The concept of SARD
Policy objectives
Policy framework
Why policy intervention is necessary
Strategic issues
Policy instruments
Policy programming
The FAO Council has defined sustainable agriculture and rural development (SARD) as:
... the management and conservation of the natural resource base, and the orientation of technological and institutional change in such a manner as to ensure the attainment and continued satisfaction of human needs for present and future generations. Such sustainable development (in the agriculture, forestry and fisheries sectors) conserves land, water, plant and animal genetic resources, is environmentally non-degrading, technically appropriate, economically viable and socially acceptable (FAO 1989).
The focus is on the sustainable welfare of humans, living now and those not yet born. In other words, it is about sustainable livelihoods, now and in the future.
A principle of sustainability is that we pass on to the next generation a stock of resources that is at least as productive as the stock we have today. However, since it is neither necessary nor rational to strive to make every sub-system sustainable, this principle needs to be applied at the highest relevant system level. It is also not necessary and not even possible to pass on an enhanced stock of every type of resource. Substitution of resources will be possible as future generations substitute resources that are relatively more abundant for those that have grown scarce. In agriculture, the substitution of human capital - in the shape of knowledge about improved technologies - for land and labour, has been important in the past and will be at least as important in the future.
Policy objectives for SARD may be summed up as the pursuit of the goals of growth, equity, efficiency and sustainability. Growth is important to meet the food needs of growing populations with rising incomes and to provide continued sustainable livelihoods for rural people in the future. Equity is important in terms of the relief of poverty and deprivation for this and future generations. Efficiency matters since we cannot afford to waste resources. Finally, sustainability is the objective that has come into increased prominence with the recognition of the significant threats that exist to future welfare and the environment. Sustainability has many dimensions and interpretations but, in the context of agriculture, embraces food security, responsibility in resource use and environmental management, and the resilience of production systems to shocks and challenges.
There is interdependence between each of these four objectives, so that the pursuit of SARD requires an integrated approach to policy making in which all four aspects are considered.
There needs to be an appropriate framework in place for the formulation and effective implementation of policies for SARD. Elements of this framework include:
· Taking a long-term, global perspective.· Implementing complementary sectoral and macro-economic policies.
· Developing coordinated and consistent policies within the agricultural sector.
· Having an appropriate legal and institutional structure in place.
· Following an approach in which the inherent uncertainties of planning for SARD are recognized and accommodated.
· Taking an adaptive, inter-disciplinary and multi-disciplinary 'systems approach' to policy planning.
Policy intervention for SARD is necessary because of market and policy failures. Markets fail when prices do not reflect the real values of resources, goods or services. That means that producers and consumers get the wrong signals about relative scarcities. Sources of market failure include attenuated property rights, externalities, imperfect information, monopolistic competition, and imperfect and distorted capital markets. A form of market failure especially important for SARD is unequal market power, whereby the needs of the poor are swamped by the greater purchasing power of the rich. This inequality is especially severe in relation to the needs of poor people yet unborn and substantially neglected in today's markets.
The existence of market failure does not automatically justify policy interventions. Policy interventions are often ill-conceived or inadequately implemented so that their impacts are at best ineffective and at worst may be contrary to intentions. Command and control measures directed towards SARD have a poor record of success. When intervention is needed, therefore, it is best to look first at changing incentives to encourage behaviour in line with the sustainability principle. On occasion, of course, control measures, or even direct action by government agencies, may be the best approach, perhaps the only one possible.
A strategy is the way the policy campaign is managed. The following steps should be kept in mind when outlining such a strategy:
· Consistency with national objectives, including the identification and, where possible, the resolution of conflicting objectives.· Identifying overall goals of strategies, consistent with national goals, but narrowed to be operationally meaningful.
· Identifying components of the strategy, meaning the bundle of measures that must be taken to attain the stated objectives.
· Identifying areas of intervention, that is, deciding what is the proper role for government in promoting SARD.
· Identifying investment strategies, which follows from the previous point; many forms of intervention will require capital injection into, say, infrastructure, and it will be necessary to plan the nature, scale and timing of the required investments.
Key strategic issues to be addressed include: the emphasis to be placed on economic growth versus other objectives that may be seen as more directly related to SARD; the balance between reliance on market-based incentives versus command and control measures; and the priority to be given to 'top down' versus 'bottom up' approaches.
While growth of agriculture is necessary for SARD, the choice of a growth strategy requires policy attention to the question of how that growth can be achieved without degrading agricultural resources or the environment. Specific practices and approaches, such as integrated pest management and responsible fisheries may allow more intensive and more sustainable production. Such approaches need to be identified, developed and promoted. Attention also needs to be given to opportunities to exploit substitution possibilities in production in order to account for relative resource scarcities.
A key element of a strategy for SARD is to try to provide the appropriate incentives by getting prices right. Sometimes it is possible to devise policy instruments to substitute for missing or imperfect markets, to create markets where none existed before, or to make existing markets work better. However, where such interventions are not possible, it is still important that policy makers seek to use the 'right' prices in evaluating the impacts of interventions. Essentially, that means using prices in agricultural project appraisals that reflect, so far as possible, the true costs and benefits of the alternatives considered to present and future generations. Similarly, resource accounting methods have been developed to give a better representation in national income calculations of changes in levels of resource stocks and environmental quality.
SARD is not wholly or even mainly a matter for policy makers. In most countries, it is the farmers, forest people and fisherfolk who are responsible for most of the resource utilization decisions that affect SARD. Their participation is therefore vital. A strategy for SARD must include measures to promote this participation and to create conditions for people to change to more sustainable ways. Moreover, by encouraging the participation of rural people, policy makers in government can learn from them about their needs and circumstances, and about their likely responses to policy initiatives. Policy makers need to find culturally acceptable and effective ways of involving people in their decisions and of motivating people to search for and adopt their own solutions to problems of unsustainability.
There are five main types of policy instruments that affect SARD:
· general economic and social policies;· policies relating to agricultural and rural development;
· policies relating to markets, including the establishment of market institutions and rules, and to allocation of property rights;
· policies aimed at establishing democratic and participatory processes; and
· policies designed specifically to influence natural resource use and protect the environment.
General economic and social policies. Under this heading, fiscal and monetary policies can influence SARD in many ways. Many governments, especially in industrialized countries, raise the majority of their taxes from progressive income taxes that, indirectly, increase the cost of labour to employers. As a result, firms will find it profitable to substitute other, less heavily taxed natural resources for labour, leading to a too high utilization of natural resources relative to labour. Biasing the taxation system more strongly towards natural resource taxes may help promote more sustainable development.
Prudent fiscal management is important for SARD since economic instability is likely to discourage private investment, and frequent budget crises may disrupt the provision of important public services. A too large public sector may 'crowd out' development in private sector activities, including agriculture.
Low interest rates will favour long-term investments in resource conservation measures. However, low interest rates achieved by artificially holding down rates may inhibit development of the financial sector, discouraging formal savings and limiting the funds available for lending for rural (and other) development.
Trade and exchange rate polices that distort prices of agricultural inputs and products can have negative impacts on SARD. For instance, some countries have sought to maintain a high official exchange rate by limiting imports. Such policies turn the domestic terms of trade against sectors producing tradeable goods, including agriculture. The distortions induced can be massive, and devastating for SARD.
The sustainability principle of transferring the equivalent of the current resource base to the next generation means that investment policy is crucial. Policy instruments for SARD include measures to promote appropriate private investment, including facilitating the international flow of capital. Government investment may be needed in areas where market failure leads to under-investment - human capital and open access resources, for example. Human capital improvements for SARD may require pubic investments in rural health services, education, agricultural research and extension. Similarly, public investments may be needed in open access resources such as many fisheries and some forests, as well as in state-owned resources such as rural infrastructure. The usual tests of acceptable environmental impacts and social rate of return on the committed funds should be applied in appraising all such public investments.
The threat to SARD posed by population growth implies that, at least in the long run, population growth must be slowed. Instruments may include measures that improve the education of girls and the status and employment prospects of women, as well as public health measures to give women control of their own fertility. Population policy also extends to measures affecting the geographical distribution of people. Examples include measures to control rural-urban differentials that affect the rate of urban migration, and land settlement schemes to relocate people from over-populated to less densely settled areas.
Taxation and asset redistribution measures may be used to address the equity dimension of SARD. Policies may be adopted that specifically target the poor, such as famine relief programs, food for work schemes and provision of free or subsidized services for the poor. Striving for a reasonable standard of living for today's poor is important to enable poor parents to secure a more sustainable future for their children by providing them with a better start in life.
Policies relating to agricultural and rural development. Within the rural sector, rural infrastructure improvements can contribute to SARD by giving people better access to services and facilities that enhance the productivity of private rural capital. The proper maintenance of existing infrastructure is also important. Like all public investments, rural infrastructure developments need careful appraisal, including proper consideration of their environmental impacts.
Improvement of human capital in the rural sector is an often overlooked aspect of sustainability. Rural education and health services can help produce a rural population better able to manage agricultural resources. Investments in agricultural education, research and extension can promote SARD through the development and uptake of better production technologies. Through extension efforts it may be possible to change attitudes and values towards sustainability amongst the whole population.
Agricultural research policy and management will influence the efficacy and efficiency of R&D efforts directed towards SARD. The aim must be to focus efforts on issues that matter, and to make research responsive to the needs and circumstances of the intended beneficiaries.
In many less developed countries, the sustainable funding and staffing of agricultural research is a problem needing the attention of policy makers. The burden on the public sector may be eased, to some extent, by measures such as the creation and enforcement of patent rights that will encourage greater private agricultural R&D activity.
Policy interventions to date relating to agricultural prices arguably have mostly had negative impacts on SARD. In industrialized countries, setting prices above their equilibrium levels has led to agricultural surpluses, and has also led to inefficient and sometimes unsustainable levels of intensification. These policies have also often distorted international markets to the detriment of unsubsidized producers, most of whom are in the less developed countries. On the other hand, the tendency in less developed countries to take measures to hold down food prices has damaged the livelihoods of their own agricultural producers and may have obliged some poor farmers to degrade their resources.
Some threats to SARD come from climatic or other disasters, and policies to prevent or mitigate such events deserve consideration. So too do measures to help agriculturalists recover after such events have occurred. Foreign aid may be available to help rehabilitate devastated areas or industries in less developed countries.
It will sometimes be appropriate for governments to participate directly in agricultural production or marketing as part of the process of SARD. Recent trends are towards more reliance on the private sector. On the other hand, the fact that governments may have access to capital at lower rates of interest than private investors may justify government participation in long-term ventures such as forestry.
Especially in poorer countries, the goal of sustainable rural livelihoods may require policy interventions to help rural people escape from 'poverty traps'. Unfortunately, finding a package of policy instruments to do this is notoriously difficult, although some helpful measures are known.
Policy interventions relating to food and nutrition include the above-mentioned poverty alleviation measures to ease food security problems for the poor. In addition, overall food security may be enhanced by correcting any bias in agricultural research and extension programs in favour of cash crops at the expense of food crops. Pure food laws and dietary education can also help to improve nutritional standards, and hence human health and productivity.
Among policy options for SARD are various instruments relating to property rights. These include:
· reallocation of resource property rights between public, communal and private ownership;
· redistribution of privately owned resources among private individuals;
· regulation of the use of state, common, and open access property resources; and
· measures to encourage the efficient and sustainable use of resources.
All four types of policy interventions are likely to have impacts on sustainability, efficiency and equity. Moreover, where there is change of ownership, the full impacts of a particular policy may be difficult to predict. By their very nature, changes in property rights make some individuals better off and others worse off, meaning that such policies are often divisive.
Property rights may be a source of inefficiency if they do not provide for the transfer of the resources to those best able to use them. Inefficiencies will also follow if resource managers do not have reasonable security of title. For example, the lack of a transferable title to land may prevent the users of that land from gaining access to formal credit. Similarly, the lack of security of tenure may affect the care with which the land is conserved and used. In such situations, tenure reforms that are more consistent with SARD might be designed. Security and transferability of title can be of benefit for other forms of property, including rights of access to open access resources such as fisheries and to state property such as irrigation water.
Institutional development is important for SARD. In this context, 'institutions' are defined as the rules, conventions and other elements that form the structural framework of social interaction. Both community-based and market-based institutions need to be considered by policy makers, although there is usually more scope for them to influence market-based institutions than community-based ones.
SARD requires some fundamental changes in attitudes and values throughout society. Policies to promote a more 'conservation-minded' approach to agriculture may be promoted through the media, by working with 'change agents' of all types, and through local and national organizations, such as religious establishments, political parties or women's associations.
Policy attention to market-related institutions may be directed to making markets work better and to encouraging their development. That means removing unnecessary restrictions on market operations and establishing an environment in which entrepreneurship can prosper. Fair trading laws may need to be established or improved and some government assistance may be provided for the establishment of small business ventures.
Policies aimed at establishing democratic and participatory processes. Some SARD policies need to focus on establishing democratic and participatory processes. Decentralization may bring policy making about local matters closer to the people who will be most affected by those decisions. However, decentralization will not work unless sufficient funds and other resources are decentralized along with the responsibilities for action. Nor can a central government properly divest itself of those policy responsibilities that must be carried out in a coordinated way, including priority setting for regional activities.
People's participation is widely understood to be crucial for SARD. Unfortunately, getting participation to work is not easy. Suggested elements of policy to this end include the following:
· A truly participatory approach requires reasonable development of democratic processes, including respect for human rights, concern for the status of women, children and minorities, and reasonable standards of law and order and security.· There is often a need to develop skills and to change attitudes and values both in local communities and among agricultural professionals; there may be a need to 'transform the learning environment', to change rural organizations into 'learning organizations'.
· Agricultural research and extension systems must be sensitive to the needs and circumstances of their clients.
· A policy of promoting SARD by working through local organizations, including NGOs, may circumvent some of the difficulties in transforming hidebound government organizations into people-sensitive entities.
· People's participation may be improved by making proper use of appropriate communication and information technology. The flow of information, in both directions, between the rural people and policy makers and planners at various levels needs to be as effective as possible. That may be attained using a variety of channels of communication, from local meetings and consultations, through to the use of modern electronic media, where appropriate.
Policies designed specifically to influence natural resource use. Policy approaches under this heading include the range of options of:
· direct government action;
· use of control instruments; and
· use of economic incentives.
Where, because of market failure or for other reasons, there is rural resource degradation or contamination of the environment, governments can act directly to try to correct these problems. For instance, governments can fund and undertake land conservation or rehabilitation works.
When direct government involvement in resource management is not appropriate, policy makers may turn to various types of control measures. These may include bans on certain activities or inputs, or the imposition of obligations on resource owners or managers. Such control measures are typically enforced via penalties for non-compliance. Inspectors have to be employed to detect those who break the rules. However, by the very nature of agriculture, enforcement is difficult and expensive, and may encourage corruption.
Because of these difficulties, economic incentives often offer better solutions to market failures affecting SARD than do control measures. Incentive approaches that have been suggested include:
· targeted subsidies
· tradeable resource shares
· individual transferable rights
· transferable development rights
· tradeable emission permits
· environmental taxes
· resource pricing
· effluent charges
· user charges
· deposit refund schemes
· environmental bonds.
All or most might be adapted to tackling particular resource conservation or environmental management problems relating to SARD. Unfortunately, experience in several countries suggests that the administrative and other impediments to the use of such measures can be considerable.
Good policy making for SARD entails an iterative, continuous cycle, with the following stages:
· diagnosis of problems and opportunities
· design of possible interventions
· setting the scope of programs or projects, i.e., determining the scale of operations
· impact assessment
· appraisal
· decision making
· implementation (action)
· monitoring and evaluation
then back to diagnosis. Not all steps may be followed on every occasion, and there may be looping back as ideas are developed and new information accumulated.
