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courtesy AfromusingAgricultural investment is the one bright spot amid the gloomy outlook for FDI to developing countries as the recession drags on, according to the new World Investment Report 2009.  UNCTAD, which produces the report each year, predicts that agribusiness will be at the forefront of the next “FDI boom” as it is less susceptible to business cycles and slumps in demand than other sectors. 

FDI in agriculture brings with it the promise of direct government revenues (taxes, fees, royalties) along with jobs, market access, technology transfer and infrastructure.  On the other hand, large-scale investments and land transfers may threaten local rights, resource access and livelihoods.  Impacts may extend well beyond the actual project site if, for example, a big producer floods the national market and displaces existing small-scale suppliers. 

“Land grabs” have made plenty of headlines in 2009, but what is their real extent and impact?  One argument is that the phenomenon is exaggerated.  Recent land deals account for only 2-5% of suitable agricultural land in sample African countries, for example.  Many of giant deals such as the 10 million ha deal between the Republic of Congo and South Africa’s commercial farmers’ association Agri-SA, scheduled to be signed in October 2009, are likely in reality to involve development of much smaller contiguous areas.  Furthermore, most approved deals are yet to go into operation, raising the possibility that some at least are purely speculative.

But small total land areas do not mean low impact.  In spite of the common rhetoric that biofuels should – and will – be confined to “marginal” or “waste” land, the reality is that large-scale agricultural projects are targeting the best land.  In Mali, the national land registry shows that large-scale land acquisitions for biofuels and food over the past five years have been confined to the highest potential, irrigated lands.  These are the areas that are most likely to under existing uses and claims.

There are two key issues at stake.  The first is whether there is a place for large-scale agribusiness in the local and national economy – this is a question that every country needs to explore, preferably through open and wide-reaching public debate that weighs up the pros and cons honestly.  The second is that the actual substance of agricultural investment deals is key to long-term benefits and outcomes.  Liberia’s President Ellen Johnson Sirleaf, for instance, has been particularly alert to opportunities to renegotiate the terms of major natural resource contracts, leading to more equitable terms on taxation, transparency and local benefits in the country’s deals with ArcelorMittal and Firestone.

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The financial crisis is hitting but not crippling African airlines. And those that are performing poorly, particularly SAA and Kenya Airways, are doing so owing to poor hedging strategies over oil prices rather than passenger and cargo management, which for KA volumes are up 10%.focus-4

And some, like Ethiopia Airlines, are booming, up 45% this calendar year. And investments in new airports, and new hubs – in Rwanda and Swaziland, indicate the private sector share confidence in the projected 9% year-on-year expansion in passenger numbers, which is estimated by IATA.

From an economic development viewpoint, aviation has an immediate impact on land use as options for marketing produce change. Managing this change is key to dictating whether the impact of more aviation in a new place is good, sustainable and viable. Once establised, the gradual growth over time of aviation has more mixed benefits.

The transfer of technology (soft and hard) is a key enduring benefit for many developing countries. There are legitimate concerns however that this is always in the interests of the nation, the workers, and particularly smaller businesses, and the poor.

Is this resilience in the aviation sector in Africa a sign of buoyant economies, fertile trades? What role can aviation play in securing sustainable economic development in the continent?

The need for host governments with growing aviation sectors to invest rents in ensuring that development is appropriate and managed.

Meat eating and its connection to climate change has suddenly come to dominate the media, with the likes of celebrities Paul McCartney, Kevin Spacey and Chris Martin (Coldplay) urging people to have one meat free day a week (Reuters, Bloomberg). As mentioned in a previous post, animal protein production (particularly large-scale) is a bigger contributor to greenhouse gas emissions globally than the transport sector – it is responsible for 18% of greenhouse gases (this includes both gases emitted from livestock and land use change). Greenpeace estimates every kilo (2.2 pounds) of beef eaten represents about the same greenhouse-gas emissions as flying 100 kilometers (62 miles).

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Unfortunately the types of gases livestock release (Methane, Nitrous Oxide) have far more powerful global warming power and potential than the typically demonised CO2 (nitrous oxide, for example, has 296 the global warming potential of CO2). This direct impact on climate change is exacerbated by the loss of forests to accommodate this growing industry, particularly in tropical zones such as Brazil and South America, that have significant potential to store carbon and help slow the current alarming rate of climate change. To add to the severity of the situation, production of meat is estimated to double from 2006 to 2050 (FAO, 2006), driven by growing demand in low and middle income countries as incomes rise.

Whilst climate change is evidently a serious issue, its consequences for society, particularly in the developing world, is of particular concern. Research suggests that the developing world is most vulnerable to climate change and its effects will be most strongly felt in the developing world. For example, whilst changes in the climate may be positive for agriculture in the developed world, the developing world is likely to see significant reductions in yields, due to decreases in rainfall and increases in temperature: ‘Results from a case study in Mali ..indicate that climate change could reduce forage yields by as much as 16 to 25% by 2050 and crop yields with a reduction from 9% to 17% for sorghum. In contrast pastures in cold areas are expected to benefit from rising temperatures’ (FAO, 2006).

I previously asked how the recession might impact demand for meat – suggesting that the recession could both reduce the amount of meat being bought (as a relatively expensive protein source and consumption being strongly correlated with income) and reduce the quality and types of meat being purchased. Some anecdotal trends suggest that this has been happening, particularly in the US. One industry expert argues that people are eating less beef, pork and poultry and that per capita consumption in the US is the lowest its been since 1982. In addition, people have been buying cheaper cuts of meat. This fall in consumption may give sustainable development a temporary reprieve from the negative impacts of animal protein production, but there are equity issues to bear in mind.

There are important differences in regards to global patterns of meat consumption. Whilst 100 million people go hungry and could benefit vastly (both in regards to physical and mental capacity, particularly children) from an introduction of more meat and dairy products into their diets, 1 billion people are either overweight or clinically obese and are far more prone to suffering from cardio-vascular disease, diabetes mellitus and some cancers because of excessive meat consumption. In India people consume 5kg per year of meat on average whilst in the US people consume 123 kg of meat, on average, per year.

The recession is likely to undo some of the economic growth and associated income gains in the developing world, potentially reducing any increases in animal protein consumption that are much needed. Meanwhile, for a vast majority in the developed world, the recession and any reductions in consumption may bring much needed health advantages and be benefical for the environment and society. Let’s hope the recession instills deep-seated changes in regard to how much animal protein consumption is necessary and ethical in the developed world. Maybe, just maybe, the recession has added fuel to Paul McCartney’s fire.

One thing that can be said for the recession is its ability to be thought-provoking. Having read an article about rising demand for meat and leather and its damaging impact on the Amazon and on its significant contribution to greenhouse gases (GHG) and climate change, I pondered how the recession might either exacerbate or alleviate deforestation through its impact on meat demand.

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There are several things that could happen:

  • Total demand for meat decreases as it’s a relatively expensive form of protein. This trend is supported by other changes in consumption, for example the increase in sales of eggs, which offer a cheaper protein source.
  • Demand for more expensive or ‘niche’ meat decreases (for example organic, or free-range meat, which may have less negative impacts on the environment, because it is less intensively farmed), whilst overall demand for meat remains static (picture meat on this graph).
  • Demand from the developed world drops for beef from international origins decreases, as ‘local’ produce becomes more important. These farming systems may have less direct impact on the rainforest, but their environmental impacts remains unknown and they will still contribute to GHG emissions.

In the first scenario – where total demand for meat drops, this may be a positive for the environment. In the second scenario, the impacts on the environment are likely to be negative. In the third scenario, the impact on the environment is uncertain.

To complicate matters further is the impact changing demand will have on the livelihoods of those who rely on meat production and for those who already have limited incomes to afford meat, the recession may shift consumption to wildmeat or bushmeat (much of which is illegally hunted and can contain endangered species) as a cheaper alternative.

What the recession has certainly shown us is just how interconnected income, consumption and sustainable development really is.

Crocodile skin, particularly wild crocodile, is prized in the fashion world for its glossy, beautiful appearance and has transcended the often fickle styles and trends of the fashion world, epitomising ‘classic’ and ‘timeless’ fashion. Picture Kate Moss carrying the same crocodile clutch her mother carried back in the sixties. Crocodilians specimens are also traded as meat and hunting trophies.WalletCrocodile-4Crocodilians include all alligators, caimans, crocodiles, gavials and other members of the order Crocodylia. Crocodilians are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which is an international agreement (to which states adhere voluntarily) between governments to ‘ensure that international trade in wild animals and plants does not threaten their survival’.

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The species covered by CITES are listed under three appendixes. Appendix I includes species threatened with extinction. Trade in specimens of these species is permitted only in exceptional circumstances. Appendix II includes species not necessarily threatened with extinction, but in which trade must be controlled in order to avoid utilization incompatible with their survival.

All crocodilian species have been included in CITES Appendix I or II in response to the decline in some wild populations as a result of unregulated international trade. A number of more common crocodilian species are included in Appendix II because they are so difficult to distinguish from more endangered species. As a result of CITES the majority of Crocodile leather comes from farmed and ranched (removing eggs form the wild to breed in captivity) sources. Whilst this is thought to have led to a turn-around in crocodlian populations after numbers plummeted in the 1960’s due to high levels of trade, it has also been argued that through removing traded crocodiles from their natural habitat and decreasing the need to hunt the wild crocodile, the economic incentive for conserving the wild crocodile and its habitat is reduced, or removed, alltogether.

James MacGregor argues that demand for wild harvested crocodilians is important in incentivising conservation. He concludes that: ‘in the crocodilian skin industry, or any industry founded on wild resources, is unwise to turn its back on the wild supply; wild crocodilian skins retain some advantages in today’s market—wild classic skins remain at the vanguard of the strategy of luxury brands.’

For several reasons one could argue that the recession might not impact demand for crocodile skin. This could be justified on the basis that:

  • Croc leather has a diverse and growing portfolio of markets and market segments and a continuing allure among customers.
  • Croc leather products are sold to wealthiest, well-established brands have no fear from crisis (as it exists today) owing to liquidity and relatively small cost. However this does account for small portion of the market. Think Beckham with her collection of $US2  million worth of Crocodile leather Hermes Birkin bags.
  • Accessories and ‘classic, timeless’ fashion pieces are increasingly being favoured, including exotic skin goods. The transfer of budget from other products to these could favour sales of croc products.

Despite these sensible assumptions, interviews with experts have revealed that the recession is undoubtedly taking its toll on the demand for wild crocodile skin – some tanneries, for example, have reported ‘no designer orders’ in the Q1 of 2009 and an significant increase in the downgrading and outright rejection of lower quality crocodile skin. Some industry participants are trying to postpone sales of wild skins to see if market conditions improve. For others, crocodile leather goods remain the ‘fastest-growing product line’ notably in the case of Hermes (who owns its own crocodile farms) claiming that “we cannot face demand. We have massive over-demand. We are limited by our ability to train new craftsmen.”

Co-existence in many countries of dangerous crocodiles and poor people has been made possible through provision of strong economic incentives to harvest sustainably. Indeed, many of the wild crocodile skins are produced under the strictest of regimes using sustainable use. Here, often poor hunters and communities are given opportunities to realise the benefits from these species who are often despised for the danger they present to human life. The changes brought about by the recession add fear that a collapse in orders owing to belt-tightening by the world’s elites will reduce their value in situ and reduce the incentives for co-existence. Closely monitoring the impacts of the recession will be key to ensuring conservation and livelihoods are not adversely affected.

I recently posted a piece, admittedly riddled mainly with questions, about how the recession would impact wildlife trade, land use, conservation and the balance between legal and illegal trade. Although a relatively small case-study in the global scheme of things, Argyll in Scotland, has demonstrated just what could happen as the economic going gets tough:

One unexpected consequence of the recession is that the needs for cheap meat and money-making are combining to bring DIY wildlife crime gangs to Scotland to poach Roe, Red, Fallow and Sika deer. There is already a lively black market for cuts of meat from these animals (Strathclyde Police).

Other anecdotal trends do suggests that this rise in poaching is not necessarily confined to Argyll and may be having more serious effects in terms of undermining sustainability, elsewhere. The Born Free Foundation has argued that ‘rising food prices, another rash of crop failures, wide-ranging impacts of the global recession, will lead to a rise in the ‘bushmeat’ trade in Kenya’. This is thought to be detrimental to conservation because a portion of the bush meat contains endangered species. A survey in 2004 revealed that 40% of meat being sold as beef or goat in certain Nairobi butcheries was either wholly or partially bushmeat – it would be useful to update this research and understand the extent to which the recession is impacting illegal wildlife trade.

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Source: Wildlife Works Ltd

Whilst on the surface it may seem that trade in illegal bushmeat is only damaging to the wildlife it affects, Born Free’s Senior Wildlife Consultant argues that “this is not just about saving individual animals, important as that is.  It is about preserving functioning eco-systems that bring benefits to every person on the planet.  The ecosystem services provided by Africa’s forests and savannahs include rainfall, carbon storage and stabilizing the global climate, so we all have an interest in preventing a few profiteers from destroying these globally important ecosystems for personal gain.”

Illegal hunting and trade of wildlife, removes the economic connection between habitat (or land) and wildlife, undermining economic incentives to conserve habitats and, as a result, environmental sustainability – not just in the specific country concerned, but globally.

Africa’s deforestation rate is four times faster than the world average and is of particular concern for climate change because of its important role as a carbon sink.

Though the relationship between the economic crisis and deforestation isn’t on the surface an obvious one, the drivers of deforestation in Africa are only likely to become more pressing as the recession sends global shockwaves – affecting the cost of living for those who can least afford to spend more of their income on feeding themselves and their families. This is likely to exacerbate deforestation and the use of other natural resources as people seek to increase their income.

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Land tenure is thought to be a massive hurdle for conservation and particularly in the prevention of deforestation, with less than 2% of Africa’s forests under community control. The Guardian argues that in order for the currently negotiated Reduced Emissions from Deforestation and Degradation (REDD) credits to be effective  secure property rights are essential (REDD put simply is where you get paid for not destroying an ecosystem, providing financial incentives for conservation):

“Land tenure and forest governance are also key factors that will determine the success or failure of any REDD initiative, and the mechanisms by which payments and benefits are shared will be critical” (IIED).

The Economist argues that ‘The obvious economic explanation is that the over-exploitation of animals and plants is an example of the “tragedy of the commons”. If no one owns the wildlife or the land on which it lives, the behaviour that is individually rational—poaching, clearing land and so forth—may be collective folly. Trade ban or no trade ban, without enforceable property rights, the underlying tragedy remains’.

The logic is that, if communities have direct ownership of the land that are taking timber (or, indeed, any wildlife from) there is greater financial incentive for conservation: “Africa’s forest communities already generate millions of jobs and dollars in domestic and regional trade, and in indigenous livelihoods, but current laws keep some of these activities illegal and also undermine opportunities to improve forest management” (Rights and Resources Initiative). Resolving property rights, because of its direct link to resource use and deforestation is argued to be a first key step to addressing the causes of climate change.

However, some argue that deforestation is less an issue of property rights and more about the lack of governments’ control of access to wildlife and the land it occupies, through both social structures and formal rules. Land reforms alone are unlikely to be a panacea for deforestation – governments need to support local management and enterprises so that people have direct control over the resource and more financial incentive to ensure the sustainability of it.

The recession has only served to bring the debate over conservation, deforestation and effective government solutions into even sharper focus.

A small town in Belgium, called Ghent, has become part-time vegetarian, after its inhabitants decided to abstain from eating meat one day a week, says the Guardian.

The FAO claimed, in 2006, that the livestock industry accounts for 18% of all anthropogenic greenhouse gas emissions. A pretty compelling stat considering meat eating is conventionally regarded as a benign practice, one that is seen as important for our health and a core part of the developed world’s mealtime habits. Since 1950, however, meat consumption is thought to have increased by 500%. Is our meat eating spiraling out of control?

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The production of meat is a relatively inefficient energy-wise – not only is there energy loss in the consumption of food products by livestock, that we then eat (when we could eat the food product or an equivalent food product such as wheat, directly) but livestock are also thought to use up to 200 times more water per kilogram produced of meat, than it does for wheat. In addition,  livestock production has come to be associated with deforestation, particularly in areas like Brazil, which has led to the loss of an important carbon sink not to mention its biological and ecological value. With rising and volatile food prices, it seems illogical to be diverting food – particularly cereals – to feed livestock, to then feed us with a luxury food product that in many cases is eaten excessively. Meat consumption has been scientifically linked to cardiovascular disease, diabetes and some cancers in the West, where meat consumption is particularly high.

Relatively speaking meat is expensive and although an important source of protein I doubt very much our diets need to consist of a daily dose of meat. It would be interesting to see if the recession has cut down on overall sales of meat as people tighten their purse strings, or if consumers have moved away from higher quality or speciality meats, such as Organic or Free Range and downgraded for cheaper options (which unfortunately are likely to have more negative externalities for the environment).

It is important to bear in mind that there is significant variation between meat sources and that production practices vary hugely in their environmental impact. Compare, for example, meat produced in the U.S and Kenya – in the U.S,  for each calorie of meat or dairy consumed, livestock consumes on average more than 5 calories in its production. In Kenya, livestock yield more calories than they consume because they are fattened on grass and agricultural by-products that are inedible to humans. Similarly, the developed world, not only in its production practices, but also in its consumption, contributes far more to livestock-related emissions than the developing world. Compare Uganda and the U.S and Europe – in Uganda 45 kg of meat and dairy products were consumed in 2003, whilst in Europe and the U.S. this figure soared to 400kg.

Whilst vegetarianism is a goal that is perhaps unrealistic, cutting down on meat intake could have a significant impact on greenhouse gas emissions.  A one day a week ‘vegetarian’ goal is argued to be achievable and one that is gaining popular traction – let’s hope the small town in Belgium is only the beginning…..

An article by the Guardian recently revealed plans for increased numbers of armed guards and miles of electric fencing to be erected around its key national parks in order to ‘protect water sources and stop impoverished people felling trees’. Kenya’s five national parks are thought to provide almost 80% of the country’s drinking water and hyrdroelectric power, but in one park in particular – Mau, 15,000 people now live ‘illegally’ and are believed to have cut down 104,00o hectares of trees in the past 15 years. Other parks – including the Mara, mentioned in an earlier post – have suffered from excessive livestock grazing and from deforestation for charcoal.

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The increased use of natural resources in national parks is believed to be a result of drought triggered by changing weather patterns associated with climate change and is being futher exacerbated by population growth.

The head of the government run Kenya Wildlife Service states that “the long rains have failed for the first time. The implications for food security and water scarcity and energy are profound. Kenya will face these three crises in the next 10 years without a doubt. If we carry on the way we are going, in 20 years the consequences will be horrific”.

The recession is undoubtedly a double blow to the communities involved in conservation and tourism in areas surrounding national parks, as they begin to suffer from falling tourist revenues and as food prices and inflation rises.

Whilst the article highlights a very serious and significant issue, its stance is very much one of a concerned conservationist or environmentalist with local populations regarded as the core problem. What it fails to consider is the wide responsibility we all have in facing and dealing with the global impacts of climate change and above all, worsening poverty, on people.

Many have argued that ‘conservation’ has long been a powerful political tool to justify the control and subordination of marginalised people, and whilst this fence may not be a direct means of subordinating the local population it does not deal with the root cause of the issue – that of profound poverty and the exacerbation of this poverty caused by anthropogenic climate change and the financial crisis.

Fences, after all, can be climbed and when your family’s life depends  on it, no wall is insurmountable.

Does Kenya, therefore, provide a small glimpse of the future for many communities in the developing world as the recession and climate change take their hefty toll? Surely a more long-term, meaningful solution than an electric fence is needed? Now, more than ever, can we ill-afford to solve only one, very small part of the problem.

Prices of cocaine at wholesale level are reportedly skyrocketing owing to successful enforcement by drug agencies around the world. More interestingly, the price elasticity at sale is so high, that consumers perceive they are paying the same price per volume, whereas they are actually buying insecticide and other cuttable agents.

The BBC report on this today, but neglect to mention the impact that this enforcement is having on the farmgate price or export price from the developing country producers. Agencies regularly recommend using the lure of alternative legal livelihoods for the producers of illicit drugs to reduce total production. See here for the UNODC. This often fails owing to the relative farmgate value of the legal and illegal crops. No to mention the different supply chains involved and other, less savoury aspects of growing illegal crops in developing countries.

Is now the right time for leveraging the goal excellently stated by the UNODC: “The success of quality alternative development interventions is undeniable; however, many challenges still lie ahead. The gains made in reducing illicit cultivation in key countries over the past decade could come undone if poverty does not abate. Poverty alleviation and sustainable development should continue to be the main goals of alternative development.”

So, is the recession combined with more successful enforcement of trade at the consumption level providing a renewed impetus for legal sustainable development? It is not often convergence of global economics unveils an opportunity – the question is can this convergence be determined, and can donors and national governments act quickly enough to seize this opportunity? Missing opportunities has grave consequences, as the explosion in opium planting in Laos proves – loss in tourism coupled with a weakened economy, has seen farmers lured back to illegal crop production.