Agricultural Development Through Agricultural Development Through the Climate Change Lens in Eastthe Climate Change Lens in East
Agricultural Development Through Agricultural Development Through the Climate Change Lens in Eastthe Climate Change Lens in Eastthe Climate Change Lens in East the Climate Change Lens in East
Asia and the PacificAsia and the Pacificthe Climate Change Lens in East the Climate Change Lens in East
Asia and the PacificAsia and the Pacific(EAP)(EAP)(EAP)(EAP)
Magda LoveiSector ManagerS i l E i d R l D lSocial, Environment, and Rural DevelopmentEast Asia and Pacific Region
I A i l i R idl Ch iI A i l i R idl Ch iI A i l i R idl Ch iI A i l i R idl Ch iI. Agriculture in a Rapidly ChangingI. Agriculture in a Rapidly ChangingContextContext——a Snapshot a Snapshot
I. Agriculture in a Rapidly ChangingI. Agriculture in a Rapidly ChangingContextContext——a Snapshot a Snapshot pppp
Regional Food YieldRegional Food Yield TrendsTrends
Production of plant food calories per hectare of cultivated land (kcal/ha/day)
Global food yields have stagnated since 1995
Graph produced by Agrimonde 2009
Land ConstrainsLand Constrains
•• EAP has the lowest available EAP has the lowest available cropland per capita cropland per capita
•• 87% of the global small87% of the global small‐‐holding holding farmers are in Asia (500 million farmers are in Asia (500 million with less than 2 hectares) with less than 2 hectares)
•• Increasingly smaller farmsIncreasingly smaller farms——average farm size has declined:average farm size has declined:gg•• 0.56 ha to 0.40 ha in China (19800.56 ha to 0.40 ha in China (1980‐‐
99)99)•• 3.6 ha to 2.0 ha in Philippines (19713.6 ha to 2.0 ha in Philippines (1971‐‐
91)91)91)91)•• 3.8 ha to 3.4 ha in Thailand (19783.8 ha to 3.4 ha in Thailand (1978‐‐
93)93)
Water Constrains Water Constrains
•• Physical water Physical water shortage in Chinashortage in Chinashortage in China shortage in China ((270m people at risk in 270m people at risk in Western China)Western China)
•• Economic water Economic water h t ih t ishortages in shortages in Vietnam, Cambodia, Vietnam, Cambodia, Myanmar and LaosMyanmar and LaosMyanmar and LaosMyanmar and Laos
Food Price Volatility Food Price Volatility
•• Significant impactSignificant impact•• Significant impact Significant impact on $1 per day poor on $1 per day poor for whom food for whom food typically representstypically representstypically represents typically represents 65% of 65% of expendituresexpenditures
•• Limited supply Limited supply response and low response and low reserve stocks reserve stocks creating increasing creating increasing vulnerability to vulnerability to
l il iexternal price external price shocks shocks
Source: IFC 2012
Regional Transformations Regional Transformations
•• Increasing economic growth and wealth, but rising Increasing economic growth and wealth, but rising inequalityinequality
•• Increasing population (11% growth between 2010Increasing population (11% growth between 2010 ‐‐2020)2020)Increasing population (11% growth between 2010 Increasing population (11% growth between 2010 2020), 2020), but declining rural share but declining rural share • Urban areas are expected to expand from around 38% of population
at present to 62% by 2030 p y•• Rapid urbanization and economic concentration, lagging Rapid urbanization and economic concentration, lagging
regions emergeregions emerge– Urban areas are engines of economic growth but need inputs from– Urban areas are engines of economic growth, but need inputs from
rural: • Bangkok, Hanoi + Ho Chi Min City contribute to > 50% of GDP
•• Changing consumption patternsChanging consumption patternsChanging consumption patterns Changing consumption patterns – More meat, vegetables and high value products – Higher quality and safety requirements
Implications of RuralImplications of Rural‐‐Urban Urban TransformationTransformationTransformationTransformation
Labor
FoodFood
W tWater
Land
Public Budget
Looking Forward: Development Imperatives Looking Forward: Development Imperatives
•• Rapidly modernize agricultural Rapidly modernize agricultural productionproduction to support to support intensification and links with intensification and links with integrated supply chainsintegrated supply chains
Modern Modern agricultural agricultural developmentdevelopment integrated supply chainsintegrated supply chains
•• StrengthenStrengthen environmental environmental t i bilitt i bilit th hth h
pp
SustainableSustainablesustainability sustainability through more through more production with less water and production with less water and land, and increased provision of land, and increased provision of environmental servicesenvironmental services
natural resource natural resource managementmanagement
environmental servicesenvironmental services
•• Integrate the poorIntegrate the poor and lagging and lagging regions and countries into rapidregions and countries into rapidIntegrated Integrated rruralural regions and countries into rapid regions and countries into rapid development processdevelopment process
ggdevelopmentdevelopment
II Th I li ti f Cli tII Th I li ti f Cli tII Th I li ti f Cli tII Th I li ti f Cli tII. The Implications of Climate II. The Implications of Climate ChangeChange
II. The Implications of Climate II. The Implications of Climate ChangeChange
Climate Change From 1880 to 2011Climate Change From 1880 to 2011
Source: NASA
Climate Change FactoidsClimate Change Factoids
•• EAP has 13 of the 30 most EAP has 13 of the 30 most climate changeclimate change‐‐affected affected countries globallycountries globally
Annual cost to developing countries of adapting to a 2oC warmer world between 2010‐2050 (by sectors, region, $ billion)
countries globallycountries globally
•• Large number of people are Large number of people are affected by cultivated land lossaffected by cultivated land lossaffected by cultivated land loss affected by cultivated land loss and coastal impacts and coastal impacts –– 130 m people at risk in China 130 m people at risk in China
40 m people at risk in Viet Nam40 m people at risk in Viet Nam–– 40 m people at risk in Viet Nam 40 m people at risk in Viet Nam –– 2 m people at risk on Pacific 2 m people at risk on Pacific
islandsislands
•• Increased pest outbreaks Increased pest outbreaks projected projected
Projected Change in Agricultural Projected Change in Agricultural Productivity Due to Climate Change (2080Productivity Due to Climate Change (2080))Productivity Due to Climate Change (2080Productivity Due to Climate Change (2080))
Agriculture’s Role in MitigationAgriculture’s Role in Mitigation
•• Agriculture is responsible Agriculture is responsible for 13 5% of global greenfor 13 5% of global greenfor 13.5% of global green for 13.5% of global green house emissionshouse emissions
•• Primary source of global Primary source of global methane (40%) and methane (40%) and nitrous oxide (62%)nitrous oxide (62%)nitrous oxide (62%)nitrous oxide (62%)
•• Deforestation and landDeforestation and land
Source: IPCC 2007
Deforestation and land Deforestation and land use change are major use change are major contributors contributors
REDDREDD
•• New impetus for New impetus for sustainable forest sustainable forest managementmanagement
Indonesia a significant emitter due to forestry and land use changemanagementmanagement
•• Renewed attention to Renewed attention to forest management forest management
y g
Energy emissions lower,
fundamentals fundamentals (governance, land (governance, land tenure, land usetenure, land use
but growing fast
tenure, land use tenure, land use planning)planning)
•• New financial resources New financial resources S PT P E A C E 2007 il d f IEA’ 2005 lSource: PT P.E.A.C.E., 2007 compiled from IEA’s 2005 annual statistics, US EPA 2006, and Houghton 2003. If EU included, Indonesia stands 4th. Estimate subject to uncertainty.
Looking forward:Looking forward:Opportunities for Agriculture & NRM Opportunities for Agriculture & NRM pp gpp g
•• “Climate“Climate‐‐smart” agriculture: simultaneous pursuit of 3 smart” agriculture: simultaneous pursuit of 3 interlinked objectivesinterlinked objectives–– Improved productivity and food securityImproved productivity and food securityImproved productivity and food securityImproved productivity and food security–– Enhanced resilience to drought, floods, erosion, heat, and water Enhanced resilience to drought, floods, erosion, heat, and water
stressstress–– Low carbon growthLow carbon growthLow carbon growthLow carbon growth
•• Key elements:Key elements:–– LandscapeLandscape‐‐based approachesbased approaches–– Water conservation and harvestingWater conservation and harvesting–– Water conservation and harvesting Water conservation and harvesting –– Genetic resources Genetic resources
•• Important conditions:Important conditions:E h d i lt l hE h d i lt l h–– Enhanced agricultural researchEnhanced agricultural research
–– Adaptive management Adaptive management –– Innovation and continuous learning through testing new approaches Innovation and continuous learning through testing new approaches
III W ld B k A i t tIII W ld B k A i t tIII W ld B k A i t tIII W ld B k A i t tIII. World Bank Assistance to III. World Bank Assistance to Countries in EAP Countries in EAP
III. World Bank Assistance to III. World Bank Assistance to Countries in EAP Countries in EAP
Strategic FrameworksStrategic Frameworks
•• Analytical framework:Analytical framework:–– WDRs 2008: Agriculture for DevelopmentWDRs 2008: Agriculture for Development–– WDR 2010: Development and Climate ChangeWDR 2010: Development and Climate ChangeWDR 2010: Development and Climate Change WDR 2010: Development and Climate Change
•• Strategic frameworks for implementation : Strategic frameworks for implementation : –– Agriculture Action Plan Agriculture Action Plan
Strategic Framework for Development andStrategic Framework for Development and–– Strategic Framework for Development and Strategic Framework for Development and Climate ChangeClimate Change
•• IDA16 targets:IDA16 targets:V l bilit t i ll CASV l bilit t i ll CAS Vulnerability assessment in all CASsVulnerability assessment in all CASs
ScaleScale‐‐up of CC analytical and advisory activitiesup of CC analytical and advisory activities Analysis of projects in climate sensitive sectors Analysis of projects in climate sensitive sectors Monitor investments with CC benefits/coMonitor investments with CC benefits/co Monitor investments with CC benefits/coMonitor investments with CC benefits/co‐‐
benefitsbenefits
ARD Lending Portfolio FY02ARD Lending Portfolio FY02‐‐1111
4,000
FY02‐11 Bankwide Lending under ARD Sector Board by Region
(Commitment Amt, US$m)
•• BankBank‐‐wide ARD share: 12% wide ARD share: 12% (no of projects), 8% (no of projects), 8%
2,500
3,000
3,500 (commitment amount)(commitment amount)
•• EAP 3EAP 3rdrd largest largest BankwideBankwide
L t l di iL t l di i
1,000
1,500
2,000 •• Largest lending programs in Largest lending programs in
EAP:EAP:₋₋ China (41%)China (41%)
‐
500
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
₋₋ Vietnam (32%)Vietnam (32%)
₋₋ Indonesia (12%)Indonesia (12%)
hili i ( %)hili i ( %) AFR EAP ECA LCR MNA OTH SAR₋₋ Philippines (8%)Philippines (8%)
Portfolio CharacteristicsPortfolio Characteristics
•• WRM has highest share in WRM has highest share in the portfolio the portfolio 14
16
EAP ARD Portfolio by Thematic Cluster (No. of Projects), FY02, 07, and 12
•• Share of WRM and CRM Share of WRM and CRM has increasedhas increased
Sh f l d d tSh f l d d t 8
10
12
FY02
•• Share of land and poverty Share of land and poverty reduction projects has reduction projects has declineddeclined
4
6
FY07
FY12
•• Decreased total no. of Decreased total no. of projects and volume projects and volume
0
2
AGB ART CRM DRM LAND NRM RFIN RPV WRM
Legend: ART : Agriculture Technology, NRM: Natural Resource M t/F t LAND L d AGB A ib i /AManagement/Forestry , LAND: Land, AGB: Agribusiness/Access to Markets, RFIN: Rural Finance, RPV: CDD/Rural Poverty/Lagging Regions, CRM: Coastal Resources Management, WRM:Water Resource Management/Irrigation, DRM: Disaster Risk Management
Lending Pipeline FY12Lending Pipeline FY12‐‐1313
FY12‐13 Pipeline under ARD Sector Board by Region(% of Commitment Amt, US$m)•• Share of ARD in Share of ARD in
BankwideBankwide lending to lending to l h ll h l
AFR
increase slightly to 13% increase slightly to 13% (no. of projects) and 11% (no. of projects) and 11% (volume)(volume)
AFR22%
SAR37%•• EAP is expected to EAP is expected to
deliver 9 projects/yeardeliver 9 projects/year EAP11%
ECA5%
deliver 9 projects/year deliver 9 projects/year with an average with an average commitment of about commitment of about $600m/year$600m/year LCR
20%
MNA5%
OTH0%
$600m/year$600m/year
Analytical and Advisory AssistanceAnalytical and Advisory Assistance
•• ARD’s share of BankARD’s share of Bank‐‐wide wide AAA is 6%, but declined AAA is 6%, but declined 18
FY02‐11 EAP AAA Tasks under ARD Sector Board by Country (No. of Products)
WS
during FY02during FY02‐‐1111
•• ARD AAA’s share in EAP ARD AAA’s share in EAP 12
14
16VN
TP
SB
PW
PH
during FY02during FY02‐‐11 was 7% on 11 was 7% on averageaverage
•• Largest programs: ChinaLargest programs: China8
10
12 PH
PG
MY
MN
LA
KH•• Largest programs: China, Largest programs: China, Vietnam, and IndonesiaVietnam, and Indonesia
2
4
6KH
ID
CN
4P
4M
0
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
4E
Special Financial InstrumentsSpecial Financial Instruments
•• Agriculture: Agriculture: –– Global Food Crisis Response Program (GFRP)Global Food Crisis Response Program (GFRP)Gl b l A i lt d F d S it P (GAFSP)Gl b l A i lt d F d S it P (GAFSP)–– Global Agriculture and Food Security Program (GAFSP)Global Agriculture and Food Security Program (GAFSP)
•• Climate change:Climate change:–– GEF window for climate change, and Least Developed GEF window for climate change, and Least Developed g pg pCountry Fund Country Fund
–– Adaptation Fund Adaptation Fund –– Pilot Program for Climate Resilience (PPCR) and Forest Pilot Program for Climate Resilience (PPCR) and Forest g ( )g ( )Investment Fund (FIP) under the Climate Investment Funds Investment Fund (FIP) under the Climate Investment Funds (CIFs)(CIFs)
–– Forest Carbon Partnership FacilityForest Carbon Partnership Facilityp yp y–– Bilateral initiatives (e.g. Norway Letter of Intent in Bilateral initiatives (e.g. Norway Letter of Intent in Indonesia)Indonesia)
Differentiated Strategy Differentiated Strategy
Looking ForwardLooking Forward
•• Increasingly complex Increasingly complex development challengesdevelopment challenges
•• Look for innovative new Look for innovative new approaches approaches
•• Growing sophistication of Growing sophistication of clients clients
•• Use mix of tools including Use mix of tools including policypolicy‐‐based and based and
•• Diversity of development Diversity of development assistance landscapeassistance landscape
p yp yprogrammaticprogrammatic
•• Leverage special Leverage special financing mechanismsfinancing mechanismsassistance landscape assistance landscape
•• More active private More active private
financing mechanisms financing mechanisms and partnershipsand partnerships
ppsector sector •• Use PPPs more actively Use PPPs more actively