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Making a transition to climate-smart agriculture requires coherency in the range of policies formulated to support the sustainable increase of agricultural productivity and incomes, climate change adaptation and mitigation. Streamlining various policy processes to simultaneously tackle a wide set of objectives, however, is not an easy task. Creating ad hoc policies without a systematic policy assessment can be an inefficient way of targeting and achieving climate-smart agriculture objectives. This chapter describes a systematic policy assessment framework to help countries capitalize on synergies, understand the trade-offs between the different climate-smart agriculture objectives, and design appropriate policies that support climate-smart agriculture. 

A variety of objectives drive national policy-making processes. Considered and formulated in isolation,  policies may result in disconnected actions on the ground. Achieving sustainable development, reducing poverty, developing a 'middle-class' or reducing the dependency on fossil fuels are all worthy examples of development objectives, but they are not always aligned with other national objectives. Policies are often formulated in sectorial 'silos', but even within a given sector there is a need to harmonize policy objectives. Objectives related to agricultural sustainability are increasingly recognized as a priority in many developed and developing countries. However, the majority of current policies in this area remain focused on achieving gains in productivity and profitability. 

This segmented policy approach is partly a result of the parallel policy debates at the national and international levels (see chapter C3-3). Socio-economic plans are often discussed under the umbrella of ministries of economic or social affairs, and environmental plans are discussed at the sectoral level or under the auspices of environmental or natural resources ministries. Finance ministers on the other hand influence fiscal policy and public investment allocations, and central bankers manage exchange rates and money supplies. Also, policy discussions related to climate change have traditionally dealt with climate change mitigation and adaptation as separate issues (Harvey et al., 2014). For instance, at the international and national levels, climate change adaptation and mitigation are often addressed through different processes (see chapter C3-3.2). National actions in these areas are often led by different ministries or institutions, and involve distinct constituencies and funding sources (Locatelli et al., 2011). 

The disconnect in policy actions also stems from the competition for scarce resources, both natural and financial. The different spatial and temporal scales of the problems that policy makers must address, including climate change, create different implementation incentives. It is Understandable that, given the often limited human resources and current socio-political systems, policy makers prioritize urgent, rather than long-term issues. For instance, to increase food security in places like Saudi Arabia or North India, governments stimulate the use of groundwater for agricultural use, using different incentives schemes. This increases agricultural production, but triggers serious trade-offs between current and future production possibilities. These underground reservoirs are practically non-renewable, and the rapid extraction of groundwater reduces the adaptive capacity of communities that are dependent on this resource. 

Policy-making processes are often complex and inflexible. Priority actions may change relatively quickly, but it is not always easy to adjust policies and institutions. The prioritization process is also not always reflected in national development and investment plans, and current legislation may not support the necessary changes the policy makers want to implement. 

However, governments are becoming increasingly aware of the need to achieve greater coherence among diverse objectives and national regulatory frameworks. Policy makers’ interests in pursuing a range of development pathways, including the 'Green Economy' (see module A1 and module C7), 'Blue Growth', sustainable development and climate-smart agriculture, reflect the importance of achieving synergies between different objectives. More and more, the three previously distinct development objectives –sustainable development, disaster risk reduction and climate change adaptation and mitigation– are being discussed in unison (see chapter 3.4 and module C5 on disaster risk reduction). 

The need to increase policy coherence calls for a systematic assessment of current policies and their effects on the set of objectives prioritized by a country. New policies need to target an increasing number of objectives, and the regulatory frameworks must become more holistic and more complex.

Existing agricultural and non-agricultural policies can have intended and unintended effects on objectives related to sustainable increases in productivity, climate change adaptation and mitigation. It is important to assess whether existing policies provide consistent signals to farmers and whether feedback loops exist that can connect farmers' experiences on the ground with policy makers to improve policy formulation. Only by assessing the impacts of policies on multiple objectives, can decisions be made that harness synergies and lead to acceptable trade-offs. A key principle is to create a policy-making process that is participatory and inclusive of all key stakeholders, where possible. This approach contributes to more country-owned and sustainable interventions and delivers results that are in line with system-wide capacity development (see module C1). 

To achieve these ends, a step-by-step approach can be followed. This approach is based on the work undertaken by the FAO Economic and Policy Innovations for Climate-Smart Agriculture (EPIC) programme (see module C10) and the Organisation for Economic Co-operation and Development (OECD, 2016). Figure C3-1 describes the building blocks of the proposed policy assessment framework.

1. A necessary prerequisite for assessing synergies and trade-offs is to understand the key trends related to the impacts of climate change and greenhouse gas emissions in the agriculture sectors, as well as the vulnerability of agricultural systems and farmers in a given country (see module A2 on climate change adaptation and mitigation). It is also advisable to review the key national socio-economic and demographic trends to understand the dynamics that are shaping development. Identifying these key trends can help determine the goals that should be prioritized, and areas where policy action is most needed. Key issues to consider include: climate-related hazards; the levels of exposure, vulnerability, and adaptive capacity of agricultural systems and farmers; the potential risks and impacts on agricultural systems and farmers; and the potential impacts of agricultural and food production systems on climate.
2. An important part of the assessment is to outline the set of objectives and indicators against which the policies are to be evaluated. A sound knowledge of the government’s priorities helps create a better understanding of how objectives related to increases in agricultural productivity and income, climate change adaptation and mitigation are prioritized. Countries increasingly stress the importance of adaptive actions against locally-specific climate change related risks and vulnerabilities. However, the respective weight policy makers attribute to the different objectives of climate-smart agriculture vary by country. Policy makers should assess not only if, and to what extent, they have integrated the three objectives of climate-smart agriculture, but also if the prioritization of these objectives corresponds to their international commitments, national development priorities and climate-related risks and impacts. The process of putting the three climate-smart agriculture objectives on the agenda of national policy-making processes is challenging. In general, economic growth and food security objectives have driven policy actions. Recently, many countries have gradually introduced climate change adaptation in policy design and implementation. The extent and levels of this integration differ among countries. This Integration can be reflected in the policy, legal and institutional frameworks; the design and implementation of programmes or projects; or both. For instance, through NAPs or sectoral plans, climate change adaptation has become institutionalized in many countries. On the other hand, some countries have not yet designed national adaptation plans, but are testing adaptive practices on the ground. Integrating these objectives should take place at different levels (national, subnational and local) and within sectoral plans and programmes.
3. Without coordinated institutions, it is difficult to mainstream the prioritized objectives and ensure that they are translated into actions. The lack of institutional coordination and co-operation, and a segmented institutional approach can lead to trade-offs being made in the outcomes of activities intended to achieve multiple objectives or even a single objective. At the international, regional, national and local levels, countries should assess the challenges involved in strengthening the coherence and coordination among different institutions and within each institutional setting. Based on this assessment, policy makers should determine whether the institutions are working together in an effective and coordinated manner, and through which intra- and inter-institutional mechanisms the coherence and coordination issues could be identified, monitored and addressed. Identifying the key institutions and stakeholders responsible for addressing the three objectives of climate-smart agriculture is the first step in an analysis of institutional effectiveness and coordination. It is essential to analyse how the objectives and the associated strategies and funding mechanisms are integrated and distributed between and within various institutions. Identifying the challenges to institutional coherence, can ultimately contribute to creating synergies between different objectives. Two examples of how a country can ensure that the objectives of climate-smart agriculture are mainstreamed within the institutional setting are provided in Box C3.2.

1. A wide range of international and national regulations, economy-wide policies and sector-specific policies create a diverse set of incentives and disincentives to achieve progress in all three objectives of climate-smart agriculture. Policy makers should map the policies that can have positive and negative incentives for the adoption of climate-smart agriculture practices. Sometimes these incentives and disincentives, which can play a large role in changing the behavior of farmers and other stakeholders in the value chain and determine the adoption rate of climate-smart agriculture activities, may not initially appear to be related to policies. Examples of policy mapping can be found in Ignaciuk, Coger and Dameron (2017), Ignaciuk and Boonstra (2017) and OECD (2017).
2. A systematic assessment of the effects of policies on the three objectives of climate-smart agriculture is often lacking. It is, however, crucial to assess the effects of various policies on all three objectives. Both quantitative and qualitative tools are necessary to shed more light on where the synergies and trade-offs occur. Ideally, governments should rely on evidence that quantifies the extent of these effects. Given the site-specific, evidence-based nature of climate-smart agriculture interventions, the capacity to create this type of evidence needs to be built into national institutions (e.g. universities, national research institutions) to ensure the continuity of an evidence-based policy culture (see also module C10 on step-by step implementation of climate-smart agriculture). Poorly designed policies may not only be ineffective in achieving their explicit objectives, they may also generate unintended negative effects on efforts to reach other objectives (see Box C3.3).

In some cases, the unintended effects of policies may actually contribute significantly to achieving climate change objectives, and regulations targeting other objectives can also have positive effects on emission reductions. For instance, in the Netherlands, the liberalization of the energy market contributed significantly to meeting the country's greenhouse gases reduction target. Similarly, animal welfare policies, particularly a regulation that obliged pig producers to use anesthesia while castrating piglets, resulted in lower nitrogen emissions in the country (Box C3.4). These examples highlight the importance of taking a more holistic approach to policy analysis when considering climate-smart agriculture. Given the difficulty in assessing every policy in a large number of sectors, it is necessary to prioritize policies based on a consideration of the sectors that are most likely to have an impact on emissions and incentives. This may involve, for example, focusing on policies related to energy, water, livestock, forestry and agricultural inputs. 

Policymakers are increasingly facing decisions regarding which trade-offs are acceptable, which ones need to be revised, and what additional policies can be used to correct some of the trade-offs that are caused by the current policy framework. A difficult, but necessary, action is to determine if and when some trade-offs between the three objectives are acceptable. It is ideal, but not always possible to obtain double or triple wins between sustainable increases in productivity and incomes, climate change adaptation and mitigation objectives. Trade-offs between policy objectives can be present, for example, in situations where productivity is prioritized over adaptation or mitigation. A good example of such trade-offs occur when support measures are provided for electricity to pump irrigation water in dry areas. Typically, these measures increase short-term productivity, but over the long term, farmers' resilience may decrease if they are no longer able to withdraw sufficient amounts of water from overdrained reservoirs (FAO, 2011). 

Understanding and addressing the many barriers that can prevent the uptake of climate-smart agriculture can help policy makers design effective supportive policies. Some of these barriers are of particular interest to policy makers since overcoming them is vital to achieving policy objectives. Table C3-1 provides a classification of these barriers, with particular attention given to those barriers that can be overcome by different policy initiatives. Chapter C3-4 and module C10 consider these barriers in more detail. Table C3-1. Barriers to the adoption of climate-smart agriculture and differentiated policy responses – based on the experiences of OECD countries.