268 – Conservation agriculture in developing countries

Is “Conservation Agriculture” really a win-win for farmers and the environment? It reduces the losses of soil and nutrients from agricultural land, but are farmers who adopt it better off or worse off? In asking this, my focus is on developing countries, where soil erosion remains a serious problem.

Soil erosion reduces farmers’ livelihoods, but also causes off-farm damage, particularly to rivers, lakes and dams, and “Conservation Agriculture” has been promoted as a solution. A particular Conservation Agriculture (CA) package of three farming practices has been widely promoted in developing countries as a win-win option for farmers and the environment. It consists of zero tillage, retention of crop residues for soil cover (mulching), and rotation of cereal crops with legumes, which fix nitrogen and so increase soil fertility.

Something close to this package has been widely adopted in North America, South America and Australia, but its adoption by poor farmers in Africa and South Asia has generally been disappointing, despite years of active promotion by international organisations.

Does this mean that poor farmers can’t recognise a good thing when they see it, or is the problem that benefits of Conservation Agriculture to these farmers are not sufficient to outweigh the costs? Given the massive differences between small subsistence farms in southern Africa and large commercial farms in North America, we should be open to the possibility that a practice could be very attractive to one group of farmers but not the other.

Photo: Marc Corbeels

Photo: Marc Corbeels

In 2012 I was invited to review the evidence on the economics of Conservation Agriculture in Africa and South Asia, and to present my findings as part of a workshop on Conservation Agriculture held in Lincoln Nebraska that year.

Part of the motivation for the workshop was to try to address issues of controversy about Conservation Agriculture in developing countries. Some people had been critical of what they saw as promotion of CA as a silver bullet solution without sufficient consideration of circumstances where it did and didn’t work for farmers. Others hit back at these criticisms and defended CA as the best available option.

The workshop marshaled the evidence on various facets of CA. The results have recently been published in a special issue of the journal Agriculture, Ecosystems and Environment. All the papers can be accessed for free here.

Looking at past literature on the economics of CA for poor farmers, my co-authors and I found that there wasn’t all that much literature, but what there was tended to indicate that CA (or its components) should be economically attractive to small farmers. However, looking critically, little of this evidence was based on sophisticated analysis. Many of the economic models used seemed too simplistic to be reliable. 

So we set out to build a model of our own and apply it to a case study in northern Zimbabwe. Marc Corbeels from CIRAD joined the team, providing his data and extensive experience for the case study.

A key finding is that the farm-level economics of CA are highly case-specific. In some situations it is competitive with traditional agriculture, but in others it falls far behind. Organisations promoting CA need to be quite careful and discriminating about where it is actually a viable strategy if they are not to waste their own and farmers’ resources.

We didn’t find any scenarios where CA was substantially better than traditional agriculture. Where it was better, it was only slightly better, but where it was worse, it was sometimes dramatically worse. This would be important to farmers who are worried about risk.

CA tends to be more attractive for larger, wealthier farmers and to be much less profitable for the smallest, poorest farmers. No wonder many of them have been reluctant to adopt it.

There are several elements that can reduce the benefits of CA for small farmers. One is that zero tillage can increase the number of weeds in the crop. This either reduces crop yield or requires additional effort for weed control. A second factor is that some of the benefits take about a decade to kick in (increased yields from zero tillage combined with mulching). The poorest farmers might not be able to afford to look that far ahead when they make their farming decisions. Thirdly, crop residues may not be available for mulching. They may be harvested to feed to livestock, or in some cases farmers cannot keep other people’s cattle off their crop residues even if they want to. (The community doesn’t allow it, and there are no fences anyway.) Fourthly, legume crops may or may not be profitable enough to be worth including in the rotation. It depends on their yields and sale prices.

Some extension programs have emphasised the importance of farmers adopting all elements of the CA package. This is quite naive, as full adoption of farming packages rarely happens anywhere. Farmers almost always pick and choose the elements that they think will work for them, and leave the rest. We found that the economics tend to favour this approach in the case of CA – partial adoption tended to be more attractive than full adoption.

So, overall, this is one of those cases where the farm-level economics pose a barrier to changes that people would like to see, at least in some cases. There are good and bad ways to respond to this information. The bad ways include ignoring the information and continuing to promote CA in an untargeted way, or thinking that the adverse economics could be overcome by better or more intensive efforts to promote CA. The good ways include using the information to target CA promotion to situations where it is likely to be adoptable, and redoubling efforts to develop more appropriate soil conservation practices for situations where it is not. In some cases it might be feasible to subsidise CA to increase its uptake, but this won’t overcome adverse economics unless the subsidies can be maintained indefinitely. If they are to be maintained indefinitely, we would want to have confidence that the system will result in large enough reductions in the off-farm costs of soil erosion. 

Further reading

Pannell, D.J., Llewellyn, R.S. and Corbeels, M. (2014). The farm-level economics of conservation agriculture for resource-poor farmers, Agriculture, Ecosystems and Environment 187(1), 52-64. Journal web site (access to the paper is free) ◊ On-line video presentation ◊ IDEAS page for this paper

267 – Budget 2014 and the environment

Last week’s budget included funding cuts to many areas of government, and the environment certainly was one of the areas to suffer. There were some new initiatives, but they were outweighed by what was taken away. 

The most substantial environmental initiative in the budget is the Emissions Reduction Fund (ERF), a key part of the government’s election promise of a Direct Action climate policy. The headline commitment is A$2.55 billion, although spending in the next three years will be only A$300 million, A$355 million and A$417 million – 30% less than the amounts announced by Environment Minister Greg Hunt as recently as November last year.

The ERF is intended to replace the carbon tax, which is expected to raise more than A$7 billion in 2013-14. It is no secret that economists generally don’t support this policy change, viewing it as a move from a relatively efficient to a relatively inefficient mechanism that will worsen the deficit.

volunteersAnother of the key initiatives also amounts to give and take. There is A$525 million over four years for the Green Army (another election promise), which will undertake a range of environmental work. But this is almost fully offset by cuts of A$484 million over five years to the Caring for our Country programme and Landcare, now merged into a new National Landcare Programme.

Of the A$1 billion over four years that remains in the merged programme, some is tied to other election commitments, such as a nature corridor in Western Sydney (A$7.5 million), a Whale and Dolphin Protection Plan (A$2 million), and the 20 Million Trees programme (A$50 million).

These changes amount to a substantial cut in funding to Australia’s 50 regional natural resource management bodies – a fate they also suffered after the last change of government in 2007.

On the face of it, the budget looks to have delivered on an election promise to safeguard Australia’s most iconic environmental asset, the Great Barrier Reef, with a new Reef Trust set to provide A$40 million over four years.

But while this sounds respectable, it is a very small percentage of the amount needed to achieve existing targets for the reef. It is also partly offset by a A$2.8 million cut (over four years) to the Great Barrier Reef Marine Park Authority.

There are lots more cuts too. The 4900 staff employed in the environment portfolio will be reduced by 300, although that is fewer than might have been feared.

Then there are numerous cuts to existing programs. The most affected areas, predictably, are those related to climate change, including carbon storage, renewable energy and alternative fuels. The Australian Renewable Energy Agency is to be wound up, saving A$1.3 billion over five years starting in 2017-18. Funding of A$1 billion remains to support existing projects. 

Another large saving is a A$459 million cut to the Carbon Capture and Storage Flagship Programme, also commencing in 2017-18.

Climate Spectator has confirmed that an earlier promise of A$500 million for a One Million Solar Roofs program has been quietly dropped. Similarly, there is no sign of the promised A$50 million for Solar Schools, and the promised Solar Towns program has been dramatically scaled down, from A$50 million to A$2.1 million.

Biodiesel and ethanol will both be subject to increasing excise rates, growing to 50% of the “energy content equivalent tax rate” (the scale by which fuels are taxed according to how much energy they contain) by 2021. This will reduce the incentive for people to prioritise these fuels over fossil fuels.

Meanwhile, there are various cuts to fuel efficiency and green technology measures, including:

  • The National Low Emissions Coal Initiative (A$17 million)
  • The Clean Technology Programme (A$45 million)
  • The National Greenhouse and Energy Reporting Scheme (A$2 million)
  • The Ethanol Production Grants program (A$120 million over six years)
  • Grants to support algal synthesis and biofuels (A$5 million)
  • The Cleaner Fuels Grants Scheme
  • Water and science

Water is also a target for cuts, with the abolition of the National Water Commission (A$21 million over four years) and savings of A$408 million in the Sustainable Rural Water Use and Infrastructure progam, leaving that program with A$4.5 billion over 10 years.

These savings include reduced funding for water buyback, with the government prioritising water recovery through infrastructure projects. In this, the government has chosen to prioritise a highly inefficient method to generate water, in response to political pressure from the agriculture sector. As with the changes to climate policy, this policy conflicts with the government’s aim to be seen as a sound economic manager.

Environmental research funding will probably be affected by cuts to CSIRO (A$111 million), the Cooperative Research Centre program (A$80 million) and the Australian Research Council (A$75 million). It will definitely be affected by cuts to the National Environmental Research Program (A$21 million), the Office of Water Science (A$10 million) and the Australian Institute of Marine Science (A$8 million).

Finally, the decision to resume indexation of the fuel excise will have an incidental effect on the environment. One cannot help being struck by the irony of this measure being introduced by a government that was so highly critical of the carbon tax and the burden it places on the community.

The initial cost of this change will be relatively minor (A$280 million in 2014-15), but it will grow rapidly year by year (to A$1.85 billion by 2017-18). Before long, its annual cost may exceed that of Australia’s carbon pricing arrangements, depending on how prices change in Europe’s carbon market, which the previous government had signed up to.

Not that I’m being critical of the decision to index the fuel excise. As well as generating revenue, it will reintroduce at least some of the incentive to reduce fossil fuel consumption that will be lost if the Senate approves the government’s plan to dismantle the carbon pricing system.

That point aside, it is not a good budget for the environment – but then that was expected. In relative terms, the environment probably hasn’t been hit any harder than other areas like health and education.

A version of this article was first published in The Conversation on 14 May 2014.

I did an interview on ABC Radio National (Bush Telegraph program) on 16 May 2014 about Landcare and the Budget. You can listen to it here. (My bit starts about half way through the item.)