TRANSFORMING AGRICULTURAL SUPPLY CHAINS TOWARDS A GREEN ECONOMY

TRANSFORMING AGRICULTURAL SUPPLY CHAINS TOWARDS A GREEN ECONOMY By Nathan Leibel Eddy Russell

Presentation Outline • • Introduction Key success areas/ lessons Threats, challenges and opportunities for action 5 Key thematic questions/issues Economic implications Policy and governance requirements Concluding remarks Recommendations for Green Economy Plan

Introduction - Agricultural construct • 15% SA land under cultivation (approx. 50 million hectares) 1. 3 million ha irrigated; • Agricultural contributed R 36 billion in 2009 ; • Main crops: Corn, wheat, many other niche crops; • Supplied through a combination of commercial, small holder, subsistence farming; • Main Problems for green economy: Unsustainable agricultural practices, low wages, limited credit access, human capacity issues, weak rural institutions, inadequate infrastructure (including access to markets), low technology access and worsening climate change.

Key success areas/ lessons • Shifting some of this burden using Market Based Instruments rather then public funds i. e. using supply chains to; i. e. Drive eco-labeling and their markets e. g. flowers / wine industry / badger friendly honey i. e. Other PES markets i. e. carbon credits, water payments, biodiversity payments. UNDP is tackling sustainability issues using a supply chain approach through the development of mainstreaming projects that protect biodiversity in production landscapes, and through the creation of a new UNDP facility the “Green Commodities Facility” that focuses on sustainable production.

Threats, Challenges and Opportunities for action • Threats : loss of biodiversity and ecosystem services; globalization of commodities; national food security; climate change; • Challenges – health, education, support services (production), lack of infrastructure (roads, irrigation, storage), credit access, incentives for sustainability, finding the right policy/regulation/legislative tools ; • Opportunities – International green markets, engaging private sector supply chains, consumer awareness, increasing agricultural employment, reduced food prices.

5 Key thematic questions/issues • Best ways to promote and drive sustainable production? • What financing mechanism can we use to promote sustainable production – MBI? Public funds? A combination? • How do we create and strengthen the appropriate tools to drive sustainable agriculture? • How do we better involve private sector supply chains to promote sustainable sourcing operations? • What is the most efficient and timely way of raising consumer awareness? Who pays?

Economic implications Exports WILL grow, need sustainable production practices; Import issues – subsidized goods from Europe; Rising input costs i. e. fertilizers etc, Water shortages for irrigation – 50% water in SA used for agriculture; • Raised awareness of green goods and options to buy them i. e. support eco-labels (new markets and premiums); • By greening upstream supply chain processes, more jobs will naturally flow at each supply chain step. • • Given this, investment in efforts to protect the environment’s ability to deliver ecosystem services becomes crucial

Policy and governance requirements • Remove restrictive policy; • Farmer support services, improve human capacity, strengthen rural institutions; • Tax breaks for green orientated supply chains; • Fast tracking registration processes for green investments; the need for a national clearing house? • Creating national standards for sustainable production.

Concluding remarks “We need to work together towards a greener economy…. the continuation of unsustainable production practices and the unsustainable use of priceless public resources i. e. water, soils, forests, etc will not last forever. We all have a vital role to play, and we are far from powerless. Your purchasing choice can and will play a pivotal role in the transformation of the consumer market place. This statement crosses all borders… from who you chose as your banker, to what you buy at your local supermarket – you indeed have a choice and buying power. ”

Recommendations Short: Increase awareness campaigns for green goods Medium: Promote and strengthen market based instruments i. e. certification, that lead to sustainable management of production landscapes Long: Institutionalize agriculture best practices/standards within national policy.

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