Green Agricultural Policyand the Commons

Dr Darko ZnaorIndependent Environmental Consultant

Vis, August 24, 2014

ContentsContents

1. Agric. & the commons & economy2. Western Balkans agri study3. Conceptual & practical challenges4. Results5. Lessons learnt & conclusions

1. Agric. & the commons & economy2. Western Balkans agri study3. Conceptual & practical challenges4. Results5. Lessons learnt & conclusions

Agriculture&

the commons

Agriculture&

the commons

Agriculture & the commonsAgriculture & the commons

• Food• Land, water & genetic resources• Provision of ecosystem services• Socio-cultural & spiritual dimension

REFLECTED IN POLICY

• Food• Land, water & genetic resources• Provision of ecosystem services• Socio-cultural & spiritual dimension

REFLECTED IN POLICY

Agri ecosystem services affect well beingAgri ecosystem services affect well being

1. Security - shelter and the ability to reduce vulnerability to ecological shocks and stress.

2. Basic material for a good life (income & livelihood.

3. Health - access to nourishment, freedom from diseases, access to adequate and clean drinking water, clean air, etc.

1. Security - shelter and the ability to reduce vulnerability to ecological shocks and stress.

2. Basic material for a good life (income & livelihood.

3. Health - access to nourishment, freedom from diseases, access to adequate and clean drinking water, clean air, etc.

Agri commons vs. economyAgri commons vs. economy

How much and who should pay it?

HBS’s Western Balkans agri study in a nutshell

HBS’s Western Balkans agri study in a nutshell

??What if... in B&H, HR, MNE and SRBWhat if... in B&H, HR, MNE and SRB

Policy makersPolicy makers

Farming reality in WBFarming reality in WB

                                              

TR

AN

SP

OR

T

TRANSPORT

TR

AD

E

ENERGY

Energy

FARMING

SER

VIC

ES

IND

US

TR

Y

Pesticides Vet. medicineFertilisers MachineryFeedstuff

Raw material

Agri inputs

Ag

ri in

pu

ts

Knowl.

Impact onImpact on

Labour force

State of environmentProduction

GDP

Econ

om

yEcon

om

yS

ocio

-econ

om

.S

ocio

-econ

om

.

Food

secu

rity

Food

secu

rity

Qu

ality

of

lifeQ

uality

of

life

Impact assessment

Monetary assessment(valuation)

Non-monetary assessment(quantification)

Economic sectors

Labour force employed

Environmental degradation

Quantity of airpollutants

Quantity of waterpollutants

Quantity of Clost/emitted from soil

Volume of agriculturalproduction

Gross value added

(€)

Environmentalcosts

(€)

Publicexpenditures

(€)

Realvalue added

(€)

Agriculture Fertiliser manufacturing

Baseline(2009)

BAUscenario

ECOscenario

ECO+scenario

Quantity ofGHG

= pURO = real added-value = pURO = real added-value

GVA agriculture & fertiliser manufacturing

minus environmental costs fUTURO

minus public expenditures

GVA agriculture & fertiliser manufacturing

minus environmental costs fUTURO

minus public expenditures

Environmental costs & public expenditures

Environmental costs & public expenditures

Environmental externalitiesEnvironmental externalities

negative

• damage to soil, water, air• biodiversity loss • non-renewable resource use (energy, phosphate, peat)

• damage to soil, water, air• biodiversity loss • non-renewable resource use (energy, phosphate, peat)

• biodiversity maintenance• ecosystems functioning (C sequestration, water, etc.)

• biodiversity maintenance• ecosystems functioning (C sequestration, water, etc.)

negative positive

• damage to soil, water, air• biodiversity loss • non-renewable resource

use (energy, phosphate, peat)

• damage to soil, water, air• biodiversity loss • non-renewable resource

use (energy, phosphate, peat)

Damage to air/climateDamage to air/climate

Damage to waterDamage to water

Damage to soilDamage to soil

Hidden subsidies Hidden subsidies

Conceptual & practicalchallenges

Conceptual & practicalchallenges

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

2048

2050

hect

ares

108% peryear

30% peryear

10% peryear

67 67 65 64

44

28

0

10

20

30

40

50

60

70

80

Wheat Barley Sugar beet

Grain maize

Cows' milk Potatoes

% o

f EU-1

5 yi

elds

182

153 148141 138

121 117103

63 6248

40

0

20

40

60

80

100

120

140

160

180

200

% o

f co

nven

tiona

l yie

ld

yields

price output

prod. costs

GM transaction

input 1

input 2

mech.

Pricing externalities...Pricing externalities...

... a big methodological challenge... a big methodological challenge

Only a fraction of ecosystem services included

Only a fraction of ecosystem services included

Public expenditurePublic expenditure

negative

positive

• agricultural subsidies• hidden subsidy to AC ind.• investments in gas

pipelines• administration• research and education• road & ditches

maintenance• pesticide disposal• incidental pollutions • storage/cooling?• damage to human health?• health care?

• agricultural subsidies• hidden subsidy to AC ind.• investments in gas

pipelines• administration• research and education• road & ditches

maintenance• pesticide disposal• incidental pollutions • storage/cooling?• damage to human health?• health care?

• food security• employment• landscape/recreation space• others?

• food security• employment• landscape/recreation space• others?

RESULTSRESULTS

Results BASELINEResults BASELINE

288,306

205,760 47,042

453,910

995,018

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

B&H HR MNE SER Total

AW

U

39,89387,094

5,590

212,431

345,007

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

B&H HR MNE SER Total

CU

774

1,501

106

1,879

4,260

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

B&H HR MNE SER Total

ME

UR

624 793

68

1,544128154

26

475

96

26

52

73

6

264

0

500

1,000

1,500

2,000

2,500

B&H HR MNE SER

ME

UR

Air Climate Water Soil

40

385

0103

78

0

26

28

55

00

100

200

300

400

500

600

B&H HR MNE SER

ME

UR

Direct paymentsAgric. fuelSubsd. gas priceOthers

-1,000

-500

0

500

1,000

1,500

2,000

2,500

B&H HR MNE SER

-99-169

6

-570

68 5530 140

8051,117

100

2,309

7741,501

106

1,879

ME

UR

RVA Public expend. Envir. costs GVA

DEVELOPMENTSCENARIOS

DEVELOPMENTSCENARIOS

995,018

895,516

1,089,9121,119,417

700,000

750,000

800,000

850,000

900,000

950,000

1,000,000

1,050,000

1,100,000

1,150,000

Baseline BAU ECO ECO+

AW

U

345,007

310,002

373,096

460,626

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Baseline BAU ECO ECO+

CU

4,260 3,931

4,866

6,366

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Baseline BAU ECO ECO+

ME

UR

528 528 528 528

104 104 104 104

46 330 0

8380

100 100

400

450

500

550

600

650

700

750

800

Baseline BAU ECO ECO+

MEU

R

Direct payments

Agric. fuel

Subsd. gas price

Others

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Baseline BAUECO

ECO+

-832 -449 5512,051

761744

732 732

4,2603,931

4,866

6,366

4,331

3,635 3,5833,583

ME

UR

RVA Public expend. Envir. costs GVA

Baseline

BAU

ECO

ECO+

0

50

100

150

200

250

300

350

Economic performance Employment

Food production

166

110 108

347

113 134

146

9090

100100

100

Baseline

BAU

ECO

ECO+

LESS

ONS

LEARNT

&

CONCL

USI

ONS

• Work load & complexity

• Pioneering work

• Methodolgical issues

• Bold & courageous

Key policy – relevant findingsKey policy – relevant findings

1. Agric. in the Western Balkans does matter

2. Current agri policy provide a ‘low profile’ support to OF

3. Current farming does not create any RVA

4. Key = build soil fertility and human and social capital

5. Conversion to OF provides more jobs

6. Conversion to OF produces more food

7. Going organic is “greener”

8. Going organic is more profitable

9. Business as usual is not an option

1. Agric. in the Western Balkans does matter

2. Current agri policy provide a ‘low profile’ support to OF

3. Current farming does not create any RVA

4. Key = build soil fertility and human and social capital

5. Conversion to OF provides more jobs

6. Conversion to OF produces more food

7. Going organic is “greener”

8. Going organic is more profitable

9. Business as usual is not an option

Additional considerationsAdditional considerations

1. Acounting true cost of farming is KEY

2. Pricing ecosystem services – fair & possible???

3. What is a proper policy mix?

4. Introduction of green agri accounting?

1. Acounting true cost of farming is KEY

2. Pricing ecosystem services – fair & possible???

3. What is a proper policy mix?

4. Introduction of green agri accounting?

Human and social capital ???

Human and social capital ???

THANK YOU!darko@znaor.eu