Policy and integrated management Environment

Posted March 1996

Use of Indicators in Sustainable Agriculture and Rural Development

by Jeff Tschirley
Senior Officer, Sustainable Development
Environment and Natural Resources Service (SDRN)
FAO Research, Extension and Training Division

The basis and need for indicators

See also: Environment Specials
  • Global climate maps
  • Organic agriculture
  • Integrated coastal area management
  • Biodiversity in agriculture
  • Earth Summit+5
  • Agroclimatic concepts
  • Remote sensing
  • Maps of the World Food Summit
  • Sea-level rise and agriculture
  • Indicators are pointers. Used effectively, they reveal conditions and trends that help in development planning and decision-making. Sustainability indicators look at economic, social and environmental information in an integrated manner and are growing in importance with the advent and follow-up to Agenda 21. They are now challenging countries and the development community to: The institutional and professional capacities of countries and communities, especially the poorer ones, to adapt and apply technology, to promote authentic participation, to empower local groups and to encourage professional staff and extension systems figure prominently in development failures and successes. Thus, a central challenge to technicians, planners and policy-makers is to ensure that indicators and information address these issues.

    The SARD framework

    The four thematic areas of SARD, initially developed at the den Bosch Conference on Agriculture and the Environment (s'Hertogenbosch, the Netherlands, 15-19 April 1991) and subsequently incorporated as Chapter 14, the Agenda 21, and its sub-elements provide a useful starting point for countries to think about their indicator priorities and information needs. The SARD framework includes:

    The integrated nature of sustainability

    Indicators can be developed for each category of the SARD framework to measure the condition and trends in each critical sector. However, the challenge of sustainability (and the point that inhibits progress) is its three-dimensional nature (the environmental, the social and the economic) and the need to make trade-offs (e.g. between economic growth and environmental protection) and adjustments to maintain these three components in a dynamic balance. Although many would like to believe otherwise, win-win (all parties benefit) situations are not always possible. Invariably, someone or some group becomes disadvantaged from a policy change and resists the change.

    Cutting across the three elements of sustainable development are issues which often determine how effective development interventions will be. These factors include:

    Institutional indicators

    Although indicators of sustainable development pose an enormous challenge to develop, there are a number of entry points to begin work. For example, the governments of most countries already influence land use through their agriculture, forestry and fisheries policies and planning processes; they use various kinds of information to arrive at their decisions. But, traditional environmental indicators that focus on the use of pesticides and fertilizers, crop productivity, land conservation and so on, ignore human and institutional performance even though it is often the critical factor in success.

    If SARD is seen primarily as a management challenge and not simply a technological or financial one, then the emphasis in indicator development should be on measuring the effectiveness of decentralization, setting unambiguous objectives accompanied by performance standards and involving stakeholders. This is quite different from the rather static "state" indicators which are often employed.

    An approach being tried in Tanzania (Table 1, below) through a regional GEF project, focuses on biological diversity and has developed a classification system and set of institutional indicators.

    Table 1 - Institutional indicators developed for Tanzania
    IssuesMeasures
    ManagementCoordination mechanisms, Performance incentives, Levels of hierarchy
    FinanceResources dedicated to biodiversity - Control over allocation
    Trained personnelTraining profile - Skills upgrading
    InformationExchange mechanisms - Monitoring and evaluation
    AcceptabilityParticipating mechanisms - Decentralization
    AccountabilityPerformance standards - Evaluation
    TimeframeShort-term - Long-term
    LevelNational, District - Village, Community, Eco-zone
    ActorsInternational, National - Ministry, District, Village

    Pressure-state-response framework

    Many countries have national agricultural development plans which are developed on a three or five-year rolling basis. These plans frequently use a policy analysis matrix to examine supply and demand conditions, prices, investment requirements, exchange rates, trade opportunities and other factors to achieve objectives such as economic growth, crop diversification, food security, poverty alleviation, income generation and/or nutrition objectives.

    Goals and objectives are established (or the existing ones modified) that, at least nominally, are based on exploiting comparative advantage both within and between countries. This means that, ceteris paribus, a country or district with its unique endowment of natural and man-made capital is able to produce a product more cheaply locally than it can import it. The converse is also true - the same country or district may find it cheaper to import a product than to produce it locally.

    In determining comparative advantage, the natural resources base and its agro-ecological potential are critical but often underappreciated factors in determining the costs of production and productivity (yield/ha). Such values are usually considered only indirectly in the policy-making or planning processes or not at all. Thus, a framework is needed that accommodates the full range of social, environmental and economic factors that enter the sustainability nexus.

    The most widely accepted framework at present is referred to as pressure/state/response (Table 2) which was developed in the 1970s and is well suited to addressing the chain (filiere) of events that lead to environmental impacts.

    Table 2 - Example of Pressure/State/Response (PSR) framework
    IssuePressure
    (Driving
    force)
    State
    (Resulting
    condition)
    Response
    (Mitigating
    action)
    SOIL EROSIONHillside farmingDeclining yieldTerracing,
    perennial cropping
    QUALITY WATERAgro-industrial processingFish die-offWater treatment,
    technology adjustment
    CONDITION
    OF GRASSLAND
    Livestock grazingSoil erosionStock rotation, de-stocking revegetation
    Pressure refers to the driving forces that create environmental impacts. They could include hillside farming, agro-industrial processing, livestock grazing, forest harvesting, etc. State refers to the condition(s) that prevail when a pressure exists. This could be for example declining yields, fish die-off or soil erosion, etc. Response refers to the mitigation action(s) and levers that could be applied to reduce or eliminate the impacts.
    To avoid an overload of information, indicators must be "issue driven". Failure to do this results in the generation of too much information and lack of focus on the underlying forces that created the problem. At first glance this point seems obvious yet in much indicator work the demand for data is quite heavy. PSR is well adapted to an issues oriented approach but is weaker when planning is required and a broader range of information is required, much of which is not issue-oriented (Table 3).

    Table 3 - Placement of FAO Contributions to Agenda 21 Indicators in the D-S-R framework
    ChapterDriving ForceStateResponse
    Chapter 10.
    Planning and
    Management of
    Land Resources
     - land use change
    - land condition change
     
    Chapter 11.
    Combating
    Deforestation
     - annual roundwood
     production*
    - forest growing
     stock*
    - forest area*
    - wood as percentage
     of energy
     consumption*
    - forest area by
     natural forest area
     and plantation area
    - deforestation rate*
    - reforestation rate*
    - forest harvesting
     intensity
    - managed forest
     area ratio
    - protected forest
     area as % of
     total forest area
    Chapter 12.
    Combating
    Desertification
    and Drought
    - fuelwood
     consumption
     per capita
    - drought frequency*
    - national annual
     rainfall index
    -livestock levels
     per sq. km. in dryland*
    - greenleaf biomass
    - population living below
     poverty line
     in drylands
     
    Chapter 13.
    Sustainable
    Mountain
    Development
    - population
     dynamics of
     mountain areas
    - welfare of
     mountain populations
    - assessment of
     the condition
     and sustainable use
     of natural resources
     in mountain areas
     
    Chapter 14.
    Promoting Sustainable
    Agriculture and
    Rural Development
    - use of pesticides
    - use of fertilizers
    - arable land per capita
    - irrigated area
     as % of arable land
    - area affected by
     salinization
     and waterlogging
    - agricultural research
     intensity ratio
    - agricultural
     extension funding
    - agricultural education
    - energy source mix
     in rural households
    - energy use
     in agriculture
    - energy source mix
     in agriculture
     
    Chapter 15.
    Conservation of
    Biological Diversity
       
    Chapter 17.
    Protection of
    the Oceans,
    All Kinds of Seas
    and Coastal Areas
     - catches of
     marine species*
    - ratio of current
     fishing effort
     to that at MSY
    - ratio of current
     fishing mortality
     rate to that at MSY
    - ratio of current
     population biomass
     to that at MSY
    - ratio of current
     biomass to that
     under virgin conditions
    - algae index
    - discharges of oil
     into coastal waters
    - releases of N and P
     to coastal waters
    - participation in
     maritime treaties
     /agreements
    * NB: These indicators are not recommended for retention

    A shortcoming of the PSR vis-à-vis sustainability indicators and analysis is its inability to address the multiple dimensions of sustainability. If SARD is about better management and making trade-offs between economic, social and environmental objectives and the PSR is accepted as the default analytical framework, then it must be complemented by a component that allows the user to identify linkages between the driving forces.

    Environmental information

    Information related to land suitability, pollution impacts and other sustainability considerations is available or can be estimated and included with the costs of production, revenues and the resulting profits which underpin the policy analysis framework. The results are not always as precise as would be desired, but when decisions are being taken without any information, some data and an approach which can allow for incremental improvements in the quality of decision-making are needed. Indicators for land, water, soil, biodiversity and other factors can be used along with economic data by constructing scenarios based on available information after identifying gaps and assessing quality.

    Recent work by the World Resources Institute provides additional evidence that agricultural policy is usually biased against resource conservation and sustainable practices. However, when the costs of deterioration in the natural resource base from inappropriate land use is calculated in farm income, resource conservation practices compete economically and financially with those that maximize income over the short and medium-terms; the longer the time period, the more cost-effective are sustainability practices.

    If governments use this information to make better policy choices, to identify failures and to make adjustments, the sector would be able (theoretically) to allocate resources more efficiently, increase profits margins and, keeping constant factors such as population, produce indefinitely.

    Social information

    Social factors such as landlessness, migration to engage in wage labour, rural unemployment, poor access to credit or needed inputs, weak extension systems can all serve to undermine sustainable development. The challenge is to know when, to what extent, and under what conditions, these factors interact with economic and environmental factors to work against sustainability.

    The Human Development Index (HDI), produced by UNDP is one attempt (and perhaps the most ambitious) to reflect an array of social and economic concerns in a single index. It combines per capita GDP with indicators of adult literacy and life expectancy to generate a weighted index of "essential" living standards.

    However, essential living standards will vary among between countries and regions. How should questions of equity, freedom, health, food security be reflected in a modified HDI? And, how should they be weighted?

    Economic information

    Policies with respect to trade, spending, exchange rates, labour markets, and inputs are included in the analysis and impinge on the natural resources base. Policy objectives are realized through the introduction of new technologies, diversifying or specialising production which raises or lowers prices for consumers or producers, through taxes, restrictions, subsidies, guarantees, and income supplements.

    Policy failures, from the point of view of sustainable development, arise when instruments inadvertently lead to misuse of natural resources. Whereas a government objective may be to increase production of a commodity, such as soya or coffee or cotton in order to generate foreign exchange, and the policy instrument used is favourable credit terms or price guarantees, an unforseen result may be increased soil erosion, mining of soil nutrients, misuse of pesticides or fertilizers, or a variety of negative impacts that represent long-term costs to the government and, especially, to the producer.

    These externalities or indirect costs are seldom calculated or even identified in policy analysis and planning even though they may create direct costs to the agriculture sector and reduce the GDP of a country. As a general rule indirect costs and externalities should be included in economic planning and analysis to the extent that the benefits obtained be equal or exceed the costs of obtaining them. Thus the ability to accurately value such costs and benefits looms large in the economic component of sustainability analysis.

    Criteria for indicator development

    Many professionals agree that at least three criteria should guide the development of sustainability indicators:

    1. Policy relevance - to ensure the indicators address issues of primary concern to a country or district and receive the highest priority. In some cases policy-makers may already share concern about an aspect of sustainability (e.g. land degradation) and be ready to use indicator information for addressing the issue; in other cases (e.g. biodiversity) it may seem unclear what is needed and thus indicators will have to be used in a way to raise awareness and promote action.

    2. Predictability - to allow a forward looking perspective that can promote planning and decisions on issues before they become too severe. Anticipatory decision-making is at least as important to sustainable agriculture as is recognition of existing problems.

    3. Measurability - to allow planners and analysts the means to assess how the indicator was derived, either qualitatively or quantitatively, and decide how it can best be applied in the planning and decision-making process. Given the limited information on environmental conditions in many countries, qualitative measures such as rapid appraisals, informal surveys, and opinion polls have an important role to play. They can be useful in policy-making despite a bias for traditional statistical measures.

    Aggregating data and information

    It is commonly thought that politicians have short time horizons and cannot digest large amounts of information. While the former is probably true, experience in a number of countries reveals that: Thus, the temptation to arrive at single digit indicators or to produce indices that aggregate a number of weighted indicators (the correlations for which are seldom known) should be avoided in the early stages of indicator development. More effort and trials are needed, as has been done in the Netherlands, to experiment with menus of indicators that are thematically linked to represent several dimensions of an issue such as overgrazing or deforestation.

    For example, land degradation could arise from unemployment, insecure land tenure, food insecurity, population pressure, cropping practices or other factors. In most cases it will be a combination of factors and each country must identify the key ones for their situation. This paper emphasises the role of indicators in promoting sustainable development at the national and sub-national levels, but some groups are calling for indicators to monitor progress in implementing the Agenda 21 at the global level. They are interested in issues such as biological diversity, climate change, international waters, toxic chemicals etc.

    The Scientific Committee on Protection of the Environment (SCOPE) has devised a sustainability matrix (below) comprised of "a series of well known and internationally accepted indices for economic and social factors"; augmented by environmental indices. Clearly, many OECD countries would recognize the elements, but would it be in the interests of, for example Tanzania or Peru or Papua New Guinea to be included in such a matrix? If not for global, then for regional purposes? Would the SCOPE measures be the appropriate ones, for example, in the East African region? Would it make any difference?

    Table 4 - SCOPE Sustainability matrix
    EnvironmentSocialEconomic
    Source indexUnemployment indexEconomic growth
    (GCP)
    Sink indexPoverty indexSaving rate
    Life support indexShelter index
    Balance of payments
    Human impact indexHuman capital indexNational debt

    For reporting above the national level, groups such as the CSD would prefer a small number of indicators. For example to monitor progress in agriculture 4-8 indicators are foreseen. However, there are many ways to measure soil erosion, land degradation and other factors. The individual measures cannot always be added together to arrive at a globally or regionally meaningful number.

    Notwithstanding the risks in using aggregated indicators, there are also risks in using too many individual indicators. One is the failure to demonstrate a clear trend or condition. A large selection of indicators can also lead some decision-makers to select one that supports their particular view. It can also cause confusion in sorting out what is considered the most relevant information. This can stop or delay the decision-making process and reinforce bureaucratic inertia.

    Constraints on existing information

    At present statistical data is available only for national boundaries which limits its usefulness in determining net production potential and population supporting capacity and very little of it is geographically referenced. Therefore, an important requirement for improving the usefulness of indicators is the need to organize sub-national data in an agro-ecological-zone format which can overlay district boundaries. On this basis, environmental, social and economic constraints in countries and districts can be assessed in the context of population-supporting capacity. Although this work has been undertaken in some countries, it lags far behind the need. An agro-ecological-zone-based information system could also include information on waterlogging and salinity, loss of forest cover, presence of plant and animal genetic material, and prevalence of vector-borne disease, land tenure, food security, energy and other factors which figure strongly in sustainability analysis.

    Crossing the threshold

    The last constraint to the use of indicators for sustainability analysis is the poor understanding and lack of consensus among technical experts of how economic, social and environmental forces interact. There are numerous cases where high levels of soil erosion have existed for long periods either without significant loss in productivity or not enough loss to induce the farmer to change behaviour. Thus, it seems that one could not state unequivocally that soil erosion is an indicator of unsustainability unless a link was established demonstrating severe economic and/or social effects.

    Despite scientific uncertainty, the use of thresholds which provide a range of allowable degradation under specified conditions could be important tools for planning and monitoring sustainability performance. For example, most agro-ecological zones have information available on soil type, climate, topography and land suitability for various crops. When an erosion rate is known, experts familiar with the region can estimate whether the erosion rate is sustainable under a given cropping regime. Based on past experience, training, and intuition, such rule of thumb estimates constitute expert systems that, if organized systematically, could be used by planners and analysts.

    Once planners, policy-makers and land users agree on the issues to measure, criteria for a threshold table can be established for social and economic aspects based on cost effectiveness factors such as time, expense and level of detail involved. In many cases, rule-of-thumb measures are a practical way to begin. Two important elements in such a process are: a) the use of participatory mechanisms, and b) to state clearly the criteria used in calculating an indicator.

    These aspects are an important means of promoting transparency and dialogue in the planning process. If a person or group knows the assumptions and methods used in developing an indicator, even if they disagree with the method or the result, an open and flexible process can become the basis for dialogue and adjustment.

    In most cases no single indicator would determine sustainability or unsustainability. However, a series of indicators that collectively exceed the threshold levels should be sufficient cause to investigate data quality, conduct a rapid survey of the area involved, consult knowledgable experts, or all of the above.

    Conclusions

    This paper has reviewed a number of the constraints to indicators but also strived to avoid the impression that nothing can or should be done. The main points are the following:

    1. Development of sustainability indicators must be closely tied to the development of national and sub-national information systems for agricultural planning and programming.

    2. Initially, the emphasis should be on improving national and regional capacity with regard to data collection and information collection; barring this, global indicators will have little meaning.

    3. Aggregation of existing data to derive global indicators would likely lead inefficient allocation and resources and misunderstanding of local forces and influences that underlie unsustainable development practices. However such exercises might be usefully be carried out on a regional basis (e.g. Africa, Asia, Latin America) or among countries with a number of common characteristics (e.g. OECD, small island states).

    4. Thresholds and targets are useful means of allowing countries to compare their performance, for example in controlling soil erosion, against internationally accepted norms based on local natural resource endowments and land use practices.

    5. Basic data and information regarding production potential and supporting capacity should be organized based on agro-ecological zone and overlaid with national or district boundaries.

    6. Interactions between the environmental, social and economic components of sustainability need considerable field research to better understand how they affect each other and the driving forces that need to be measured.

    7. Human and institutional capacity to manage the development process through participatory and transparent approaches is fundamental to sustainable agriculture. Indicators to monitor these dimensions are essential but extremely difficult to collect; more emphasis is needed in this area.

    8. An important goal that indicators can help achieve in developing countries is greater participation and transparency in the planning and programming process in countries. Without this, even the best data and analysis will not lead to sustainable development as it was conceived at UNCED.



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