Result Briefs November 29, 2017

Climate-Smart Agriculture

Image

Cocoa and chocolate producing countries and companies take action to end deforestation.

Challenge and Opportunity

Global agricultural production will need to grow by an estimated 50% between 2013 and 2050, to meet the demands of 10 billion people. Growing enough safe and nutritious food will stretch current resources and require enormous ingenuity in the face of a changing climate. Not only will climate change make it more difficult to meet this future demand, its impact is already being felt in the form of reduced yields and more frequent extreme weather events that affect crops and livestock.

Already today agriculture, forest loss and land use changes generate a quarter of the world’s greenhouse gases. About 80% of deforestation worldwide is also driven by agriculture. Just four commodities - palm oil, soy, beef, and wood products—account for more than 40% of tropical deforestation. Agriculture is therefore a central part of the solution to develop a global and sustainable low-carbon economy.

Recent experiences have demonstrated that climate-smart agriculture, if done right, can produce triple wins: higher agricultural productivity that can also boost farmer incomes; climate mitigation through reduced greenhouse gas emissions; and increased resilience and adaptation to climate change. Climate-smart agriculture includes approaches and techniques ranging from intercropping and integrated crop-livestock management to improved water, soil, and nutrient management. While there have already been productivity increases in many regions, achieving further productivity gains while reducing agriculture’s climate footprint will be key.

The World Bank Group is a leading financier of agriculture and related sectors, with $6.8 billion in new IDA/IBRD commitments and $4.5 billion in agribusiness investments in FY 2018.

The Bank works with countries, helping introduce innovation and providing infrastructure and resources so that the food and agriculture sector is climate-smart, improves livelihoods and creates more and better jobs, includes inclusive and efficient value chains, and produces safe and nutritious food. The Bank has partnered with the International Center for Tropical Agriculture and the Climate Change Agriculture and Food Security program to provide detailed country and region climate-smart profiles for a growing number of countries, and seeks to generate adaptation and mitigation co-benefits throughout its portfolio. For example, in China, the $313 million Integrated Modern Agriculture Development project supports the adoption of improved irrigation systems and other climate-smart agricultural practices in six provinces, helping about 380,000 rural households become more resilient to climate change. In Uruguay, a World Bank-financed project is helping roll out climate-smart farming and livestock practices deploying satellite technology, to curb erosion and increase carbon sequestration.

The International Finance Corporation (IFC), the Bank’s private lending arm, invested $40 million loan in the Anyou Biotechnology Group in 2016 to scale up its innovative animal feed operations: namely, a formula that reduces feed costs while also reducing animal waste discharge and associated emissions by 30%. A joint IFC-Société Générale investment of €70 million to Burkina Faso’s biggest cotton company, SOFITEX, seeks to help farmers in its supply chain address productivity, water scarcity, and climate resilience concerns. In FY2018, the IFC invested $295 million across 25 climate smart agribusiness projects.

 

Transformative Action

Rising global demand for chocolate and diseased tree stock, combined with poor agricultural practices, underinvestment, and decreasing productivity in existing cocoa farms are not only reducing crop yields of cocoa but also driving deforestation and forest degradation. Moreover, cocoa is naturally a shade loving species, requiring planting under a canopy of retained forest trees. The public and private resources required to transform the cocoa sector in Cote d’Ivoire and Ghana, where 60% of the world’s cocoa comes from, are in the order of several billion dollars.

The Cocoa and Forests Initiative, launched in 2017, brings together top cocoa-producing countries, Côte d’Ivoire, Ghana -- and more recently Colombia, with leading chocolate and cocoa companies for concerted action to end deforestation from cocoa production. This coalition, led by IDH the Sustainable Trade Initiative, the Prince of Wales’s International Sustainability Unit and the World Cocoa Foundation, and 32 companies, including Nestlé, Mars, Ferrero, Hershey, Touton, Mondelēz, Olam, Ecom Group, Barry Callebaut, Cargill, CEMOI.

Since signing up to the Initiative, Côte d’Ivoire and Ghana have announced plans for a new approach to improve management of forest reserves based on the level of degradation of the forests. Up-to-date forest cover and land use maps will be developed and publicly shared by the governments. The chocolate and cocoa industry have agreed to put in place verifiable monitoring systems for traceability from farm to the first purchase point for their own purchases of cocoa, and will work with the governments of Côte d’Ivoire and Ghana to ensure an effective national framework for traceability for all traders in the supply chain.

Both countries have, along with the partnering companies, agreed through Frameworks for Action to accelerate investment in long-term sustainable production of cocoa, with an emphasis on “growing more cocoa on less land”. Key actions include provision of improved planting materials, training in sustainable agricultural practices, diversification into other crops, and development and capacity-building of farmers’ organizations. 

The World Bank’s agriculture, forest and climate teams are working together with the Cocoa and Forests Initiative, providing analytical and strategic support to Ghana and Cote d’Ivoire together with the Program on Forests (PROFOR), the BioCarbon Fund Initiative for Sustainable Forest Landscapes, and the Forest Carbon Partnership Facility. The IFC is providing advisory and grant support to strengthen cocoa cooperatives and train farmers, for example through its partnership with Cargill in Cote d’Ivoire.  

 

Expected Results

In both Ghana and Cote d’Ivoire, cocoa contributes significantly to GDP and provides livelihoods for about a quarter of the population. The Cocoa and Forests Initiative could improve the lives of millions and generate significant positive environmental returns by protecting forests. In Ghana alone, investments in more sustainable and resilient cocoa could increase cocoa yields by 50%, generating significant benefits for farmers and the government.

 

Key Facts & Figures

  • Agriculture can help reduce poverty, raise incomes and improve food security for 80% of the world's poor, who live in rural areas and work mainly in farming. 
  • Climate-smart agriculture refers to a range of proven and innovative practices that can deliver triple wins: increase productivity, strengthen climate resilience and reduce agriculture’s greenhouse gas emissions.  
  • Currently, agriculture, forestry and land use changes generate about 24% of the world’s greenhouse gases – and about 80% of deforestation worldwide is driven by agriculture. Rising food production will also increase the use of water by 40 – 50% in the coming decades.
  • Meeting growing global demand for food, fiber and biofuel will require an estimated 50% increase in agricultural production between 2013 and 2050, with large potential for job creation in the food sector in developing countries.
  • The World Bank is a leading financier of agriculture and related sectors, with $6.8 billion in new commitments in FY 2018. IFC investments were $4.5 billion in FY 2018.

 

Last Updated: Jan 24, 2019