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Rising demand for agricultural products adds to competing pressures on tropical forest landscapes

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Annual consumption of food and agriculture products rose by 48% between 2001 and 2018 – more than twice the rate of increase in human population – as reported in a new analysis published by the Tropical Forest Alliance at the World Economic Forum entitled Forests, food systems and livelihoods: Trends, forecasts and solutions to reframe approaches to protecting forests.

The report, which tracks the relationship between the rising demand for food and agricultural products and deforestation, paints a picture of increasing competing demands on tropical forest landscapes. Since 2001, 160 million people have been lifted out of poverty and undernourishment increasing the per capita food consumption, particularly protein which has risen 45% since 2000.

In producer countries, these trends are often linked to economic development and rural livelihoods that creates a set of complex trade-offs for decision makers. For example, soybeans are now the most valuable export product for Brazil, and around 16.3 million people (12% of the total workforce) are employed in the palm oil industry in Indonesia.

The report also highlights the significant loss of primary forests, which are rich stores of carbon and biodiversity. An area exceeding 60 million hectares of primary tropical forests have been lost since 2002 – almost the size of France. The loss was 12% higher in 2020 than the previous year, despite all the efforts by governments, businesses and civil society. More than 80% of this deforestation happened in landscapes where agriculture is the dominant driver and much of this is linked to the production of globally traded commodities including soy, palm oil, cattle, cocoa, coffee and wood pulp.

In the face of this reality, the report concludes that those working to reverse deforestation need to deploy systemic solutions that take into account the multiple competing demands on these landscapes. For example, incentives can be provided for farmers to conserve more while producing food, with potential sources coming from both carbon finance and domestic finance for rural credit. More effort needs to be applied to boost productivity sustainably, particularly for smallholder farmers in the face of greater climatic stress. Improved technical assistance and new plant material to help increase yields, as well as support with the diversification of income streams, are essential.

Mr Samuel Abu Jinapor, the Minister of Lands and Natural Resources, Ghana says: “The time for action is now. We will pursue progressive policies with the overarching view to restoring the forest cover of Ghana, thereby contributing to the global effort against climate change.”

Justin Adams, Executive Director, Tropical Forest Alliance, says: “No single policy or solution can resolve this. Commodity-driven deforestation must not be treated in isolation – either as a purely environmental issue or a supply-chain problem. Keeping forests standing is linked directly to sustaining rural livelihoods, ensuring food security for a growing global population and supporting economic development. Crucially, the community of action working on this issue must broaden beyond those engaged at the forest frontier and environmental issues to include actors in the food system more broadly, such as farmers, local communities, local businesses and local governments.”

There is some evidence that private sector supply-chain strategies are helping to reduce deforestation. For example, Nestlé has assessed that 90% of key ingredients – including palm oil, sugar, soy and meat – are deforestation-free as of last year, and has committed to 100% deforestation-free products by 2025. Magdi Batato, the Executive Vice President and Head of Operations of Nestlé says: “A forest positive future is possible if the private sector collectively moves its focus on achieving a positive impact in the critical landscapes that underpin our food systems, and if we work hand-in-hand with farmers and local communities, and governments to form wider solutions across local, regional and global levels. The benefits are numerous: more resilient communities and livelihoods, more sustainable food systems, and a healthier planet.”

While many companies are committing to ambitious efforts in their own supply chains, it is also critical that this is done in conjunction with a broader sector-wide transformation to reduce net deforestation. Landscape-scale or jurisdictional approaches, which promote sustainable practices by rooting them in local governance systems, offer a practical way for both companies and governments to collaborate.

Christine Montenegro McGrath, Vice President and Chief Global Impact and Sustainability, Mondelēz International and Co-Chair, Consumer Goods Forum Forest Positive Coalition of Action says: “Important shifts are taking place – and as we look ahead to the UN Food Systems Summit and COP26 this year – we need to integrate food production as a critical part of the collective action required to meet both the Paris Agreement and goals on biodiversity. This report shows that landscape-scale initiatives provide a crucial piece of that puzzle for businesses who are on the journey to becoming forest-positive.”

The Intergovernmental Panel on Climate Change (IPCC) last month provided alarming evidence about the irreversible changes to the climate including for forests, and has also established that climate change is already having an adverse impact on food security and terrestrial ecosystems, with the tropics among the most vulnerable regions in terms of crop yields. This report predicts a shrinking agricultural labour force, posing even further risks for agricultural production.

President of the World Economic Forum Borge Brende says: “This combination of risks from climate change and demographic shifts suggests that the rural development models that have underpinned the expansion of tropical agriculture in the first two decades of the century are coming under increasing pressure from several angles. This underpins the need for a multistakeholder approach to find systemic solutions exemplified by the work of the Tropical Forest Alliance and the FACT Dialogue that will be presenting its findings at COP26 in Glasgow.”

Finally, the report points to the need to tackle data gaps that can enhance transparency in supply chains. There have been a number of promising innovations in recent years in improving transparency and data quality, especially the use of satellite imagery. However, despite this progress, gaps remain, including concession boundary maps, trade and export data, distinguishing between tree cover loss and deforestation, spatial data on crop production, incorporating information on time lags (between deforestation and associated production) and improving the rigour by which drivers of deforestation are understood.

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Development

World Bank Group and Azerbaijan Sign Agreement to Strengthen Partnership

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The Government of the Republic of Azerbaijan and the World Bank Group signed today an Agreement on Establishing and Operation of Offices in Azerbaijan.

The Agreement was signed by Minister of Finance Samir Sharifov, on behalf of the Republic of Azerbaijan, and World Bank Vice President for Europe and Central Asia Anna Bjerde, on behalf of the World Bank Group. Prime Minister of Azerbaijan Ali Asadov and Governor of the Central Bank of Azerbaijan Elman Rustamov also took part in the signing event.

The signing of the new Establishment Agreement will greatly facilitate the work of the World Bank Group in Azerbaijan, including administration of its offices in Baku, to support joint efforts to achieve a green and resilient recovery through sustainable, inclusive and equitable growth.

“Our partnership with the World Bank has seen Azerbaijan’s incredible transition from a lower-income country to a donor of the International Development Association, the part of the World Bank Group that helps the world’s poorest countries,” said Ali Asadov, Prime Minister of Azerbaijan. “This agreement will help augment these achievements.”

The World Bank has financed over 50 projects, with total commitments of $4.4 billion, spanning many national development priorities, including building human capital, strengthening access to infrastructure, public services and jobs, investing in agricultural competitiveness and rural development, and supporting the livelihoods of internally displaced persons.

“We look forward to continuing to grow and develop our collaboration with the Government of Azerbaijan and to bringing the best experience and expertise the World Bank can offer in support of Azerbaijan’s 2030 vision and development goals,” said Anna Bjerde, World Bank Vice President for Europe and Central Asia.

As the largest global development institution focused on the private sector in emerging markets, IFC, a member of the World Bank Group, has been supporting the private sector in Azerbaijan and has invested around $850 million in the country, including mobilization.

“A vibrant private sector is crucial for economic growth. The signing of this agreement with Azerbaijan comes at a time when the country is taking steps to have the private sector drive economic diversification. IFC is committed to continue supporting sustainable growth in Azerbaijan by helping mobilize the power of the private sector,” said Wiebke Schloemer, IFC’s Acting Vice President for Europe, Latin America, and the Caribbean.

2022 will mark the 30th anniversary of Azerbaijan’s membership in the World Bank.

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ILO launches new tool on social dialogue

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The ILO has launched a new tool  to help its constituents enhance the effectiveness and inclusiveness of their national social dialogue institutions.

The tool was developed as part of the Plan of Action on social dialogue and tripartism  (2019-2023) that was endorsed by the ILO Governing Body at its March 2019 session . The Plan also implements the resolution and conclusions on social dialogue of the International Labour Conference (ILC) held in June 2018 .

The self-assessment method for social dialogue institutions (SAM-SDI) guides the social dialogue actors – governments, employers’ and workers’ organizations – through a process that analyses the inclusiveness and effectiveness of their social dialogue institutions. Based on this analysis, they can devise and implement an action plan to increase the institution’s impact on policy-making.

Social dialogue, based on respect for freedom of association and the right to effective collective bargaining, has a crucial role in designing policies to promote social justice and social and economic progress.

Social dialogue institutions have a key role to play in the achievement of the UN Sustainable Development Goals  (SDGs), particularly SDG 16, which promotes peaceful and inclusive societies for sustainable development, access to justice for all and effective, accountable and inclusive institutions at all levels.

Social dialogue is also an essential component of SDG 8 , which promotes sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. It is also central to the achievement of SDG 5, on gender equality.

The SAM-SDI consists of six inter-linked steps. It is available online in English, French and Spanish, on a self-contained USB card and through an interactive e-Platform hosted by the ILO’s International Training Centre.

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OECD and Viet Nam sign MoU to deepen co-operation and support reforms

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The OECD and the Government of Viet Nam today signed a Memorandum of Understanding (MoU) to strengthen co-operation over the next five years.

The MoU, the Organisation’s first with Viet Nam, will frame future co-operation and pave the way for an eventual OECD Country Programme with Viet Nam. It was signed in Paris by OECD Secretary-General Mathias Cormann and Viet Nam Foreign Minister Bui Thanh Son in the presence of Pham Minh Chinh, Prime Minister of Viet Nam.

The MoU aims to support Viet Nam’s reform efforts in areas where it is already working with the OECD, such as competition, investment, and tax policy. It will also support country-specific reports like the first OECD Economic Survey of Viet Nam, due in 2022, and can support the follow up of the OECD Clean Energy Finance and Investment Policy Review of Viet Nam, published earlier today.

The Review finds that Viet Nam has been successful in facilitating high levels of investment in clean energy in recent years. The rapid growth of the solar market, however, has resulted in challenges with integrating variable renewable generation into the grid and changes to renewable procurement mechanisms are emerging sources of investor uncertainty. Adapting standardised contracts to minimise investor risk perceptions would support greater flows of capital and reduce the cost of financing clean energy infrastructure. The Review also outlines recommendations to help Viet Nam mobilise finance and investment to turn the energy sector carbon neutral, a prerequisite to reach its pledge of net zero emissions by 2050, made at COP26 this month.

“The clean energy sector will play a crucial role in making Viet Nam’s recovery sustainable and helping it to achieve its industrial targets,” Mr Cormann said of the Review. “Effective clean energy policies are increasingly a source of comparative advantage to attract foreign direct investment, particularly in the manufacturing sector, as international companies seek to make their supply chains carbon neutral.”

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