence identify elite breeding lines and then incor- tenure and usufruct rights and social norms); porate controlling genes in subsequent the cost of collecting these products; and the generations. This strategy has been extremely price for which they could sell them (and successful at raising yields, but has also hence marketing arrangements and the narrowed the range of yield-increasing effects of government policies), or their value technologies. Moreover, improved varieties for household consumption. have often been accompanied by prescriptions * Benefits of conversion to agriculture. On the of heavy, prophylactic pesticide use. other side of the ledger, farmers will con- sider the cost of clearing the land (which Stylized Examples of How Biodiversity Is might be partially offset if clearing yields Undervalued salable or usable products such as timber); the value of crop production, which in turn The diverse elements of the incentive frame- depends on achievable yields, available tech- work of farmers have complex effects on nology, cost of inputs and outputs, biodiversity. This section discusses how they marketing arrangements, and the effects of interact in two stylized settings: extensification government policies; and the time available and intensification decisions. for crop production, which might be limited by declining productivity or insecure tenure. Extensification Decisions Biodiversity plays but a minor role in farmer decisions about extensification: through the Converting natural habitats to agricultural use extractable benefits it might provide, and probably has the greatest negative effect on through the possible long-term effects of oiodiversity. damaging it on productivity (an effect which is f Motivation. Several factors might motivate likely to be very difficult to detect). The benefits farmers to consider converting a given piece of all other services provided by biodiversity do of land to agricultural use: producing more not enter into the equation. The many other food to meet the subsistence needs of a factors that affect this decision at different times growing family; replacing land that is illustrate the complexity of the problem and the already farmed because its productivity has difficulty in making reliable predictions about declined through misuse or overuse; or the effect of any specific factor. Price changes simply seizing an opportunity to increase could either encourage or discourage con- income and improve the standard of living. version, depending on the products affected The precise motivation is important: farmers and the magnitude of the change. displaced by declining productivity or who need to meet subsistence requirements will Intensification Decisions likely see tradeoffs between short-term and long-term benefits differently than farmers Intensification decisions can take a variety of motivatedby opportunities forhigher profit. forms. Some decisions to intensify imply a * Benefits of not converting natural habitat. The substantial change in land use practices. benefits that farmers expect to personally Replacing traditional crop varieties with high- receive from leaving an area in its natural yielding Green Revolution varieties and their state will play a significant role in the associated package of purchased inputs is one decision. The magnitude of these benefits example of such a major change. Another depends on what products the area produces example is the introduction of irrigation, which and in what quantities; the proportion of 22 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice enables cultivation of very different crops and Box 2. Intensification and pesticide use in extends the cultivation period into the dry Bangladesh season. In other cases, intensification occurs as the cumulative effect of many decisions, such Agriculture in Bangladesh has intensified in recent as choice of crop and variety, use of retained or decades. High-yielding varieties have been widely purchased seed, and choice of inputs and adopted, expanded irrigation allows double- or triple- quantiti.The range of choices makes it even cropping where only one crop was previously grown, quantities. Th ag fcocsmksi vn and use of purchased inputs has grown rapidly. more difficult to generalize about intensi- Concern is mounting over possible enviromnental fication than extensification. Moreover, the problems from intensification, including damage to consequences of intensification on biodiversity floodplain aquatic ecosystems. also depend significantly on the nature of the As in other Green Revolution countries, pesticide use change and its context. was an integral part of the high-yield variety technology change ~~~~~~~~~~~~package, and use was further encouraged by subsidies. Benefits of intensification. As in the case of Pesticide use grew rapidly in the early 1970s. However, conversion, the benefits that farmers expect after fiscal problems led to subsidies being halved in to personally receive from changes in land 1973-74, and removed entirely in 1978, use fell use play a critical role. In most cases, farmers dramatically. Although total pesticide use has since face a wide range of possible intensification recovered and now exceeds the levels of the early 1970s, options. The relative attractiveness of each per hectare use remains low by regional standards and only 10-20 percent of the area planted to HYV rice is option compared to other options and treated. Farmers consider pesticides expensive and use current land use depends on technical cha- them in a purely reactive way: pesticides are applied racteristics and prices of inputs and outputs. only when pest infestations are detected. Groundwater In turn, prices depend on marketing tests during 1994-95 in areas with high risk of pesticide arrangements and the effects of government contamination found traces in only 13 percent of samples, and most were longer-lived organo-chlorines policies. That agricultural intensification has used in the past rather than the moderately persistent often resulted in damage to biodiversity is and less toxic organo-phosphates in current use. due partly to the nature of the improved Price effects are further illustrated by the different techniques available to farmers and partly pattern of pesticide use on vegetables, where output to the common practice of under-pricing prices are often high. While farmers spray rice-if at certain inputs, such as pesticides and water all-only two or three times a season, it is common to spray vegetables several times a week. A survey of use, whose misuse is especially likely to eggplant producers in one area showed a range of 17 to damage biodiversity. The case of inten- 150 applications per crop cyde. Although farmers sification in Bangladesh (Box 2) illustrates consider pesticides expensive, they believe high levels how differences in input and output prices of use on vegetables are justified by the high returns. can affect the level of pesticide use in inten- These examples illustrate the interactions among the different factors that affect farmer incentives. Despite sive agriculture, an aspect of intensification adopting a technological package that specifically called that is often of considerable concern. for relatively high pesticide use, farmers substantially * Costs of intensification. The key cost for cut back their use once subsidies were removed. On the farmers to consider is that of adopting a new other hand, when high returns from vegetable practice, whether it is an investment or production were perceived to depend on heavy use of acquiring different inputs. Even when pesticides, farmers had no compunction about using damage to biodiversity affects a farmer's them. In neither case did the possibility of damage to damage to biodiversity ~the surrounding ecosystemns-especially to the own long-term productive potential, such as floodplain fisheries that supply much of the protein to damage to pollinators or other beneficial the local poor-enter into the farmer decisions. insects, these costs are unlikely to be considered because they are difficult to identify. Understanding the Causes of Conflict 23 Once again, it is clear that loss of biodiversity (Box 9 below). Even if on-site productivity plays but a minor role in farmer intensification benefits were fully considered, biodiversity decisions. The possible long-term effects of would still be undervalued because damage to biodiversity and agricultural pro- productivity is only a small portion of the ductivity are usually not fully considered benefits. As in the case of extensification, many because these two potential entry points for other factors impinge on intensification evaluation are difficult to identify. Training in decisions, often exacerbating problems by integrated pest management (IPM), however, making use of damaging inputs and activities helps farmers recognize when damage to seem more profitable. biodiversity is likely to harm their productivity 4. Responses to the Problems As discussed in the previous chapter, two sets mental problems, NEAPs have not been parti- of conditions contribute to reduced cularly effective in addressing issues related to biodiversity: non-existent or poorly functioning biodiversity conservation. markets for its many benefits (causing it to be Of the forty-six NEAPs reviewed for this undervalued in land-use decisions), and a study, only twenty-seven mention biodiversity number of exacerbating factors that are fre- loss as a major environmental problem. Of quently driven by inappropriate government these twenty-seven, the majority present little policies. Because these problems have multiple, more than a brief description of the pressures synergistic causes, finding solutions is far from that threaten biodiversity. Four NEAPs (China, easy. This chapter discusses the range of Madagascar, Mauritius, and Sri Lanka) offer a possible responses to biodiversity loss which slightly more advanced analysis of biodiversity agricultural planners might consider. problems, discussing factors such as market Recognizing and Diagnosing Threats to failures, macroeconomic distortions, and pro- iecognizrig and Diagnosg Threats to perty rights issues. Although these documents Biodiversity begin the process of mainstreaming the envi- ronment into national development, they often Recognizing and diagnosing threats to biodi- do not address biodiversity conservation versity is an indispensable first step. National explicitly. Only six NEAPs (Dominican Environmental Action Plans (NEAPs) and Bio- Republic, Ethiopia, Kenya, Malawi, Pakistan, diversity Strategies and Action Plans (BSAPs) and Uganda) offer a high level of analysis, were reviewed to gauge the degree to which including (a) identification and examination of developing countries have identified threats to government sector policies, their shortcomings, biodiversity and diagnosed its causes. and impact upon biodiversity; (b) promotion of National Environmental Action Plans. NEAPs specific policies to generate long-term environ- are intended to provide a framework to mental benefits and trigger necessary structural integrate environmental considerations into changes, including secure land tenure, land country economic and social development rehabilitation, and provision of biodiversity- efforts. NEAPs describe environmental friendly extension services and credits for problems in a country, identify their principal activities; and (c) promotion of sustainable agri- causes (including policy forces behind environ- cultural practices, including intensification to mental degradation), and formulate policies reduce demographic pressure on ecologically and concrete actions to address these problems. fragile lands. The process through which NEAPs are National Biodiversity Strategies and Action formulated is demand-driven, action-oriented, Plans. BSAPs are key vehicles to implement the and based upon local participation, however. Convention on Biological Diversity (CBD). The Despite their mandate to address environ- process of preparing strategies and action plans 24 Responses to the Problems 25 helps countries define priorities for domestic ments for solving problems, and those who actions and international cooperation, as well as have the relevant data and technical expertise. to strengthen institutional capacities and Even when the will and resources to address the full array of convention mandates. examine biodiversity problems are available, BSAPs include (a) a national strategy that ana- efforts have often been stymied by a lack of lyzes the data in the country study, identifies information and by the difficulty of using potential goals and objectives, and examines available information-often collected for very gaps between current reality and the different purposes-to analyze problems. To aspirations espoused in the objectives; and (b) address these constraints, efforts have been an action plan that spells out steps needed to made to develop tools and methodologies for implement the national strategy and addresses rapid assessment of biodiversity problems (Box practical questions about institutional 3) responsibilities, time frames, and necessary resources. At present, BSAPs are less numerous Addressing Policy Distortions than NEAPs. Of the nine that were reviewed, four simply mention pressure factors Given the many failures that characterize threatening biodiversity. Only two address markets for the benefits of biodiversity, biodiversity conservation with the same level of removing policy distortions alone cannot create rigor as the six high-quality NEAPs. perfect efficiency. Reforms to economy-wide Although NEAPs and BSAPs represent an and sectoral policies are nonetheless important important step forward in environmental for several reasons. First, many distortions exa- -management, they have yet to make a cerbate conflicts between agriculture and bio- significant impact on development planning, diversity, and removing them would partially either at the macroeconomic or sectoral policy ease the conflicts. Second, policy reform- level, or as a contribution to reorienting public despite its difficulties-is generally simpler to expenditures. In order to strengthen national implement than improving markets for biodi- strategies, rigorous analysis of environmental versity's services. Third, there is substantial impacts and their economic consequences-for potential for win-win solutions because policy instance, using benefit-cost analysis where distortions that exacerbate damage to biodi- possible, and cost-effectiveness analysis when versity are often also economically inefficient. benefit estimates are not available-must be The fundamental arithmetic of agricultural incorporated. Market-based policy instruments production is that total production equals mean should be promoted as least-cost solutions to yield times area cultivated. Increasing demand selected environmental problems. Such for agricultural products, therefore, can only be instruments frequently allow for win-win met by increasing yields or expanding the area solutions-policies implemented for reasons of under cultivation. Because habitat conversion economic efficiency often lead to improved tends to be much more damaging to biodi- environmental quality. versity than land-use changes in agricultural Identifying priority problems must include landscapes, encouraging intensification could transparent selection criteria, especially related significantly contribute to the preservation of to economic productivity, ecological functions, biodiversity by slowing encroachment into and ecosystem integrity. Finally, environmental natural areas. A basic principle of biodiversity- strategies should be based on consultations friendly policy reforms is to discourage exten- with those who are responsible for environ- sification and encourage intensification. The mental problems, those who are adversely latter can take a number of forms, some of affected, those who control the policy instru- which can be quite harmful to biodiversity, and 26 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Box 3. Rapid assessment of biodiversity policies may lead to growth of marginally pro- fitable cultivation or livestock production in Many regions have scarcely been touched by scientific formerly natural habitats. Such growth has exploration. The threat posed by large-scale changes in often proven unsustainable, even over relati- land use worldwide makes it imperative that methodo- vely short periods. Moreover, the costs of these logies be developed to rapidly assess biodiversity in a ves hort per Meer thetcost These given area, so that conservation priorities can be deve- policies have often been substantial. There are loped. often win-win options, therefore, that both Recently, the Bank developed guidelines for the reduce fiscal drain and alleviate pressure on rapid assessment of biodiversity priorities (RAP or biological resources. There already has been BioRap). Based on methods being adopted for use in substantial progress; for example, Brazil has developing countries by a consortium of Australian curtailed or scaled back most of the policies that scientists, the World Bank, and the GEF, these guide- lines incorporate current ecological theory and best encouraged clearing of the Amazon (Box 4). scientific practices in light of three realities. First, there Encouraging intensification. Intensification has is a limit to the amount of land and water that will be often been discouraged by policies that dis- managed primarily for biodiversity protection; second, criminate heavily against the agriculture sector. creating complete inventories of all species and It is by now well documented that these genotypes is not an achievable goal in the near future; polcies have slowed both agricultural and and thlrd, land and coastal use will continue to change as people use biological resources to meet their needs. economic growth substantially. Policy reforms In light of these realities, the guidelines suggest that: that remove impediments to intensification can * RAP methods have to be explicit, cost-efficient, and help increase agricultural production and also flexible and must attempt to deal with the problem of ease pressure on remaining habitats. In fact, inadequate knowledge. The guidelines enable users to make an explicit statement of different areas' manydevelopigcountrieshavealreadymade relative contribution to overall biodiversity pro- great strides toward liberalizing their econo- tection. Initiatives can then be taken to protect areas mies and removing the worst of the distortions that make a significant contribution. that once afflicted the agriculture sector. At a * Competing land uses pose severe constraints on minimum, policies that discourage intensi- biodiversity protection, and RAP must have fication should be reformed, but the additional maximum flexibility in locating priority areas to faci- of actively intensification is litate negotiation while ensuring protection of unique step encouragig areas. more problematic. The problem may not arise, * RAP data bases must be derived from raw data with however-removing constraints may result in a consistent level of detail across regions, because intensification occurring spontaneously. identifying priority areas requires making Avoiding the pitfalls. It is important to ensure comparisons across regions. The guidelines include methods for designing efficient biological surveys that intensive agricultural systems are is and are accompanied by software tools for collating sustainable. Although intensification is likely information from field surveys and museum to reduce pressure on natural habitats, it may collections, Geographic Information System (GIS) further reduce biodiversity at that location. On- mapping tools for identifying areas of conservation site biodiversity can be reduced because of importance, and a handbook for their application. increased specialization and reliance on a few in many cases undermine their own long-term improved cultivars, while off-site damage can sustainability. There is considerable scope for increase through higher use of chemical ferti- attempts to channel intensification toward more lizers and pesticides. Care must be taken to sustainable forms. avoid intensification policies that are likely to Discouraging extensification. Government damage biodiversity (for example, subsidizing policies have often exacerbated pressures for pesticides and fertilizers and underpricing extensification by providing direct or indirect irrigation water). Here too, there is potential for subsidies to convert natural habitats. These win-win policies because practices that are Responses to the Problems 27 particularly likely to damage biodiversity, such Box 4. Policy responses to deforestation in as pesticide use, have often been artificially the Amazon encouraged by government policies. The example of Bangladesh in Box 2 above illu- In the past, general tax policies, land allocation rules, strates the degree to which simply removing and operation of the credit system in Brazil all distortions can avoid some of the worst forms contributed to accelerating deforestation of the Amazon of intensification. Regulatory reform can ofteri rain forest-the largest repository of biodiversity in the of intensification. Regulatory reform can often world. Numerous provisions of the tax laws encouraged help avoid the pitfalls of intensification. Some conversion of forests into agriculture or pasture, an developing countries still allow use of highly- effect reinforced by the availability of subsidized credit. toxic, persistent pesticides, while in others these Rules for allocation of federal land specifically are banned but the ban is not enforced. encouraged deforestation because the security of claims was determined by land clearing. Although the basic outlines of biodiversity- Partly as a result of such policies, the population of friendly macroeconomic and agricultural Brazil's Amazonian states doubled to about 9 million policies are clear, the details are often difficult people between 1970 and 1990. About 100,000 square to work out. Only a limited amount of detailed kilometers of native forest were converted to pasture, analytical work is available that has directly and additional areas were converted to crop production. (The actual extent of deforestation is the subject of some traced the impact of overall agricultural policies dispute due to different definitions, data sources, on biodiversity. Moreover, it is often difficult to measurement techniques, and assumed baseline predict the consequences of specific policy conditions.) measures, and each situation needs to be In recent years, policy and institutional changes have examined individually. This problem will enhanced environmental protection, including (a) become increasingl import.t as limaking fiscal incentives for investing in the Amazon become increasingly importantasliberregion subject to environmental conditions; (b) progresses and the most obvious sources of abandoning or scaling back road building and colo- inefficiencies (such as pesticide subsidies) are nization projects; (c) mandating environmental impact removed. Once these easy gains have been studies for all public works and private investments; (d) made, further gains will become more difficult curtailing agricultural tax exemptions; and (e) reducing to achieve. More detailed analytical work on or eliminating price and credit subsidies for farming and ranching. the impact of specific policy changes on These positive policy developments reflect a reali- agricultural activities and biodiversity will be zation that the short-term benefits of past policies were needed, as well as close monitoring of the outweighed by long-term costs. They also require that effects of any actions. implementation be supported by adequate resources. An increasingly vocal population in the Amazon region, however, seeks modem infrastructure for an improved standard of living, and the federal government faces the difficult task of balancing those concerns with the Those who make decisions that affect broader agenda of environmental conservation. biodiversity (primarily farmers) receive few of the benefits of conservation but bear most of the costs. Improved markets for the services perty rights and develop new income oppor- provided by biodiversity would internalize tunities dependent on biodiversity conservation their benefits in farmer management decisions, (for example, ecotourism), and mechanisms to thus shrinking the divergence between return royalties from genetic material collected privately-optimal and socially-optimal in an area to local communities. Understanding behavior. Considerable efforts have been made the structure of incentives is vital to the success in recent years to find mechanisms that will of these schemes. provide farmers with greater benefits from Environmental taxes. Given the potential for biodiversity. These include efforts to revise pro- inputs such as pesticides to cause external 28 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice damage, there is ample justification to go gers if they have the ability to enforce rules and beyond avoiding subsidies and actively tax the incentive to do so. In cases where an such inputs. Such environmental (green) taxes important part of the costs of not conserving substitute for the missing markets for the biodiversity are borne by local communities, damages and lead farmers to internalize these giving them authority to regulate the use of costs in their decisionmaking. While environ- habitats in their areas can significantly improve mental taxes have received considerable conservation. Community involvement in theoretical attention, practical experience re- forestry management in Nepal, for example, mains scarce. Establishing the proper level for appears to have substantially improved the such taxes will be difficult. Because the damage conditions of forested areas. Such authority, caused by pesticides varies substantially from however, will not increase incentives to avoid place to place (application upstream from a externalities that are not experienced at the natural habitat, for example, is likely to cause local level. more damage than application downstream), Decentralization. The potential role for the appropriate level of the tax would also vary, communities in safeguarding biodiversity at the Implementing such a variable tax would clearly local level is becoming more important as many be impractical, thus much work remains to be countries decentralize authority and respon- done in this field. sibility to lower levels of government. De- Secure property or usufruct rights. In principle, centralization can offer a more fine-tuned assigning property rights to biodiversity or its approach to environmental and natural re- services would ensure that they are used source management problems, assuming appropriately. Owners would demand appropriate investments in the institutional compensation from beneficiaries and protect capacity of lower levels of government. Local their property from damage. Enforcing such governments, thanks to their proximity to envi- rights is impractical, however, because most of ronmental and natural resource problems, are the services provided by biodiversity are public probably better placed to design a least-cost goods. A more realistic alternative is to ensure way to achieve a given reduction in damage, that property or usufruct rights on biologically monitor compliance with regulations and diverse sites are secure, which would often conditions attached to subsidies, and adjust substantially change the way these sites are policies in light of experience. Local govern- exploited. To the extent that biodiversity pro- ments, however, will only consider externalities vides extractive benefits or on-site productivity that are felt primarily within their jurisdiction. benefits, secure rights to these benefits will Since the impact of damage to biodiversity make conservation more attractive and may tilt is unlikely to respect administrative boun- the balance toward conservation. Property daries, local governments will often have less rights to individual pieces of land, however, are incentive to address externalities than higher- not a panacea for biodiversity conservation level goverments. Thus, while decentralization because they do not increase incentives to avoid might increase the chances that spatially- externalities. In cases where insecure tenure limited externalities will be addressed prevents investments in intensification, appropriately, it may decrease the chances that increasing tenure security could reduce damage externalities with broader consequences will be to biodiversity by reducing pressures to convert dealt with appropriately. Transfers from the additional natural habitats to agricultural central government would be needed to production. motivate local governments to address exter- Regulation by local communities. Local nality problems that reach beyond their communities can be effective resource mana- boundaries. Careful design of incentives and Responses to the Problems 29 conditions attached to such grants would be Box 5. Compensating farmers for intellectual needed because the local government would property rights to biological information become the central government's agent in implementing policies designed to reduce Areas with high levels of biodiversity are likely to externalities. contain biological information valuable for the development of products such as pharmaceuticals and Alternative benefit capture mechanisms. Several improved crops. Historically, the biological samples different mechanisms have been proposed in an used to search for useful products have generally been effort to encourage farmers and local commu- extracted without compensation. The rosy periwinkle, nifies to conserve biodiversity: from which drugs for childhood lymphocytic leukemia were developed, is an often cited as an example of * Intellectual property rights. The genetic biochemical discoveries that have failed to benefit information embodied in plant and animal source countries (in this case, Madagascar). There have species has hitherto been gathered by been recent efforts to develop mechanisms to researchers without compensating local compensate source countries and local populations. populations. As a result, local populations These mechanisms provide one avenue for local have had no incentive to conserve these populations to benefit frombiodiversity, thus increasing their incentives to conserve it. potentially valuable resources. To remedy The agreement signed between pharmaceutical this problem, there have been efforts to company Merck & Company and the Costa Rican devise mechanisms through which local National Biodiversity Institute (INBio) in 1991 is often populations might be compensated for cited as a model for such schemes. Under the genetic information collected in their areas, agreement, INBio supplied Merck with samples from plants, insects, and microorganisms collected in Costa either with up-front payments or royalties Rica's protected forests, which Merck has the right to from sales of products developed from that use in the creation of new pharmaceutical products. information (Box 5). Merck paid INBio $1 million for the rights to analyze * Ecotourism Ecotourism has often been and use these samples, as well as $180,000 in equipment proposed as a way to generate income from for chemical extraction, and training in species identification and collection to Costa Rican scientists natural habitats wi u dand field collectors. If the search yields commercially the promise has thus far outstripped reality. viable products, Merck will pay INBio royalties on Managing tourism in ways that do not de- sales. Ten percent of the initial $1 million fee and 50 grade natural habitats is far from easy. percent of any royalty were to be invested in Possible detrimental effects from ecotourism biodiversity conservation through Costa Rica's Ministry include environmental stress due to over- of Natural Resources. crowding, changes in behavior ofwil e, Despite widespread positive reaction to the crowding, changes in behavior or wldlfle, agreement, it has had few followers to date. Whether erosion of trails and beaches, over-develop- these mechanisms provide sufficient incentive to local ment of local infrastructure, and increased people to conserve potentially valuable biodiversity noise, litter, or resource extraction. Ensuring remains to be demonstrated. The incentives may not be that the benefits of ecotourism are received important enough to make a difference in practice. Even by local communities so that the desired where the benefits are potentially significant, implementation details are likely to play an important incentive effect will be realized is also role. For example, the Merck-INBio agreement did not proving difficult. Moreover, benefits may be provide any explicit compensation to local populations, offset in the eyes of local communities by the only indirect compensation through investments by the intrusion of tourists, greater income inequa- Ministry of Natural Resources and INBio. lity within and between communities, increased pollution, and rising local prices. * Subsidies. Because the benefits of biodi- the costs of providing them. Conservation versity are often public goods, there is a trust funds are one mechanism through logical case for subsidies to those who bear which the global community may com- 30 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Box 6. Trust funds: compensating local the danger of creating perverse incentives, communities for biodiversity conservation and high transaction costs. All these mechanisms have a role to play. Their Conservation trust funds are an innovative mechanism applicability and ease of implementation will through which the global community may compensate clearly vary substantially from case to case. local communities for protection of critical biological diversity. They have the potential to provide long- Given the nature of biodiversity, it will likely term, sustained financing to meet the recurring costs of prove impossible to create functioning markets operating and maintaining protected areas, and to for all its benefits, but in many cases it will not ensure sustainable use of natural resources through be necessary to achieve complete markets. Any community support. Examples of conservation trust change that increases the benefits farmers funds include: Uganda's Mgahinga and Bwindi Impenetrable Forest receive from biodiversity will reduce Conservation Trust was established in 1994 to protect biodiversity losses. It will not always be two of the most biologically diverse forests in East necessary for farmers to appropriate all or even Africa. These two areas have suffered significant most of the benefits provided by biodiversity ecological losses from timber harvesting and agri- -all that is necessary is for the benefits they cultural encroachment. The Trust finances park management, research, and community-based deve- receive to offset the benefits of actions that lopment programs that are compatible with damage it. Efforts to create markets or market conservation. Specific benefits from the Trust include substitutes for at least some of the benefits of (a) lowered probability of drastic reductions or loss of biodiversity are likely to have an important endemic, rare, or endangered species; (b) continued effect on the overall conservation of biodi- provision of environmental services; (c) long-term economic gains for local communities by ensuring that versity, especially if negative policy effects have forest resources are used in a sustainable manner; and been alleviated through reforms. (d) economic gains through development of compa- tible and complementary economic enterprises, such as Improving Research and Extension gorilla watching. Bhutan's Trust Fund for Environmental Conservation Even if markets work and incentives are not was created to help conserve the nations forests and preserve rich biological diversity that has come under distorted by government interventions, farmer pressure from population growth and economic choices are limited by the technologies development. The Trust is financing a national system available to them. Some technologies already of protected areas and the development of institutional exist which could-often at little or no cost to capacity and human resources to manage the system. farmers-help conserve and enhance biodi- It is overseen by a board of directors that indudes members of the Royal Government of Bhutan, UNDP, versity i agricultural landscapes (Box 7). Incor- and intemational NGOs. porating them in land-use planning and exten- It is too early to determine whether trust funds will sion programs would mark an important step play a significant role in promoting the conservation forward. In many cases, however, research is and sustainable use of biological diversity. There are, needed on improved technologies that reduce however, promising signs: policy reforms when the conflicts and enhance complementarities Trust was established included legislation aimed at protecting natural habitats, and there have been between agriculture and biodiversity. Such successes in sensitizing local communities to the need technologies are also likely to substantially for conservation efforts. improve the sustainability of agricultural deve- lopment. pensate local communities for the protection New approaches to research. New approaches of critical biodiversity (Box 6).This solution to agricultural research are being tested around encounters all the usual problems with the world. Many of these approaches empha- subsidies, including difficulties in setting size better exploitation and management of appropriate levels and ensuring compliance, biological resources than has prevailed in the Responses to the Problems 31 past. Instead of reliance on an arsenal of potent Box 7. How can agriculture promote chemicals to improve soil fertility and thwart biodiversity conservation? the attacks of insects and disease-causing organisms, agricultural research is increasingly Agriculture practices and management systems can turning to biological assets, including mani- often make important contributions to biodiversity pulation of genes and predators of insect pests. conservation. Some examples of methods that maintain pulation ops and predatorso that pey biodiversity within the context of agriculture activities When crops and livestock are bred so that they include: can thrive under the incessant onslaught of Measures to avoid the unnecessary threats to biodiversity: challenges to productivity, agricultural produ- * Using Integrated Pest Management (IPM; see Box 9) ction systems become more resilient. to protect wildlife and natural enemies of crop pests from unnecessary damage. Improved inputs. The threat posed by * Using more diversified practices such as polyculture, agricultural inputs has been lowered. Newer crop rotations, understorey agriculture, or agro- pesticides, for example, are generally much less forestry whenever possible. persistent, have a narrower spectrum, tend to * Conserving riparian forests and ecosystems, and have lower concentrations of active ingredients, other biodiversity corridors. and are otnesti.huMeasures to manage landscape structure and functioning: and are often less toxic. The use of biopesicides * Retaining uncultivated strips within holdings as and granular insecticides has also been habitat for weedy relatives of crop plants-especially increasing. Granular formulations are less likely in areas known to be centers of origin or diversity for to contaminate water than foliar insecticides, crop plants. and thus are less likely to cause damage far * Maintaining disturbance patterns whenever and from their area of application. Many newer wherever possible. Fire and floods, for example, can play an important role in biodiversity conservation. insecticides also pose lower health risks to farm * Planning the arrangement of crop plots. Patches, workers and their families. Despite these corridors, and barriers can be located and oriented to positive trends, many problems persist. Older, minimize species loss and promote dispersion of more toxic, and more persistent pesticides are certain species or, on the contrary, to act as natural still widely used in many developing countries. barriers to avoid the dispersion of harmful Improved registration procedures designed to populations. Measures to conserve the genetic pool: ensure pesticide safety have at times perversely * Supporting traditional agriculture systems, especially slowed adoption of less damaging newer those employing polyculture methods and/or agro- pesticides; meanwhile, already-certified pesti- forestry patterns. cides, which tend to be more damaging, con- *Using native woody species when establishing tinue to be used. windbreaks or woodlots. Fertilizer use has also improved. Recom- mended application rates were once based on Need for a new agricultural research and average conditions, but excess nutrients would development model. Although incorporating often contaminate ground and surface water. In natural resource management and on-farm recent years, fertilizer recommendations have trials in research has progressed at inter- increasingly been based on more site-specific national, regional, and national agricultural conditions. In some countries, including Kenya research centers, much more needs to be done. and Indonesia, soil testing programs for indivi- A new research paradigm that systematically dual farms determine fertilizer requirements. incorporates agrobiodiversity is already evolv- Despite these improvements, there is still consi- ing in different parts of the world. In contrast to derable scope to develop inputs that are less the old research model that emphasized environmentally damaging and increase the maximizing output and tended to be use of less-damaging inputs through appro- commodity-focused, the new vision for agricul- priate extension strategies. tural research adopts a more holistic approach. 32 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice It is more sensitive to environmental concerns Box 8. Elements of a new agricultural while still addressing the need to boost yields research and development model and incomes (Box 8). Integrated Pest Mana- gement (IPM) is one of the most successful Participatory approach. On-farm research should not be examples of how biodiversity can contribute to limited to demonstrations on farmer fields. It should agriculture (Box 9). include experimental work that involves farmers and other stakeholders in design of models from the Farmers will not adopt new, less harmful inception of the study. Farmers should be actively technologies if returns are not at least as high as involved in selecting desirable plants for their growing those of current practices. Just as research that conditions. emphasized increased yield without regard to Use ofindigenous knowledge. Patterns of natural resource use by indigenous people can provide important cost was often spurned by farmers, research information for more appropriate agricultural research that addresses environmental problems but and development efforts. does not offer either higher output or lower Greater attention to lesser-known crops and animals. Many costs is also unlikely to be widely adopted. The traditional varieties and breeds are particularly well- attraction of IPM for farmers, for example, does suited to difficult environments but have been neglected notlie in its benefits to biodiversity, but rather by research. They should be included in a broadened research effort. Relatively minor investments in some in its lower costs and higher yields. neglected crops and livestock breeds could generate As new techniques, inputs, and information significant returns. emerge that promote biodiversity-friendly Research on new crops and livestock. Scope exists for new crops and livestock to fill specialty market and agricultural production, it is important that this environmental niches. information reach farmers. Training extension Greater sensitivity to the value of a mosaic of land uses. Even workers to effectively promote adoption of land uses that are desirable from a biodiversity these technologies by farmers is essential, and viewpoint can be promoted too far. Biodiversity in it may also be necessary to involve alternative managed landscapes is often best served by promoting extension channels such as non-governmental a mixture of land uses that provides varied habitats for organizationchannes NGsuchr prvate n govern ntrl plants and wildlife. organizations (NGOs) or private sector distri- More diverse habitats within land use systems. Diverse butors. habitats on the landscape create more niches for plants and wildlife, some of which control insect pests. More Complementary Conservation Measures diverse habitats, including managed ones, also promote more efficient use of nutrients and create microclimates that can help buffer crops from inclement weather. In many countries, the pressure to expand Greater reliance on recycling of organic matter. Crop agricultutre is so great, at least in the short term, rotations, incorporating livestock or green manure, and that adopting an appropriate policy framework no-till or minimum-till farming help sustain diverse soil and addressing market failures might only microorganisms important in nutrient recycling. succeed in slowing the rate of expansion. Determine the critical number of breeds for conservation Complementary conservation measures are purposes. DNA analysis of genetic variation can be used to accentuate the genetic spacing between breeds, and necessary to ensure that such expansion causes to identify those breeds that are significantly different the least possible damage. or unique from others. Protecting and enhancing critical habitats. Research on genetic components of adaptation in livestock. A Although some degree of overall agricultural better understanding of traits such as tickresistance and use of body stores would aid breeding efforts and likely expansion might be unavoidable, the extent of underscore the importance of safeguarding so-called damage to biodiversity can be contained by minor breeds. protecting key areas within the growing agri- cultural landscape. Within any region, certain off points, riparian areas, and wetlands, for areas tend to play a particularly important role example, are all especially important for eco- in the ecosystem. Nesting sites, migration stop- system functions. Converting them to agri- Responses to the Problems 33 Box 9. Integrated Pest Management: land-use tradeoffs. Planting a buffer strip or biodiversity and ecological knowledge integrating a habitat strip takes up space that at work could be used for growing crops. Restricting land use in some areas may prevent farmers Integrated pest management (IPM) techniques seek to from making the most profitable use of that exploit ecological knowledge to control insects. Rather land. In these situations, varying benefits and than attacking insects with insecticides, IPM costs need to be weighed and compared with techniques attempt to manipulate the crop environment by taking advantage of its biodiversity to available public and private resources. If most reduce the chances of damage. The actual techniques of the benefits are external, farmers are unlikely vary depending on the crop and the ecosystem, but to adopt them unless they receive some form of they typically include use of insect-resistant varieties, compensation. changes to planting times and other operations to Restoring biodiversity. In degraded and exploit insect life cycle, encouragement (or introduction) of natural enemies (biocontrol agents), unproductive agricultural areas, vegetation can and mixed cropping. Pesticide use, if any, is limited to be restored either deliberately by replanting reacting to particularly high levels of infestation, rather native flora or passively by allowing the area to than prophylactic applications. Where possible, use of reseed itself. Recent research has shown that biopesticides is encouraged. With such techniques, many countries have achieved substantial reductions l t o d in pesticide use without adverse effects on yields; ficantly increase the otherwise slow rate of indeed, yields have often increased. natural forest succession by ameliorating un- Indonesia adopted IPM as a national policy in 1986 favorable soil and understory conditions and following recognition that pesticide use was attracting seed-dispersing wildlife. Large areas threatening rice production. In addition to adopting suffering from alkalinity and salinity have been IPM, Indonesia banned fifty-seven broad-spectrum reclaimed as productive agricultural lands insecticides and phased out subsidies on pesticides. The IPM program includes field classes on ecology, through the use of regenerative agricultural crop husbandry, physiology, insect feeding habits, and practices. Selection among these options population dynamics. As a result of these efforts, depends on the nature of degradation, conser- pesticide use had fallen 70 percent nationally within 5 vation goals, and available resources. These years, while rice yields increased 10 percent. Higher strategies often can achieve multiple functions yields and lower production costs have increased - c farmer profits. -helping conservation by alleviating pressure on critical habitat areas and stabilizing the agricultural landscape. The regrowth process is culture canbe particularly damaging, so direct usually quite slow, and experience with such intervention may be warranted. Targeted strategies is relatively limited, but successful actions can also be undertaken to improve implementation has been demonstrated in biodiversity within an agricultural landscape, various areas (such as in orchard systems in for example corridors can be preserved California), and hasbeenpracticed traditionally between remaining habitats to facilitate the as well. To the extent that these activities are movement of species, remnants of natural undertaken in degraded areas, their oppor- habitats can be protected and expanded, and tunity cost is often low. nearby natural habitats can be buffered by limiting land use in adjacent areas to uses such Ex situ conservation. Saving seeds and other as forestry or agroforestry that minimize edge plant material away from their original sites is effects and enhance the retention of ecological ex situ conservation. This genetic material is functionality, stored in genebanks under controlled con- ditions, and is available for breeding. Although Although the integration of habitat strategies this system has been very successful since it can serve multiple goals, they often involve was pioneered by the Russian botanist N. 34 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Box 10. Global plan of action for may preserve individual species, it does conservation and sustainable use of nothing to safeguard other valuable aspects of plant genetic resources biodiversity such as ecosystem services, and halts further evolution of the conserved species. Plant genetic resources for food and agriculture Nonetheless, for species threatened by the provide the biological basis for world food security. imminent destruction of their habitat, ex situ The conservation and sustainable utilization of these conservation might be the only viable resources is key to improving agricultural productivity alternative. and sustainability, thereby contributing to national development, food security, and poverty alleviation. In situ conservation. While measures to Properly managed, plant genetic resources need never improve the usefulness of ex situ collections of be depleted, for there is no inherent incompatibility between conservation and utilization. However, these a resources are seriously threatened. The chief warranted, considerable attention is now focu- contemporary cause of the loss of plant genetic sed on in situ conservation of plant and animal resources has been the spread of modem, commercial genetic resources. In contrast to ex situ agriculture. The largely unintended consequence of conservation, in situ conservation preserves not the introduction of new varieties of crops has been the replacement-and loss-of traditional, highly variable thindivi lse but alsoith prcs by farmer varieties. The lack of capacity to conserve and which they evolve through crossig with wild optimally utilize these resources undermines the quest and weedy relatives. Major conceptual and for food security and sustainable development. practical obstacles remain to the imple- Responding to this crisis, the Global Plan of Action mentation of effective in situ conservation for the Conservation and Sustainable Utilization of programs. Plant Genetic Resources for Food and Agriculture, adopted by representatives of 150 countries in Leipzig, Germany in June 1996, provides the impetus and Valuing Benefits and Assessing Tradeoffs framework for putting conservation and utilization activities on a solid foundation. The Global Plan of When market failures are reduced, the need for Action, addressing priority actions at the local, valuation of the benefits of biodiversity by national, regional and international level, deals with (1) government agencies will diminish because the in situ conservation and development; (2) ex situ incentives for farmers and other resource conservation; (3) utilization of plant genetic resources; and (4) capacity building for conservation and managers to consider the benefits in their own sustainable utilization. Assessments, intermediate and decisions will improve. In combination with long-term objectives, strategic approaches to reforms to reduce the extent of policy-induced implement priorities, human and institutional distortions, the divergence between privately- capabilities, and research priorities are identified in optimal and socially-optimal resource use will each of the four main section. be smaller. Nonetheless, it will often be necessary to attempt to evaluate the benefits of Vavilov in the early twentieth century, it is not boiersity because po te the mit in withut robems.Maitaiing eneank is biodiversity, because protecting them might in wxpensitho espro alem Mintdeveopining g une ries, some instances conflict with other objectives. expensive, especially in developing countries, Likewise, activities to restore biodiversity and use of the material is limited by the degree benefis reqtoanlyis. to which its properties have been catalogued. In several cases, valuable germplasm Valuing the benefits of biodiversity remains collections have been lost because of neglect, in- intrinsically difficult. Many ecological sufficient or inadequate storage facilities, relationships are uncertain, and it is difficult to funding limitations, and wars. Often, stored assign value to goods and services because material may not be viable. In recent years, many do not enter markets. Nonetheless issues of access to germplasm have become techniques exist to estimate the value of at least increasingly contentious. While this approach some of the benefits generated by biodiversity Responses to the Problems 35 and the effects of agricultural activities upon insufficiently detailed to allow identification of them. When damage to biodiversity reduces specific problems in particular areas. agricultural productivity, the change in output Second, prioritization will also require a also reduces benefits. When other services are damage assessment and an estimation of the affected, replacement costs can often be used; likely returns to interventions so that scarce for example, the cost of treating water to resources can be used optimally. The state of replace the water filtration service provided by the art in this field remains poor, but lack of wetlands can be used as a measure of its information should not lead to paralysis. In benefit. many instances, sufficient information is Where there are threats of serious or available to both justify intervention and in- irreversible damage, the lack of full scientific dicate the nature of the required response. It is certainty should not be used as a reason to important that the effects of any intervention postpone cost-effective measures designed to be closely monitored to ensure their success prevent environmental degradation. and guard against unintended side effects, and to build up the data base so that future Implementation Problems interventions can be better designed. Although biodiversity provides clear Mainstreaming biodiversity in agriculture will benefits to agriculture, these benefits are only create a series of possible responses to the beginning to be recognized. In many cases, problems to be solved, and each response is biodiversity is still perceived as the preser- likely to confront important implementation vation of butterflies and panda bears and problems. First, the institutional capacity to dismissed as a rich-country extravagance. implement responses is often limited. Second, Although this attitude is slowly changing as many of the responses are likely to have evidence mounts of the importance of distributional consequences that could trigger biodiversity to agricultural development, signi- either opposition or have undesirable equity ficant educational work remains. Improved implications. This section discusses these information will provide sectoral planners with problems. concrete evidence of the relationship between Institutional Problems agriculture and biodiversity in their own countries. The educational effort should not be limited to agriculture sector planners, because Improved government policies that affect many of problems originate in non-agriculture biodiversity will require more and better in- sector policies (Chapter 3). In many developing formation to be provided to policymakers. countries, coordination between different Currently, the bulk of information available to ministries remains difficult. policymakers completely ignores non-market Agriculture sector planners are likely to face benefits such as those provided by biodiversity. resistance from planners in other sectors to First, information is required on the extent and reforms needed to improve the relationship nature of damage to biodiversity and the con- between agriculture and biodiversity. Similarly, sequences of this damage; however, monitoring agriculture sector planners are also likely to the state of biodiversity and the pressure on it have few incentives to implement measures is often limited. In addition, there is almost no that help conserve non-agriculture-related monitoring in agricultural landscapes, and services provided by biodiversity if doing so what little monitoring exists is generally limited threatens to reduce the performance of their to natural habitats. Monitoring is also often sector. In Kenya, for example, it is difficult to reconcile increasing water use in agriculture 36 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice with the needs of wildlife, even though wildlife services that biodiversity provides. The distri- clearly benefit the nation through tourism. bution of these benefits is likely to be uneven, Where conserving biodiversity encounters however; there may well be individuals or tradeoffs with agriculture-specific objectives, a groups that stand to lose even as society as a strong voice is needed to press the cause of whole benefits. conservation, along with a higher authority to Ensuring that participants obtain positive adjudicate disputes. Even then the global benefits is likely to prove vital to successful dimensions of the problem will not be given implementation of any response, particularly in adequate consideration unless they are brought an agricultural context, because adoption is to the table by external agents such as the ultimately in the hands of individual farmers. Global Environment Facility (GEF). Some Groups that stand to lose, however, may go NGOs have also played an important role by beyond non-cooperation and actively oppose arranging debt for nature swaps. necessary reforms. Both farmers and pesticide Tensions may arise between governments as industry workers, for example, are likely to social planners and governments as economic oppose lifting pesticide subsidies even though agents. As social planners, governments might removing them is clearly a win-win policy from realize that conserving biodiversity is necessary a societal perspective. Opposition to reform of for sustainable development and improving pesticide regulation and subsidization policies incentives to local farmers is important for this by industrial groups in India has meant that objective. But as economic agents they often many toxic, persistent pesticides continue to be attempt to appropriate revenue from eco- produced and used in that country. tourism or bioprospecting for their own uses Distributional consequences may also matter rather than allowing it to flow to local even if the affected groups are unable to oppose communities. reform. Some might be poor, for example, and there will be equity concerns over Distributional Issues implementing policies that affect them adversely even if the net societal gains are Closer attention to biodiversity inagricultureis positive. If possible, policies should be likely to increase societal benefits at both the designed to minimize such effects, but to the national and global levels through increased extent that this is not possible, compensation and more sustainable agricultural production, schemes might be necessary. and preservation of the many other valuable 5. The Challenge for the World Bank As the world's population continues to grow, on the complementarities between agriculture agricultural production must meet the rising and biodiversity. The relevance and importance demand for food. Current patterns diminish of each element, summarized below, will vary the biodiversity that provides many valuable from country to country, and strategies and services to agriculture and other sectors, and actions to implement them must be designed in undermine long-term sustainability of the context of country and local conditions. agricultural production. The conversion of * First, conflicts and complementarities natural habitats to agricultural use is of parti- between biodiversity conservation and agri- cular concern because it substantially reduces culture need to be recognized and diag- biodiversity. Intensification can generally be nosed. To ensure that this happens, biodi- beneficial if it reduces pressures to expand versity considerations must be included on cultivated areas, but it can also be harmful. the economic development agenda by (a) Meeting the imperative of increasing agri- improving the effectiveness of national cultural production in a sustainable way while strategic planning frameworks, including conserving and prudently using biodiversity is National Environmental Action Plans a major challenge. (NEAPs) and Biodiversity Strategy and This chapter summarizes the strategic Action Plans (BSAPs); (b) heightening responses to this challenge and the constraints awareness at technical and political levels of that mitigate against such responses as they the conflicts, complementarities, and trade- have been outlined in the previous chapters. offs between biodiversity conservation and The Bank's role in helping its developing agricultural development; and (c) broad- country partners to remove such constraints ening agriculture sector planning objectives and effectively mainstream biodiversity in and processes to embrace biodiversity agricultural development is examined-first, in conservation. the context of the Bank's country assistance * Second, policy distortions that exacerbate strategies; second, in relation to agriculture pressure on biodiversity must be addressed sector work; and finally, exploring implications through macroeconomic and sectoral policy for the agricultural lending program. reforms that benefit biodiversity while improving economic efficiency (win-win Mainstreaming at the Country Level policies). Also, cross-sectoral policies such as those regulating land use should be The preceding chapter outlined a framework consistent with biodiversity conservation to embrace biodiversity conservation as agri- objectives. cultural development policies and programs are * Third, the effects of extensive market failures formulated. This framework includes five must be reduced to the extent possible. The strategic elements to reduce conflicts and build broad instruments available include (a) using green taxes; (b) enhancing security of 37 38 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice property or usufruct rights; (c) empowering technical understanding on the part of local communities to manage natural agricultural planners about how agriculture resources, including biodiversity; and (d) depends on biodiversity and the relative finding effective means to return the benefits isolation that characterizes sectoral and of biodiversity to local communities. environmental planning in many countries * Fourth, research and extension must be re- are contributing factors. oriented to provide more and better * Few proven methods. Implementation of technical options to farmers who use policies is impeded by the lack of proven biodiversity as an input to enhance modalities and instruments to address agricultural productivity on a sustainable biodiversity loss problems. Although a wide basis. range of tools and mechanisms have been * Finally, recognizing that the previous four proposed, experience with their use remains elements may still leave critical aspects of limited. biodiversity vulnerable to the actions of humans, targeted interventions for The Role of the Bank conservation will be required to protect critical natural habitats-either in the Bank support to its developing country agricultural landscape or through ex situ partners for mainstreaming biodiversity in means. agricultural development is essential for several Mainstreaming biodiversity in agricultural reasons. First, conservation of biodiversity is development means addressing these five linked to sustainable agricultural development, strategic elements. The preceding chapters have and for many developing countries agricultural identified a number of factors that tend to production is the main engine of economic encumber such mainstreaming and prevent or growth. Second, the Bank is committed to restrain biodiversity-friendly policy reforms, helping client governments meet their institutional adjustments, or other interventions obligations under the Convention for Biological designed to conserve biodiversity in the Diversity (CBD). These obligations call for agricultural landscape. These factors fall into conservation and sustainable use of biodi- three broad categories: versity to be integrated into the plans, * Lack of information. A weak information base programs, and policies for sectors such as agri- and a generally poor understanding of the culture, fisheries, and forestry, and for cross- nature of effects make problem assessment sectoral planning. Finally, as an implementing and identification of appropriate and specific agency for the Global Environment Facility responses difficult. These deficiencies (GEF), the interim financing mechanism for the prevent awareness of conflicts between agri- CBD, the Bank has a direct responsibility to cultural development and biodiversity help client governments mainstream biodi- conservation. This lack of awareness versity in development. undermines the sense of urgency for high- The Bank's commitment to its developing level policy decisions to support biodiversity country partners in this effort was spelled out conservation. in the 1995 report Mainstreaming Biodiversity in * Tradition. The traditional focus on sectoral Development: A World Bank Assistance Strategy production and employment objectives and for Implementing the Convention on Biological institutional barriers to cross-sectoral Diversity. The agenda for action was broadly coordination have effectively prevented defined to (a) help 'green' country assistance inclusion of biodiversity conservation in strategies, (b) help countries design biodi- agricultural development planning. Lack of versity-friendly sector policies and programs, The Challengefor the World Bank 39 (c) facilitate cross-sectoral planning for Box 11. Greening Country Assistance biodiversity conservation, (d) ensure that Bank Strategies: toward good practice policies and practices help countries main- stream biodiversity, and (e) foster and expand Mexico. Loss of globally significant biodiversity, eco- strategic partnerships in support of biodiversity system destruction, soil erosion, and aquifer depletion conservation. The first two of these tasks are threaten Mexico's development. The Government's strategy to address these problems encompasses two directly relevant to mainstreaming biodiversity mutually reinforcing sets of initiatives: a multisectoral conservation in agricultural development. They approach in subregions with high-priority environ- are elaborated below. mental problems, and a national approach in specific sectors. The 1994 CAS supports this strategy through Biodiversity Conservation and Country analytical work, institutional development, and lending Assistance Strategies operations. Strengthening environmental institutions and extending on-going initiatives to state and munici- pal agencies are part of the strategy. Specific sector The Bank's Country Assistance Strategies efforts include promoting sustainable use of forests and (CASs) have traditionally focused on macro- other natural resources and harnessing private sector economic performance, including the questions initiatives through incentives for environmental pro- of external debt management and domestic tection. Public participation in creating and enforcing resource mobilization. More recently, environmental policy is supported, as well as a NEAP. Brazil. The 1995 CAS aims to strengthen federal and addressing constraints to development of key state environmental protection agencies; help the fede- sectors of the economy has assumed greater ral government reduce its involvement and redefine its importance. Notwithstanding these develop- role in agriculture through projects that decentralize ments, sectoral issues generally remain less extension services to the municipal level; collaborate than fully integrated into the diagnosis or the with farmer associations on effective on-farm and microbasin activities; and support management of competing water uses through water markets, small- An increasing emphasis on environmentally scale irrigation, and environmentally-sound water use sustainable development and environmental practices. Specific reforms proposed in the CAS include and natural resources management is under- (a) reducing tax rates for native forests relative to rates for agricultural land; (b) establishing separate rules and pinning Bank assistance. While the purpose of regulations for native and plantation forests; (c) de- and audience for a CAS does not allow exten- volving most implementation and enforcement of sive treatment of biodiversity conservation environmental protection to the states; (d) providing issues, it is important that they are given due incentives to collect environmental user fees; and (e) attention when closely linked to the overall improving identification and demarcation indigenous reserves, and strengthening protection of these reserves goals of development assistance delivery. In to reduce encroachment and illegal exploitation. recent CASs for Mexico, Brazil, and Nepal, for Nepal. The 1996 CAS notes that economic and social example, biodiversity conservation as part of a development requires efficient and sustainable manage- broader set of environmental management ment of Nepal's biological and natural resources, parti- priorities has been integrated into the analysis cularly agriculture and forestry. In response to Nepalese of development constraints and the formulation Government priorities, the Bank will help design and maintain an environmental policy framework, with of the Bank's assistance strategy (Box 11). accompanying sectoral work to include water and land Most of the Bank's client governments are resource management strategies. The CAS details a parties to the Convention on Biological lending program to promote sustainable watershed pro- Diversity, and the Bank, together with other tection, forest management, and soil conservation, with biodiversity management as an explicit component. donor agencies and partners, has an obligation Lending operations will not only address biodiversity to help these governments meet their obli- conservation in protected areas, but also mainstream gations under the Convention. The Bank has a biodiversity management in agriculture and forestry special obligation because it is one of three sector work. 40 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Box 12. The Global Environment Facility generation of domestic benefits (extractive and non-extractive) and resource management. On The Global Environment Facility (GEF) provides such grounds alone, as well as the commitment funding to achieve agreed global environmental under the CBD, biodiversity conservation benefits. Biodiversity conservation is one of the GEF's would in many cases warrant explicit consi- four 'focal areas.' The GEF's objectives in this area include biodiversity conservation, sustainable use of its deration and attention in Bank assistance components, and the fair and equitable sharing of the strategies: benefits of genetic resources. GEF-financed * Prudent use and conservation of biodiversity biodiversity activities are guided by several strategic in cases such as the Galapagos Islands in considerations, including: Ecuador or the savannahs of Kenya and * integration of conservation and sustainable use of biodiversity within national and regional sustainable Tanzania amount to management of an im- development plans and policies; portant part of the national capital stock. The * protection and sustainable management of Bank's strategy for helping countries design ecosystems through targeted and cost-effective and implement plans for rational use and interventions; conservation of such assets should form an * integration of efforts to achieve global benefits in the essential part of the CAS. This means area of land degradation, primarily desertification supporting policy reforms and priority and deforestation; and * development of a project portfolio that encompasses investments that help to conserve biodi- representative ecosystems of global biodiversity versity, including measures to minimize significance. threats to these assets from agricultural Enabling activities in biodiversity are a basic development. building block of GEF assistance to countries, The challenge of biodiversity conservation preparing the foundation and implementation of demands attention in CASs for countries in effective responses required to achieve objectives of the CBD. These activities assist recipient countries to which maintenance of a diverse biological develop national strategies, plans, or programs base is critical for sustainable agricultural referred to in Article 6 of the CBD, and to identify growth. This is particularly relevant for the components of biodiversity together with processes drought-affected countries of sub-Saharan and activities likely to have significant adverse impacts and Sahelian Africa, where diversified plant on conservation and sustainable use of biodiversity, pursuant to Article 7 of the CBD. Countries thus genetic resources and farming systems form enabled have the ability to formulate and direct part of a strategy aimed at reducing risks for sectoral and economy-wide programs to address global farmers, and for the countries in the Indo- environmental problems through a cost-effective Gangetic basin, where a narrow base of approach within the context of national sustainable biodiversity is constraining sustainable development efforts. growth in rice and wheat production systems. implementing agencies for the Global Two conditions must be satisfied for CASs Environment Facility (Box 12). The CAS process to appropriately address biodiversity con- and document are the logical context for servation: determining the Bank's role in providing such . The Bank's economic and sector work needs assistance. to be strengthened to address, where The Bank's current operational policy appropriate, biodiversity conservation as an establishes that, where appropriate, global envi- explicit development objective. Such work is ronment issues and the role of the GEF should underway as collaborative exercises in- be addressed in the CAS (BP 2.11). Global envi- volving client government institutions and ronment issues such as conservation of biodi- other partners in the delivery of develop- versity, however, have important links to ment assistance. To address this need, the The Challengefor the World Bank 41 Bank's ESD Vice Presidency has launched Box 13. The Global Overlays Program the Global Overlays Program (Box 13). * There must be a strong commitment and Background. A 'global overlay' adds a new dimension deliberate process to integrate into the CASs to traditional sector economic planning by analyzing strategic recommendations that emerge from environmental impacts and opportunities to internalize strelevantegictoral and cross-sectoralstudies global externalities. From a sectoral perspective it poses relevant sectoral and cross-sectoral studies the question: How and at what cost would policies, and assessments, whether prepared by the institutions, and investment priorities change if global Bank, country institutions or jointly. This environmental objectives were added to conventional includes agriculture sector reviews, natural sectoral objectives? resource management studies, country Objectives and keyfeatures. The Global Overlays Program, enviro*nental strategy papers, as well as launched by the Bank in partnership with bilateral documents emerging from the country's donors and NGOs, seeks to internalize global externa- documents emergmng from the country's lities into national environmental planning and the own strategic planning in relevant areas Bank's sector work, operations, and dialogue with (including agriculture development plans, governments and partners. It is an iterative process, national environmental action plans, combining conceptual studies, reviews of state-of-the- biodiversity strategies, and action plans). art techniques for measuring and mitigating global externalities, and testing these concepts and tools through country-level studies as a means of identifying Biodiversity Conservation and Agriculture good practices for country planners and Bank task Sector Work managers. The results will help guide national actions to reduce greenhouse gas (GHG) emissions, conserve As part of the Bank's traditional sector work, biodiversity, and protect international waters. agriculture sector reviews (ASRs) have con- Implementation status. Accomplishments by mid-1996 include Good Practice Guidelines for GHG Overlays centrated on policyv reform and sector ivest- and a GHG Assessment Handbook. In addition, two ment priorities designed to increase agri- GHG overlays have been completed, for Argentina and cultural production, secure rural employment, Mexico, and planning for a number of biodiversity and promote food security, and reduce poverty. The agricultural sector overlays is underway. The Bank is Bank's agriculture sector work has recently seeking partnerships withbilateral donor organizations, F GEF, NGOs, and foundations to support the program. changed. Frst,whatusedtobeBank-prepared The proposed activities of the Global Overlays sector reports based on the work of visiting Program for fiscal 1997-99 include: Bank missions are now sector assess-ments and * Analytical base. The Bank will improve its planning studies undertaken in collaboration understanding of the technical, economic, and social with government institutions and other local relationships among relevant sector activities and partners. Second, the traditional all-encom- global environment effects and examine how these are affected by policies, especially in biodiversity passing sector-wide review iS gradually being conservation and international waters protection. replaced by more narrowly focused studies and * Sector studies. About twenty global overlay analyses, addressing subsectors or issues of applications in climate change mitigation, biodi- special relevance to country planning or versity conservation, and international waters pro- decisionmaking for agricultural develop-ment. tection will be undertaken, involving the energy, In this process, natural resource mana-gement transport, agriculture, and forestry sectors * Good practiceguidelines. Guidelines for global overlays studies (including food production, land use in climate change, biodiversity conservation, and and tenure, forestry development, rural international waters protection will be prepared, employment, or rural infrastructure) have building on monitoring of the above activities. become increasingly common. The above activities will be planned and implemented with the help of a Global Overlay Advisory Group, Current practices. Coverage of biodiversity which includes representatives from NGOs, the issues within the Bank's agriculture sector work scientific community, bilateral donor agencies, and varies significantly. A 1995 review conducted developing-country governments. 42 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice Figure 3 Key steps in mainstreaming biodiversity in World Bank sector work Develop Execute specific Derive good conceptual 1country sector practice Monitor framework and studies guidelines implementation tools As a contrast, ASRs from several biodi- by the Banks Agriculture and Natural Re- versity-rich nations, including Madagascar sources Department found that biodiversity (Agricultural Strategy Note 1994), Ethiopia was addressed within the context of agri- (Agriculture: A Strategyfor Growth: Agriculture cultural development in only seven of twenty- Sector Review 1987) and Papua New Guinea four ASRs undertaken between 1987 and 1995. (Revitalizing Agriculture: Issues and Options 1992) Several of these studies attempted to make little effort to analyze obvious conflicts examine the relationship of agricultural deve- between agriculture and biodiversity. These lopment to biodiversity conservation, and some studies also do not address the importance of demonstrated good practices. The Ecuador biodiversity within the agricultural production Agricultural Sector Review 1993 focused on systems of these countries. enabling factors leading to biodiversity loss Integrating biodiversity issues in agriculture such as distortionary macroeconomic policies, sector work. The Bank needs to strengthen its cross-sectoral mispricing, and insecure land agriculture sector work to effectively help deve- tenure. The review recommends removing loping country partners mainstream biodi- energy subsidies (which produced a distortion versity conservation in planning for this sector. favoring frontier expansion), strengthenng In a local context, Bank staff interacting with property rights in forested areas, and imposing country sector planners need to be able to land taxes on agricultural lands to promote address four questions that this paper has agricultural intensification. While the ASR for attempted to answer from a general per- Brazil did not address biodiversity, this topic is spective: covered in another report, The Management of . How do agricultural development activities in Agriculture, Rural Development, and Natural the sector or subsector affect biodiversity? Resources 1994. This study recognizes the . How can the sustainable use of biodiversity abundance of biodiversity and diverse eco- enhance agricultural development? systems in Brazil, and addresses policy measu- * How can government policies and programs be res aimed at conserving biodiversity (such as adjusted to reduce biodiversity loss? reducing subsidized credits to the livestock . What are the costs of such adjustments? And sector and liberalizing trade in agricultural how can tradeoffs be evaluated? products, thereby increasing the profitability of The development of good practices begins farming in existing agricultural areas relative to with forming a suitable conceptual framework frontier areas). It also makes specific recom- to help analyze the relationship between agri- mendations about land allocation and titling, cultural development (including policies, management of protected areas, and taxation of programs, and practices) and biodiversity con- land in native forests and cleared areas. servation (Figure 3). It also depends on the availability of analytical tools and methods to The Challengefor the World Bank 43 measure effects of biodiversity losses or gains. ment standpoint, and identification of Most important, country-sector studies will associated incremental costs. help test the conceptual framework, refine * Third, using the results of the previous two analytical tools and methods, and prepare a set activities, prepare good practice guidelines of good practice guidelines to incorporate bio- for global overlays for use by country diversity conservation objectives into planners, sector practitioners, and Bank staff. agriculture sector work and operations. Overcoming institutional constraints to These tasks form part of ESD's broader mainstreaming at the country level. The inte- initiative to promote mainstreaming global gration of biodiversity conservation objectives environment objectives in Bank operations. into sectoral planning at the country level faces This initiative, which is coordinated under the significant institutional constraints. Agriculture Global Overlay Program involves ESD depart- sector planners and technical staff are typically ments working with the Bank's regional depart- not accustomed to working with their counter- ments (Box 13). To help conserve biodiversity, parts in environmental ministries and vice the Global Overlay Program envisions the versa. Senior officials in ministries of agri- following three activities over the next three culture tend to view environmental consi- years: derations and conservation priorities as stand- * First, based upon relevant studies and ing in the way of urgent crop and livestock country experience, propose an analytical production programs. Their colleagues in framework to examine effects of sector charge of environmental management are often activities and policies on biodiversity. Initial perceived as overly conservationist, and in work will focus on agricultural development many cases are isolated from the sectoral (the present study) and extend to forestry development agenda. That most NEAPs have management and land degradation control. been prepared with little input and ownership * Second, building upon ongoing or recent from sectoral ministries may explain their sector reviews, evaluate up to eight global ineffectiveness in bringing about the changes overlay applications (such as country necessary change to achieve environmentally studies) involving agriculture and forestry sustainable development. sectors in collaboration with developing The Bank, working with its partners in country governments and institutions. development, must be prepared to help its ENV/AGR, together with regional Sector client governments lower or overcome the Operations Divisions, are currently barriers to integrating the agendas for sectoral discussing suitable countries in which over- development and environmental management, lays may begin during early fiscal 1997. The including biodiversity conservation. The Bank country studies would initially focus on the can help in these ways: complementarity between sector develop- First, helping to prepare environmental and ment and global environment objectives (the biodiversity conservation strategies or action 'no regrets' options). They would identify plans should secure the actve partcipation opportunities to capture additional global of sectoral interests. A centrally-placed environment benefits through markets for coordination mechanism that has govern- such benefits (limited as such markets may metalsupport fromthehighest level should be), or international resource transfers be included. (through institutions such as GEF). They * Second, by supporting these strategic should provide policy prescriptions, sector national frameworks covering biodiversity investment priorities from global environ- conservation, the Bank should emphasize the importance of (a) assigning respon- 44 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice sibilities to individual sectors of the eco- needs of communities neighboring the nomy to adopt and implement policies and protected areas. Examples of projects that programs that address identified priorities reflect this approach include Uganda's Bwindi for biodiversity conservation; (b) identifying Impenetrable National Park and Mgahinga Gorilla win-win policy reforms; and (c) establishing National Park Conservation Project 1995 and a system to monitor the execution of such India's West Bengal Forestry Project 1992. responsibilities by sectoral ministries or A third generation of projects now needs to agencies. effectively promote biodiversity outside tra- Third, Bank support for country planning ditional protected areas. The development of studies designed to integrate biodiversity such projects should follow naturally by conservation into agriculture sector planning successfully mainstreaming biodiversity con- should emphasize cross-sectoral and broad- servation at the sectoral level, and should based participation, embracing not only manifest itself in two main ways-agricultural government agencies, but also the local NGO lending operations should include biodiversity and scientific communities. Support should conservation among project objectives, and the be designed to foster capacity building design of agricultural projects should reflect the rather than producing a study report. use of environmental assessment (EA) to select International NGOs working with local the most cost-effective means of supporting NGOs may be positioned to facilitate such a biodiversity. process. Biodiversity conservation in agricultural Biodiversity and the Lending Portfolio lending. A review of the recent agriculture and related natural resource management portfolio The first generation of biodiversity projects in carried out by the Bank's Agriculture and the Bank's portfolio, dating back to the 1970s, Natural Resources Department concluded that helped Government institutions establish and while only a limited number of projects manage national parks and protected areas. At explicitly address biodiversity conservation, the the time, management meant protecting biodi- proportion of biodiversity-friendly agricultural versity by keeping all other activities out and projects is increasing. relying on penalties (enforcement) as the Of 402 agricultural projects (IBRD loans or incentive. Bank support for these purposes IDA credits) approved between 1988 and 1995, came either in the form of free-standing projects 10 percent recognized biodiversity as an or as components of forestry or other relevant explicit objective with activities that typically operations. A recent example of this type of supported strengthening existing protected project is Madagascar's Forest Management area management and national strategic Project 1988. planning for biodiversity conservation. While It soon became clear that this approach was such activities are important, they often have unsustainable from most perspectives. As a few direct functional links to agricultural result, a second generation of biodiversity development activities of the project. In such projects recognized the need to involve local cases, the agricultural project serves more as a communities in management and sharing convenient vehicle to support biodiversity benefits. These projects recognized that the management activities than as a means to in- sustainability of any regime to protect tegratebiodiversityconservationinagricultura biodiversity in national parks depends largely development. on how effectively it reduces the pressure There are important exceptions, however, generated by the production and consumption including agricultural projects that have been The Challengefor the World Bank 45 designed explicitly to promote biodiversity Box 14. Capturing the convergence between conservation, either through activities that conservation and agricultural interests otherwise would not have been undertaken, or projects that have exploited important Indonesia: Fifteenth Irrigation Project (1980). In North synergies between biodiversity conservation Sulawesi, agricultural expansion threatened forests and agricultural development. The experience surrounding the Toraut River, an area of globally of Bank projects promoting agricultural significant biodiversity. A convergence of conservation ofBak roecs rogind al and agricultural interests led to the establishment of the development in North Sulawesi in Indonesia 300,000-hectare Dumoga-Bone National Park as part of and in the Mahaweli Ganga Basin in Sri Lanka a $54 million irrigation scheme to promote agricultural are successful attempts to capture such development, especially irrigated rice, in the Dumoga synergies (Box 14). While these projects date valley. The project secured protection of the forested back more than ten years, they contain catchment watersheds, ensuring low sedimentation important lessons. loads in the Toraut River and extending the life of important lessons. newly-constructed irrigation canals. As a result annual It is important to note that the approach of rice production was expected to increase by 46,000 tons, these projects is distinctly different from that of while creation of the national park served to safeguard agrculurl. pojetswhich, consistent with many plants and animals endemic to Sulawesi. agricultural projects whlch, conslstent wltn Sri Lanka: Fourth Mahaweli Ganga Development Project Bank operational policy, establish new pro- (1984). The Mahaweli river basin is biologically rich, tected areas to compensate for natural habitats with over ninety endemic plants and animals and or wildlands that would be lost or threatened as important populations of large mammals. Agricultural part of the project's proposed activities. expansion threatened natural habitats in the area, displacing and crowding wildlife onto smaller, For the overwhelming majority (320) of the fragmented land parcels. The project met the dual agricultural projects approved during 1988-95, purposes of harnessing Sri Lanka's largest river for biodiversity conservation did not figure as an irrigation purposes while establishing new protected objective. Many of these have potentially areas with forest reserves and jungle corridors to harmful effects on biodiversity by promoting buffegurd mnigration routes for wildlife. In addition buffer zones were created with land-use restrictions to pesticide use, encouraging monoculture crops, reduce conflicts between wildlife and local and constructing irrigation canals through communities. This system of integrated land use and nature reserves. The share of such projects in conservation areas provides important benefits to local the agricultural portfolio is, however, declining communities, including flood control, reduced -in the 1988 portfolio one out of every three downstream sedimentation, bank stabilization, reduced -m the recent onk revew) tnre human and wildlife conflicts, less wildlife damage to welas judged (by the recent Bank review) to have crops, conservation of fisheries, conservation of genetic potentially harmful effects on biodiversity, but resources and medicinal plants, local employment this ratio dropped to one out of fifteen for opportunities, and opportunities for research and projects approved in 1995. education. An increasing number of agriculture sector projects have direct or indirect positive effects bench terracing, and reducing erosive mecha- on biodiversity through agroforestry, nization; and Indonesia's Integrated Pest Mana- integrated pest management, natural resources gement Project 1993, which strengthens and management, crop rotation, and genetic re- expands the use of IPM through farmer edu- sources preservation. Examples of such projects cation, field investigation, links with research include Burundi's Muyinga Agriculture Project and extension systems, and strengthening the 1988, which includes soil conservation efforts regulatory framework for pesticides. such as the creation of protection forests, on- Within the group of projects that indirectly farm erosion control, and agroforestry; benefits biodiversity conservation are those that Algeria's Agriculture Research and Extension increase productivity either through restoration Project 1990, which promotes contour plowing, 46 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice processes or successful intensification, and Project 1973, where early intervention to inte- thereby reduce the pressures on adjacent grate environmental concerns led to altering biodiversity-rich lands or natural habitats. A the design and routing of an irrigation canal to good example is India's Uttar Pradesh Sodic avoid important wildlife migration routes. Lands Reclamation Project 1993. This project includes investments in land reclamation (such An Agendafor the Future as improved drainage networks) while promo- ting soil management practices (including The challenges for the Bank in mainstreaming reduced tillage systems, increased use of biodiversity at the project level are fourfold: natural fertilizers, and retention of organic * Deepen the implementation of 'do no harm' matter), and diversifying cropping systems strategies in the design of agricultural (incorporating food crops, salt-tolerant fruit projects by effective use of environmental trees, and high-value aromatic plants) to further assessments, and by systematically applying arrest expansion of sodic lands. the Bank's policy on compensatory actions Biodiversity-friendly agricultural projects for natural habitats threatened by proposed are the result of more systematic and effective project activities. use of environmental assessments and an * Promote identification of synergies between increased awareness of unsustainable forms of biodiversity conservation and agricultural agricultural production. Good practice development, and build them into project examples of environmental assessments of design. agricultural projects include Brazil's Agri- ' Broaden the use of environmental assess- cultural Credit Project 1988, which recognizes the ments as a tool to mainstream biodiversity divergence between private and social benefits in agriculture. This includes using sectoral of services provided by biodiversity; Bolivia's and regional environmental assessments to Agro-Export Development Program 1992, which screen both public investment programs and addresses safeguards needed to prevent private upstream project design options against the enterprises from adversely affecting the envi- objectives of biodiversity conservation. ronment; Uruguay's Irrigation Development and * Use agricultural investment and sector NaturalResourceManagementProject 1994, which adjustment operations appropriately as identifies relevant environmental issues related instruments to support policy reform, insti- to irrigation projects such as soil degradation, tutional capacity, and awareness of main- water contamination, and related effects on streaming biodiversity in agricultural biodiversity; and Sudan's Rahad Irrigation development. Glossary Agrobiodiversity - Plant and animal genetic Habitat - An environment of a particular kind. resources, soil organisms, insects, and other flora and fauna in agroecosystems, as well as In situ conservation - Genetic resource elements of natural habitats that pertain to maintenance in the field. agricultural production. Intensification - Increasing the use of inputs Agroecosystem - An ecosystem managed for and/or changing land use so as to increase agricultural use. productivity (output per unit of land). Biodiversity - Short for biological diversity; it Keystone species - A species that affects the encompasses the variability among living survival and abundance of many other species organisms from all sources, including, inter alia, in an ecosystem. terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are Landraces - Geographically or ecologically part; this includes diversity within species, distinctive populations of plants and animals between species and of ecosystems. which are conspicuously diverse in their genetic composition. Ecosystem - The organisms living in a particular part of the environment and the Natural habitat - Land and water areas where physical part of the environment that impinges (i) the ecosystems' biological communities are on them. formed largely by native plants and animal species, and (ii) human activity has not Endemic - Species or race native to a particular essentially modified the area's primary region and found only there. ecological functions. Ex situ conservation - Conservation of plant Off-site effects - Effects of a land use change genetic material in genebanks under controlled that are felt outside the area on which the land conditions, away from the site at which it use change is carried out. normally grows. On-site effects - Effects of a land use change Extensification - Increasing agricultural that are felt within the specific area on which production by expanding the area under the land use change is carried out. cultivation. 47 Bibliographic review This section provides suggestions for addi- Biodiversity Strategy. Washington: World tional readings on the topics discussed in this Resources Institute. paper. It is not intended as a complete biblio- World Conservation Monitoring Centre. 1992. graphy of the topic, but to point readers to Global Biodiversity: Status of the Earth's important work in the areas covered. Many of Living Resources. London: Chapman & Hall. these sources themselves include pointers to other materials. The sources are presented in Biodiversity's importance for sustainable the same general order as the material in the development. paper itself. Myers, N. 1993. "Biodiversity and the Precautionary Principle." Ambio (22:2-3). Biodiversity, general: National Research Council. 1993. Sustainable Perrings, C., C. Folke and K.-G. Maler. 1992. Agriculture and the Environment in the "The Ecology and Economics of Humid Tropics. Washington: National Biodiversity Loss: The Research Agenda." Academy of Sciences. Ambio (21:3). Oldfield, M.L., and J.B. Alcom (eds). 1991. Holling, C.S., D.W. Schindler, B.W. Walker, Biodiversity: Culture, Conservation, and and J. Roughgarden. 1995. "Biodiversity in Ecodevelopment. Boulder: Westview Press. the Functioning of Ecosystems: an Ecological Synthesis." In C. Perrings, K.-G. Global trends: Ml1er, C. Folke, C.S. Holling, and B.-O. Houghton, R.A. 1994. "The Worldwide Extent jansson (eds), Biodiversity Loss: Economic of Land-use Change." BioScience (44:5). and Ecological Issues. Cambridge: Ingco, M.D., D.O. Mitchell, and A.F. McCalla. Cambridge University Press. 1996. Global Food Supply Prospects. McNeely, J.A., K. Miller, W. Reid, R. Technical Paper No.353. Washington: Mittermeier, and T. Werner. 1990. World Bank. Conserving the World's Biological Diversity Gland: IUCN. Interactions between agriculture and United Nations Environment Programme biodiversity: (UNEP). 1995. Global Biodiversity Gilpin, M., G. Gall, and D. Woodruff. 1992. Assessment. Cambridge: Cambridge "Ecological Dynamics and Agricultural University Press. Landscapes." Agriculture, Ecosystems and Wilson, E.O. 1992. The Diversity of Life Environment (42:1-2). Cambridge: Harvard University Press. Srivastava, J.P., J. Lambert, and N. Vietmeyer. World Resources Institute, World 1996. Medicinal Plants: An Expanding Role in Conservation Union, and United Nations Development. Technical Paper No.320. Environment Programme. 1992. Global Washington: World Bank. 48 Bibliographic Review 49 Srivastava, J.P., N.J.H. Smith, and D. Fomo. Brush, S.B. 1986. "Genetic Diversity and 1996. Biodiversity and Agricultural Conservation in Traditional Farming Intensification: Partnersfor Development and Systems." Journal of Ethnobiology (6:1). Conservation. ESD Monograph No.11. Wickens, G.E., N. Haq, and P. Day. 1989. New Washington: World Bank. Crops for Food and Industry. London: Chapman and Hall. Biodiversity richness of transformed landscapes: Rapid biodiversity assessment: Balee, W. 1989. "The Culture of Amazonian Margules, C.R., and T.D. Redhead, 1995. Forests." Advances in Economic Botany (7). BioRap: Guidelionesfor Using the BioRap Bennett, B.C. 1992. "Plants and People of the Methodology and Tools. Melbourne: CSIRO. Amazonian Rainforests: the Role of Ethnobotany in Sustainable Development." Economics of biodiversity: Bioscience (42:8). Perrings, C., K.-G. Ma1er, C. Folke, C.S. Holling, and B.-O. Jansson (eds). 1995. Relevance of land use to biodiversity: Biodiversity Loss: Economics and Ecological Turner, B.L., II, and K.W. Butzer. 1992. "The Issues. Cambridge: Cambridge University Columbian Encounter and Land-use Press. Change." Environment (34:8). Pearce, D., and D. Moran. 1994. The Economic Turner, B.L., (ed). 1990. The Earth as Value of Biodiversity. London: Earthscan. Transformed by Human Action: Global and Swanson, T. 1995. "The international Regional Changes in the Biosphere over the regulation of biodiversity decline: optimal Past 300 Years. Cambridge: Cambridge policy and evolutionary product." In C. University Press. Perrings, K.-G. Maler, C. Folke, C.S. Holling, and B.-O. Jansson (eds), In situ and ex situ conservation of plant Biodiversity Loss: Economic and Ecological genetic resources: Issues. Cambridge: Cambridge University Chang, T.T. 1984. "Conservation of Rice Press. Genetic Resources: Luxury or Necessity?" Swanson, T. 1992. "Economics of a Science (224). Biodiversity Convention." Ambio (21:3). Tripp, R., and W. van der Heide. 1996. "The Wells, M. 1992. "Biodiversity Conservation, Erosion of Crop Genetic Diversity: Affluence and Poverty: Mismatched Costs Challenges, Strategies, and Uncertainties." and Benefits and Efforts to Remedy Them." ODI Natural Resource Perspectives (7). Ambio (21:3). Using biodiversity to intensify agriculture in AgAicultural policies in developing a sustainable way: countries: Barfield C.S., and M. E. Swisher. 1994. Schiff, M. and A. Vald6s. 1992. The Political "Integrated Pest Management: Ready for Economy of Agricultural Pricing Policy Export? Historical Context and Baltimore: Johns Hopkins University Press. Internationalization of IPM." Food Reviews Lutz, E. 1992. "Agricultural Trade International (10:2). Liberalization, Price Changes, and Brookfield, H., and C. Padoch. 1994. Environmental Effects." Environmental and "Appreciating Agrodiversity: a Look at the Resource Economics (2). Dynamism and Diversity of Indigenous Farming Practices." Environment (36:5). 50 Mainstreaming Biodiversity in Agricultural Development: Toward Good Practice World Bank regional studies which address National Environmental Action Plans: biodiversity issues: Environment Department. 1995. National Africa Technical Department. 1995. Country Environmental Strategies: Learningfrom Environmental Strategy Papers. Washington: Experience. Washington: World Bank. World Bank. Lampietti, J.A., and U. Subramanian, 1995. Africa Technical Department. 1995. Towards "Taking Stock of National Environmental Environmentally Sustainable Development in Strategies." Environment Department West Central Africa. Washington: World Paper No.10. Washington: World Bank. Bank. Braatz, S., G. Davis, S. Shen, and C. Rees. The Global Environment Facility: 1992. "Conserving Biological Diversity: A Global Environment Facility (GEF). 1996. Strategy for Protected Areas in the Asia- Operational Strategy. Washington: GEF. Pacific Region." Technical Paper No. 193. Washington: World Bank. Decentralization: Lutz, E., and J. Caldecott (eds). 1996. Decentralization and Biodiversity Conservation. World Bank Symposium Series. Washington: World Bank. THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Telephone: (202) 477-1234 Facsimile: (202) 477-6391 Telex: MCI 64145 WORLDBANK MCI 248423 WORLDBANK Cable Address: INTBAFRAD WASHINGTONDC World Wide Web: http://www.worldbank.org/ E-mail: books@worldbank.org (D 0 9 7808211 338841 ISBN 0-8213-38846 CDt