No. 5 - March 1996
No. 5 - Mars 1996
No. 5 - Marzo de 1996

In this issue:

• From the Director

• Environmental aspects of agricultural project design

• Afrique de l'ouest: Gestion participative des ressources naturelles et de la faune (GEPRENAF)

• The FYR of Macedonia: National environmental action plans

• Indonesia: Integrated pest management (IPM)

• America Latina: Conservación y protección del medio ambiente

• Environmental impact assessment

• Summary of activities / Résumé des activités / Resumen de actividades

• Investment Centre-assisted projects approved by financing institutions
  

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From the Director ...........

This UPDATE features recent environmental work by the FAO Investment Centre Division. The need to conserve the renewable natural resources on which the benefits of agricultural investments depend, and the realization that investment in long-term environmental sustainability can be economically justified in its own right, have led to a rapid expansion in environmental lending by multilateral financing institutions.

In cooperation with these institutions, the Investment Centre, backed by the extensive expertise of FAO's technical divisions, has played a growing role in assisting governments to develop the environmental aspects of their investment programmes. This issue of UPDATE summarizes relevant assistance to countries in preparing projects to manage wildlife, parks and protected areas; projects for integrated pest management, and the formulation of National Environmental Action Plans. Additional information is provided in the Centre's environmental brochure, available on request.

May I also call your attention to the back page of this UPDATE, covering current IC work and recent projects approved; 1995 saw some US$3.3 billion in total investment commitments, of which over US$2 billion in external loans, linked to the Centre's investment preparation assistance. The New Year brought the 1,000th IC-assisted project approved by the board of one of our partner funding institutions, in this case for the first project developed with EBRD.

David Forbes Watt

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Environmental aspects of agricultural project design

Since the 1980s, there have been fundamental changes in the way financing agencies and governments view the relationship between the environment and investment. It is now clearly recognized that investments in developments which erode natural capital are potentially damaging. Indeed, if planning does not take account of the state of critical natural resources such as water, soils, grassland, forests, coastal areas or fisheries, investments may not only fail but may degrade the base upon which future growth depends.

At the same time, investments in raising agricultural productivity and a healthy environment are not mutually incompatible. Correctly chosen natural resource management practices and environmental mitigation measures can combine to yield incremental benefits which are sustainable, while allowing natural capital to be conserved.

Ensuring that agricultural development conserves environmental capital is not only an ethical imperative or moral obligation to future generations: it also makes economic sense. As methods of environmental valuation have advanced, it is being increasingly demonstrated that investments which may have been justified when only their immediate costs were calculated, may be proved to be non-viable when the drawdown on environmental capital is also taken into account. Recent advances in environmental accounting have similarly shown how environmental protection per se can be a profitable area for investment. Since many of the benefits are achieved from public goods and services and may accrue only to future generations, key responsibility for such investments often falls on the public sector.

During this period of change, the environmental criteria which financing agencies apply to projects entering their lending programmes continue to evolve. Environmental concerns are now being incorporated into the planning process and project design stage and, hence, into the entire lending portfolio. Impact assessment and - where risks of negative impacts on the environment are identified - the design of mitigation measures, are now routine parts of the work of project design teams.

At the same time, there has been a notable increase in multilateral lending to governments specifically for projects with primarily environmental objectives, such as environmental protection and improved natural resource management, intended to pre-empt the potentially destructive effects of future population growth and development pressures. Illustrative of the magnitude of such lending, the World Bank has an active portfolio of approximately US$10 billion in projects mainly directed at improving environmental management.

A further important change has been the creation of a new funding source - the Global Environment Facility (GEF) - which was set up in 1991 to integrate global and national environmental concerns in the framework of national strategies for sustainable development. GEF provides grant and concessional funding to meet the incremental costs of measures which produce global environmental benefits. Since it first began until December 1995, some 150 projects, totalling US$920 million have been approved for financing.

The Investment Centre is actively strengthening its collaboration in the area of environment with the World Bank, regional banks, IFAD, EBRD, and other multilateral financing institutions, as well as initiating contacts with private banks such as the Bank of America. Discussions are continuing with GEF coordinators in the World Bank and UNDP regarding increased cooperation in the preparation of projects for GEF financing.

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Afrique de l'ouest: Gestion participative des ressources naturelles et de la faune (GEPRENAF)

Le Parc national de la Comoé, l'un des plus importants de l'Afrique de l'Ouest tant par la superficie que par la biodiversité des écosystèmes, est gravement menacé par l'immigration, les défrichements agricoles de plus en plus importants, et le braconnage. Si celui-ci continue dans le Parc, presque tous les moyens et gros mammifères auront disparu d'ici douze ans.

Sous les auspices du Fonds pour l'environnement mondial (FEM), le Centre d'investissement a préparé, avec les équipes nationales et les populations riveraines, un projet pilote visant à protéger environ 3 000 km2 de l'écosystème de la Comoé et couvrant trois sites en bordure du Parc national - deux en Côte d'Ivoire et un au Burkina Faso. Ces sites regroupent 53 villages et une population d'environ 20 000 personnes. Le montant total des investissements s'élève à 13,2 millions de $E.U., dont 7 m de $ E.U. du FEM, 4,4 m de $E.U. de la Belgique, 1,5 m de $E.U. des gouvernements des deux pays et 0,3 m de $E.U. de participation des populations locales.

L'objectif principal du projet est la conservation de la biodiversité par les collectivités riveraines des zones d'intervention, basée sur une gestion communautaire et une exploitation durable de la faune et des ressources naturelles. Ceci assurerait en même temps la protection de l'environnement et le développement économique des zones concernées. Cette approche se base sur la connaissance qu'ont les populations rurales de leurs terroirs et de leurs ressources, de leurs besoins et priorités, et des solutions possibles à envisager. Certaines zones, non peuplées ou cultivées, seront démarquées, en collaboration avec les populations riveraines, comme zones cynégétiques et de biodiversité.

Le projet assistera les collectivités concernées à mieux gérer leurs ressources cynégétiques et à valoriser les ressources forestières en améliorant leur collecte, transformation et commercialisation. Le projet développera, sans toutefois les financer directement, l'écotourisme et les safaris, dûment contrôlés, pour accroître les revenus des collectivités concernées tout en les sensibilisant à l'effort de conservation. Par ailleurs, des investissements pour l'aménagement des zones agro-pastorales seront effectués par les communautés concernées au travers d'une approche de "gestion des terroirs villageois".

En outre, le projet développera progressivement les compétences des populations concernées et leur capacité de gestion et de prise de décision. Des organisations villageoises locales et, par la suite, des Associations de gestion des ressources naturelles et de la faune (AGEREF) seront établies pour prendre en charge progressivement les interventions et la gestion du projet.

L'Union internationale pour la conservation de la nature (UICN) fournira une supervision technique et conseillera les deux gouvernements et les AGEREF. Si cette aproche s'avère efficace, elle pourrait être reproduite, avec les modifications nécessaires, sur d'autres sites de la sous-région.

Vanda Altarelli, FAO IC

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The FYR of Macedonia: National environmental action plans

National Environmental Action Plans (NEAPs) are strategies which describe a country's major environmental concerns, characterize the principal causes of these problems, and formulate policies and actions to address them. World Bank policy requires the preparation of NEAPs by all borrowing countries.

The NEAPs' role is three-fold: they present a strategic framework within which to plan and identify priority actions to address environmental issues, they provide a credible basis for assessing environmental investment priorities with the Bank and other donors, and they can serve as a valuable reference document for donors to be used in preparing their lending programmes. The Investment Centre has provided assistance to governments in the preparation of NEAPs since 1993.

Currently, the Centre is working with The Former Yugoslav Republic (FYR) of Macedonia's Ministry of Urban Planning, Construction, and Environment (MUPCE) in the development of a NEAP. Local preparation began in April 1995 and has involved the formation of 13 working groups covering air and water quality, water resources, industrial issues, agriculture, forestry, biodiversity, public health, demography, tourism and cultural heritage issues, economic policy, legal and institutional issues, and public participation.

These groups, composed of members from the country's research and academic communities, government agencies and NGOs, have prepared technical working papers which have been the subject of a national workshop. Based on these documents, inputs obtained from the workshop, and observations and views obtained from an inter-ministerial steering committee and independent NGOs, a synthesis document is currently under preparation which will be the subject of a second national workshop to be held in Skopje in early April.

Following this, it is envisaged that a leading association of the country's environmental NGOs will be contracted to launch a public awareness and consultation campaign to build support for the NEAP as well as to obtain additional comments on the draft document.

After the public consultation process, and before the NEAP is approved by Parliament, it will be reviewed and commented upon by the Cabinet and by the Parliamentary Commission for the Environment, and formally submitted by MUPCE to the Parliament. The process is scheduled to be completed by August 1996.

Contact: Random DuBois (random.dubois@fao.org)

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Indonesia: Integrated pest management (IPM)

The on-going World Bank supported IPM project for rice production, which started in 1993, aims at training more than 600,000 farmers in the use of IPM techniques. The evolution of the project provides a good example of how scientific research can lead to effective technical assistance, which in turn can be developed into an investment project.

Research work undertaken by the International Rice Research Institute in the early 1980s in the Philippines and Indonesia demonstrated that the use of pesticides to control brown plant hopper (BPH) in rice actually contributed to subsequent outbreaks of the pest by suppressing natural predators.

At first, the findings were consigned largely to the pages of scientific journals. In the mid 1980s, however, over 100,000 ha of rice in Indonesia were destroyed by outbreaks of BPH. The government called in FAO scientists for advice. Investigations showed that the outbreaks were due to excessive pesticide use and the development of virulent strains of BPH, against which the most popular rice varieties no longer had genetic resistance. FAO's advice proved crucial. More than 50 pesticides were banned, and a crash training programme to re-educate extension agents and farmers not to rely solely on pesticides was set up.

This re-training programme was the focus of a USAID-funded, FAO-executed Technical Assistance project that pioneered the use of experiential learning methods. Under the programme, extension workers and farmers were taught the principles of IPM. Within a season, outbreaks of BPH ceased to be a problem in those areas where farmers adopted IPM techniques. The FAO Investment Centre subsequently designed a project for WB and USAID funding with a total value of US$ 53 million to train extension agents and farmers in IPM technologies.

Recently, in preparing a US$ 62 million project for funding by the Asian Development Bank, the Investment Centre has extrapolated this successful experience to the smallholder estate crop sector, mainly perennials such as coffee, cocoa, tea and pepper.

Perennial estate crops and the farming systems within which they are grown, however, are different from the typical "rice bowl" of Indonesia, and this required substantial adaptation of the rice IPM model. The crop cycle training system which worked so well in rice, cannot be readily applied to perennial crops. Consequently, whilst the IPM training programme is practical and field based, it covers the full year, and is modular in form, so as to be flexible enough to address pest and disease problems as they arise. It also focuses on existing estate crop development areas, to protect prior investments.

Many non-pesticide solutions to estate crop pest and disease problems already exist, and the project places emphasis on improving information flows; it also supports long term research to develop and adapt IPM technologies, and the involvement of farmers themselves in identifying problems and testing new technologies. In addition, it promotes the modification of estate crop development policies to include IPM. The project will train over 320,000 farmers and cover over 192,000 ha of smallholder estate crops over a five-year period.

Contact: 
Charles Bevan (charles.bevan@fao.org) or
Michael Wales (michael.wales@fao.org)

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America Latina: Conservación y protección del medio ambiente

El Centro de Inversiones ha estado asociado de manera creciente en la preparación de proyectos dirigidos a la conservación de la biodiversidad y al manejo de áreas protegidas.

En Argentina, se está colaborando en la preparación del componente de parques a ser incluido en un proyecto de inversión que se sometería a financiación parcial del Banco Mundial (Proyecto de Bosques Nativos y Areas Protegidas). Con el apoyo del Fondo Fiduciario Japonés, se formulará una estrategia para modernizar y transformar la Administración de Parques Nacionales (APN).

Entre los temas a ser abordados se incluyen reformas legales e institucionales, identificación de la mejor combinación de responsabilidades entre la APN y el sector privado en el manejo de parques, y el control de acceso, incremento y diversificación de las fuentes de ingresos con miras a aumentar la sustentabilidad financiera del sistema. El apoyo en infraestructura se centrará en cuatro parques nacionales en el sur del país, seleccionados por su potencial turístico y por la existencia de infraestructura y biodiversidad. El costo del componente se estima en US$15 millones en cinco años.

En Colombia, el Centro asistió en la preparación de un proyecto de Manejo de Recursos Naturales, con el propósito de frenar la degradación de los recursos naturales renovables en áreas prioritarias. Las actividades claves incluyen el diseño de un marco de politica ambiental, manejo y rehabilitación de cuencas, manejo de parques nacionales, investigación, fomento y educación ambiental y desarrollo institucional.

Las actividades del proyecto están focalizadas en La Cordillera Occidental y en la Costa Pacífica. En la primera, el proyecto incluye 140 000 hectáreas de cuencas críticas y, en la segunda, nueve parques nacionales prioritarios. Para asegurar la participación plena de las comunidads rurales se formuló un Plan de Desarrollo Comunitario e Indígena y se diseño un sistema de seguimiento ambiental. El proyecto cuenta con el apoyo financiero del Banco Mundial y tiene un costo de US$65,3 millones en cinco años.

El Centro de Inversiones está apo-yando la preparación de proyectos similares en Honduras, México, Trinidad y Tabago y Venezuela. El costo total de estos proyectos es de alrededor de US$145 millones.

Contact:
Random DuBois (random.dubois@fao.org) or
Richard Owen (richard.owen@fao.org)

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Environmental impact assessment

The staff of the Investment Centre, as part of their assistance with project design, cover both initial evaluation of environmental conditions and possible positive and negative impacts of proposed investments, as well as the design of mitigation measures in the case of medium-risk investment proposals. Where a full Environmental Impact Assessment is needed, the Centre is able to draw up terms of reference and oversee studies which are normally executed by more specialized institutions or consultants. In this work, extensive use is made of the environmental guidelines in which the requirements of the prospective funding agency are specified.

Recent or ongoing environmental impact assessments by the Investment Centre for different governments and financing agencies cover: Kenya (Nzoia Sugar Scheme, AfDB), Tanzania (Zanzibar Fisheries, AfDB), China (Quinghai/Hainan Prefecture Agricultural Development, IFAD), Mongolia (Agriculture, Processing, Storage and Distribution, AsDB), Vietnam (Irrigation Rehabilitation, WB, and Forestry Sector and Watershed Management, AsDB), Albania (Forestry, WB), Iran (Sistan Irrigation and Drainage, WB) and Argentina (Desarrollo Agrícola Provincial, WB).

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Summary of activities
Résumé des activités
Resumen de actividades

(November 1995-February 1996)
(Novembre 1995-Février 1996)
(Noviembre de 1995-Febrero de 1996)

AFRICA

The Centre assisted the design of projects prepared under FAO's Special Programme in Support of Food Security, especially low-cost irrigation components, in Burkina Faso, Kenya, Mauritania, Senegal and Tanzania, and implementation of the programme in Eritrea. Reviews of have been initiated of agricultural recovery and development options in Angola under FAO's Technical Cooperation Programme and of food aid in Central African Republic (WFP); several investment possibilities have been identified in Angola, Central African Republic and Madagascar for possible AfDB financing and a review of on-going and planned AfDB activities was carried out in Ethiopia.

Project formulation included agricultural development in Benin, Togo and Uganda (AfDB), Lesotho and Senegal (IFAD); irrigation in Burkina Faso and Senegal (WB); agricultural research in Madagascar; agricultural services in Cameroon and Togo (WB); fisheries in Chad and Eritrea (AfDB); environmental/natural resources management/forestry in Benin, Malawi, Mozambique (WB), Senegal and Zambia (AfDB); development of refugee areas in Tanzania (bilateral donors); livestock development in Eritrea (AfDB) and Mozambique (WB).

A study has been undertaken on sugar in Gabon (Government). In addition, the Centre participated in project supervision or evaluation in Ethiopia, Guinea, Malawi, Niger, Nigeria, Senegal, and Sudan and appraisal in Togo.

ASIA AND THE PACIFIC

Implementation assistance was given to Nepal under FAO's Special Programme in Support of Food Security. Formulation work covered sericulture in Bangladesh (WB); integrated agricultural development in Sichuan Province of China (IFAD/WFP); agricultural diversification, water resource management and irrigation in India (WB); irrigation in Mongolia and forestry/watershed protection in Viet Nam (AsDB).

The Centre participated in preparation of a seed programme in Cambodia (WB), identification of possibilities for crop diversification in Fiji (AsDB), project appraisal in Indonesia (AsDB), loan negotiation in Lao, design of a rural development strategy in Philippines (WB) and supervision/evaluation of WB projects in Bangladesh, Pakistan, Sri Lanka, Thailand and Viet Nam.

LATIN AMERICA AND CARIBBEAN

Arrangements were made for joint operations with IDB. The Centre helped draw up the Plan of Operations for the project in Haiti prepared under FAO's Special Programme in Support of Food Security. Discussions were held in Guatemala regarding Central American Bank for Economic Integration (CABEI) support for a food security investment project.

A joint fact-finding mission examined options for water resources management in the Windward Islands for possible Caribbean Development Bank funding. Project formulation work included poverty alleviation in Argentina, Brazil, Mexico (WB), Colombia, Guatemala and Venezuela (IFAD); natural resources/environmental protection in Argentina, Honduras, Mexico, and Peru; provincial development in Argentina; water management in Brazil and Chile; agricultural support services in Jamaica and sustainable development in Mexico (WB). The Centre participated in supervision of WB projects in Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Mexico and Nicaragua.

NEAR EAST AND NORTH AFRICA

Project formulation included natural resources management in the northwestern desert (WFP/WB/GOE) and agricultural development (WB) in Egypt; agricultural research in Kyrgyz Republic, water supply in Morocco, natural resource management in Tunisia and a study of groundwater use in Yemen (WB). The Centre participated in supervision/evaluation of WB projects in Morocco, Tunisia and Yemen.

EUROPE

In Bosnia-Herzegovina the Centre assisted formulation of programmes for emergency imports, farm reconstruction and forestry/pasture development (WB). Preparation continued for private wholesale markets in Croatia (EBRD) and Poland (WB); for irrigation restructuring and an Environmental Action Plan in The FYR of Macedonia and irrigation in Moldova (WB). The Centre also helped prepare environmental aspects of a proposed WB agricultural sector loan to Croatia and participated in WB missions to Armenia and Georgia to support agricultural development.

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Investment Centre-assisted projects approved by financing institutions

During November 1995-February 1996, 12 projects formulated with substantial inputs from the Investment Centre were approved by financing institutions, for total investments of US$800 million: ANGOLA: Foodcrops Development US$18.2 million, of which IFAD US$13.4 million, Belgium US$3 million, Government US$1.8 million; ARGENTINA: Desarrollo Forestal 26 millones de $EE.UU, de los cuales 16 millones del BM, 10 millones del Gobierno; ARMENIA: Wholesale Markets US$24.3 million, of which EBRD US$15 million, UK US$2.6 million, local investors US$6.7 million; BENIN: Activités génératrices de revenus 14,3 millions de $E.U., dont FIDA 12 millions, DANIDA 1,2 million, gouvernement/ bénéficiaires 1,1 million; BRAZIL: Community Development US$40.4 million, of which IFAD US$20.1 million, Government/beneficiaries US$20.3 million; CHILE: Secano - Alivio a la pobreza rural 35 millones de $EE.UU., de los cuales 15 millones del BM, 20 millones del Gobierno; CHINA: Soil Conservation and Rural Development US$163 million, of which AsDB US$65 million, domestic banks/beneficiaries US$98 million; CHINA: Integrated Agricultural Development US$48.8 million, of which IFAD US$23.8 million, Government/beneficiaries US$25 million; INDIA: Water Consolidation US$345.5 million, of which IDA US$290.9 million, Government/farmers US$54.6 million; NIGER: Programme intégré de gestion des ressources naturelles 42,7 millions de $E.U., dont IDA 26,7 millions, Danemark $5 millions, Norvège 3,7 millions, gouvernement/bénéficiaires 7,3 millions; PARAGUAY: Fondo de Desarrollo Campesino 22 millones de $EE.UU, de los cuales 10 millones del FIDA, 8 millones del Gobierno/beneficiarios, cofinanciamiento 4 millones; TANZANIA: Regional Development US$19.4 million, of which IFAD US$14.4 million, DANIDA US$2.2 million, Government/beneficiaries/District Council US$2.8 million.