Millennium Development Goals, agriculture and climate change

Thursday, April 19, 2007 5:12 PM by Martin Prowse

By Martin Prowse, Leo Peskett and Tim Braunholtz

The Millennium Development Goals

The Millennium Development Goals (MDGs), adopted in 2000 following the UN Millennium Declaration, set goals for global poverty reduction by 2015. With July 7th 2007 designated the official mid-point, the time is ripe to assess challenges to meeting these goals, and to look beyond them. In this blog we ask: how do the physical impacts of climate change affect the prospects for achieving the first goal, to halve world poverty?

At a global level, the latest UN MDG report argues that the proportion of people living in extreme poverty has fallen from 28% in 1990 to 19% in 2002 using the $1-a-day poverty line, suggesting that we may be on-track for success in 2015. However, as Kofi Annan noted last year, "progress has been uneven and the ongoing levels of human deprivation remain staggering". Dramatic improvements in agricultural and non-agricultural productivity have enabled structural economic change in Asia – industrialisation and urbanisation – that has driven global poverty reduction. In sub-Saharan Africa, however, there has been little or no progress on overall poverty rates since 1990.

Despite rising urbanisation, over sixty percent of people in Africa are reliant on agriculture for their income (see DfID 2005). Rural development remains key to Africa’s future growth (including underpinning any structural changes) and to poverty reduction now. There is hope: the latest UN MDG report suggests that "many sub-Saharan countries are now showing potential for long-term growth that could bring up standards of living" (p.4). However, we suggest here that the potential impacts of climate change pose a number of questions for current agriculture-led strategies to reduce poverty.

Climate change – certainty and uncertainty    

While the specifics of climate change are unclear and contested, with aggregate figures masking significant intra-continental variation, two general trends in sub-Saharan Africa are discernable from the literature. First, that episodes of heavy rainfall and drought are likely to become more frequent and severe, and that prediction of these events at a high level of resolution will remain difficult. Second, in the longer term, rises in temperature are expected to have negative impacts on crop yield and areas of cultivatable land.

In general, nearly all future scenarios indicate that Africa is expected to be worst hit. Some models predict up to a 9% decrease in potential agricultural land by the 2080s and reductions in yield of up 10% and 18% for cereals and maize respectively by 2050 (see: Fischer et al 2002; Parry et al 2004). A recent IPCC report concludes that yields from rain fed agriculture could fall by as much as 50% by 2020 in some areas. But the pathways of change are not straightforward. One clear example is the 'hill function': that the positive effects of higher temperatures and CO2 levels on crop yields (for carbon dioxide is a basic component of photosynthesis) reach an 'inflection point' after which further increases in temperature reduce yields. Such a trade-off differs across species and landscapes, with, for example, maize yields being particularly sensitive to increases in temperature because maize doesn't utilise higher CO2 levels effectively (Stern Report, Chapter Three). Improvements in crop varieties and wider agricultural technology might counteract reduced yields, especially as current figures are often way below optimal levels, but this is far from certain.

The increased frequency and severity of hot spells and heavy precipitation events are likely to have an impact on agricultural growth patterns in Africa much sooner. The recent IPCC report predicts such changes as ‘very likely’ with over 90% probability of occurrence, and certain observed events have already been attributed to human-induced climate change.

So, what implications do these changes have for agriculture-led poverty alleviation policies?

The challenges of climate change for agricultural policy     

Small farms and poverty reduction

Current approaches to poverty reduction, as exemplified by DfID’s (2005) Agriculture Policy Paper, highlight the critical role of agricultural productivity in stimulating agricultural growth and poverty reduction. This approach broadly adheres to the dominant ‘small-farm-first’ orthodoxy in rural development. Supported by the experience of Green Revolution productivity gains in South and South-East Asia, and based on the inverse relationship between farm size and productivity, the 'small-farm-first' school argues that labour-intensive smallholder-led increases in yields can address both growth and equity goals at once: directly (through income increases), and indirectly (through increased employment and demand for goods and services. Small farms are generally owned and operated by the poor, often use locally-hired labour, and distribute income within nearby locales, creating multipliers. Small farms also have advantages over large firms in certain types of transaction costs:  the supervision of labour, local knowledge, and food purchases and risk.  

The following section discusses three ways in which climate change might challenge this current policy approach: focussing on the ‘trigger’ for rural growth processes; the generation of a dynamic non-farm rural economy; and possible increases in geographical and horizontal inequalities. In highlighting these three questions, in a necessarily partial and incomplete manner, this blog hopes to stimulate a debate around the physical impacts of climate change and agriculture in sub-Saharan Africa.

‘Trigger’ for agricultural growth may be jeopardised

First, climate change raises a question about the source of agricultural growth. As explained in the DfID (2005) Agriculture Policy Paper (p.8), the relationship between land and labour productivity is crucial. For African countries in the early stages of the rural growth process, both land and labour productivity must rise, but land productivity must rise faster than labour productivity - to suck-up surplus labour, create employment, and stimulate demand for non-farm goods and services. Over and above arguments around whether the importation of this Asian-style agricultural model to the African context is suitable, and the influence of HIV/AIDs on the land and labour productivity ratio, in light of the projected decreases in agricultural land availability, and increases in low potential land, surely this ‘trigger’ for the rural growth process likely is less likely to occur in the context of climate change?

Unpredictable agriculture means growth multipliers may not work

Second, climate change poses a question about the likelihood of the ‘multipliers’ stemming from agricultural-led growth. Increases in farm-based income are closely linked with increases in non-farm income (e.g. from vending, petty trading, provision of everyday services) (see DfID p.15). This is especially pronounced from broad-based smallholder-led agricultural growth – local labour is hired, income is spent locally, across a wide area. However, the vital issue for a dynamic non-farm rural economy is that there must be consistent and stable increases in agricultural incomes – diversification into non-farm activities will only occur significantly when demand for goods and services at the end of agricultural cycles is regular and constant. As we have seen, the only certainty regarding climate change is increased variability, implying that agricultural growth patterns will become more capricious. What is the likelihood of sustaining non-farm rural growth where agricultural incomes are increasingly unpredictable?

Increased 'Low potential' lands may stimulate social and political conflict

Third, as outlined above, climate change will probably reduce the total area of arable land, and precipitate an increase in low-potential lands. Current low-potential areas often suffer from a multitude of disadvantages: high transaction costs with urban locations, a lack of good quality infrastructure, relatively low levels of human capital and institutions to foster it, often a lack of governance, and poorly functioning markets including credit. DfID's (2005) current approach appears to focus on maximising the gains from high potential areas, whilst low potential areas receive social protection that promotes agricultural growth processes. Such areas are often sources of substantial out-migration, and remittances are seen as a key channel for poverty reduction. However, there are very good reasons to ensure that ‘lagging regions’ are not left out of patterns of growth and poverty alleviation. Inequalities within countries – particularly caused by discrimination in public spending and taxation; high asset inequalities; and economic mismanagement and contraction – can contribute to a breakdown in the social contract between citizens and the state, especially when coinciding with regionally- or culturally-defined social boundaries (see Murshed 2006). With climate change predicted to increase the area of low-potential lands, and acknowledging that some lands which slide from being medium-potential areas to low potential will maintain relatively good infrastructure and institutions, should growth and poverty reduction policies be more attuned to the potential social and political costs of changing patterns of geographical and horizontal inequalities?

Conclusions

A mixed picture, but good grounds for concern

In outlining some of the potential impacts associated with current models of climate change, and the implications these have for agricultural-led poverty-reduction policy, we have ignored the opportunities that climate change might also bring. Increased meteorological variability might increase yields in particular locations, open up new cropping possibilities, and lead to reconfigured patterns of growth and trade that will benefit some. Moreover, there are substantial potential benefits from climate change mitigation, such as the production of bio-fuels. We do not wish to paint an overly-pessimistic picture regarding the impacts of climate change – there are good reasons to suggest that communities and systems may adapt to such a longue durée shift (within which there may be rapid moments of change). For example, we have not discussed potential responses to the impacts of climate change:  the agency and capacity of individuals to respond to altering climatic conditions. On the one hand, it might be the case that labour-intensive agricultural growth on small farms (the current DfID approach) could still occur in the context of climate change due to the high flexibility and adaptability of small farms, not least the experience of farmers in coping with variable climates. On the other hand, there are also reasons to think that small farms might struggle to adapt: small farms are often found on less productive land, and in marginal environments; and will clearly struggle if adaptation requires large financial costs.  Overall, we feel there are good reasons to be concerned.

Adaptation may be difficult in Africa

In the face of increased uncertainty and risk, two key adaptive responses at the country-level are diversification and flexibility. However, many sub-Saharan African countries are constrained in the extent to which they can adhere to these watchwords: path-dependence on conventional export crops, highly-limited opportunities to shift to manufactured exports (due to trade regulations and market conditions), and a high degree of competition within the limited number of diversification options available (the fallacy of composition argument), could mean that climate change might further ‘lock’ countries into cycles of low and fluctuating agricultural growth and limited poverty reduction.

So, what does this mean for current policy?

In short, this blog suggests that there might be a limited window of opportunity for current strategies for agricultural growth and poverty reduction to ‘trigger’ rural growth processes in sub-Saharan Africa. If climate change impacts are greater and sooner than previous models have suggested, it may only be a matter of two or three decades before it becomes much harder for agricultural growth and poverty reduction to be achieved using the approaches currently available.

If this is the case, it is a clear reason to double and redouble efforts at stimulating smallholder-driven rural growth processes and poverty reduction immediately. The implication of this is that governments and aid agencies must start to think beyond 2015. The MDG of halving poverty has always begged the question, ‘what about the other half?’. The predicted impacts of climate change pose a further question: if poverty is not reduced substantially in sub-Saharan countries by, say, 2025, then can poverty reduction using current strategies be achieved at all?