Monthly Archives: April 2007

98 – Agricultural research for the poor

Earlier this month, I was rubbing shoulders with people who rub shoulders with the two richest men in the world, Bill Gates and Warren Buffet, at an event that was about helping the poorest people in the world.

The Bill and Melinda Gates Foundation is a mind bogglingly large charitable foundation, with about US$30 billion of Bill’s money, which will also spend another US$30 billion contributed by the world’s second richest man, Warren Buffet. It has been interesting to learn something about the way that these (and other) extraordinarily rich Americans have embraced philanthropy. I’ve no idea how they live their lives, but even if they indulged in the most lavish of lifestyles, and made the most generous provisions for their offspring, they obviously could only use up a tiny fraction of their billions, so they’ve decided to spend most of it on helping others who are in need. It is really rather inspiring, and perhaps might eventually do something to improve the USA’s tarnished international reputation.

The Gates Foundation has three programs: one focused on education for disadvantaged Americans, one on global health which combines practical assistance and medical research, and one on global poverty and hunger, including agricultural research to benefit the poor.

I was privileged to be to be invited to attend three days of meetings in Minneapolis related to the agricultural research program.

The Foundation plans to spend a lot of money on agricultural research in Africa and South Asia. The big and very tricky question is, how to spend it to generate the greatest benefits. They have engaged Phil Pardey at the University of Minnesota and Stan Wood at the International Food Policy Research Institute to undertake a project called HarvestChoice to help them with this question.

A small group of scientists and economists spent a day discussing how to tackle the required analysis, especially in the area of biotic constraints to agricultural production (pest insects, diseases and weeds). It was a very interesting and fruitful discussion, and it resulted in a clear direction for the team doing this aspect of the analysis.

For obvious reasons, given the nature of his core business, Bill Gates is also interested in whether there are key information gaps, the filling of which could make a substantial difference to the poor. His Foundation asked Stan and Phil to convene a Roundtable meeting of about 40 experts of many different types to discuss what the opportunities might be, and I participated in that meeting too.

I must admit that I felt a bit out of my depth at times, in a room full of people with so much knowledge and experience in attempting to assist the poor in developing countries. The discussions at the meeting were an interesting mix of pessimism and optimism. The discussions reinforced how how very difficult it is to make a real difference given the range of factors stacked against the very poor.

On the other hand, people did feel that there were a number of areas where it may be worth investing in creation, collection or collation of new information. I don’t think there was enough consideration of exactly how they will make a difference, and this was reinforced by the Gates Foundation representative who was at the meeting, but it was a good start.

I really hope that both initiatives can meet their aspirations and deal with the substantial challenges they face.

David Pannell, The University of Western Australia

97 – Regional environmental management in Australia

Australia’s main policy programs for conservation of land, water and biodiversity are delivered by a set of 56 regional bodies. We have prepared a document describing how the institutional arrangements for these regional bodies vary, state by state.

The arrangements differ somewhat between different states and territories, even to the extent that there are different names for these bodies (Catchment Management Authorities in Victoria and New South Wales, a variety of names elsewhere).

There have been rapid and frequent changes in the arrangements and structures surrounding these bodies, including changes in the legislative powers of catchment management bodies, their responsibilities, their names, their reporting channels through government, and the names and structures of government agencies with which they must work. The rapidity of change can be gauged by the fact that a book chapter published in 2003 documenting catchment management institutional arrangements state by state (Ewing, 2003) was substantially out of date before the end of that year.

We have just completed a document that provides a snapshot of current arrangements, state by state. For those of us trying to work with regional bodies in more than one state, this is a valuable document. Read it here, but do so quickly before the arrangements change again!

David Pannell, The University of Western Australia

Further Reading

Pannell, D.J. Ridley, A., Seymour, E., Regan, P. and Gale, G. (2007). Regional natural resource management arrangements for Australian states: structures, legislation and relationships to government agencies, CRC for Plant-Based Management of Dryland Salinity, University of Western Australia, here (129k pdf file)

96 – Economic questions for environmental managers

Economics can help environmental managers in a wide variety of ways. Here is a list of questions and issues that economic analysis can help to address.

There is a workshop in Perth this week about the potential contribution and role of economics (and other social sciences) in supporting regional environmental management bodies. The focus is on land degradation and other environmental issues that depend on how private lands are managed.

I thought that a useful way to explain this briefly would be to present a range of specific questions that economics can help to answer. They are broken up into groups, according to whether they apply at the farm level, the catchment level, the regional level, or the national level.

Farm level

• Are particular farming practices (environmentally friendly ones) likely to be attractive to commercial landholders? Under what circumstances?

  • How do new land-use options that are intended to be environmentally friendly best fit into the farming system? In which rotations? On which soil types? What other adjustments on the farm will be beneficial if the new land use is adopted?.
  • What features of new farming practices are the main drivers of their farm-level economics?
  • Which options are likely to be win-win for farmers and the environment?

Sometimes people assume that to be useful for environmental managers, economic analysis has to directly model the environmental processes of concern. This is not always correct. The above questions are important for environmental managers, but they can be addressed without explicitly modelling the environmental impacts of the new practices.

The catchment level

  • What are the trade-offs between economic outcomes and environmental outcomes at the catchment scale? (to help set targets).
  • How large (in economic terms) are are the off-site/downstream economic impacts (positive or negative) from particular farming practices?
  • How would agricultural management need to be adjusted in a catchment to achieve particular environmental targets at least cost?

Regional level

  • Is a particular program or intervention by the regional body worthwhile? (benefit:cost analysis)
  • Which policy tool is most appropriate in a particular case? (e.g. extension, grants, regulation, MBIs, R&D, direct intervention with engineering, no action). Different tools suit different circumstances (Ridley and Pannell, 2005; Pannell, 2006).
  • How should the funds of the environmental program be targeted to achieve the greatest environmental benefit for the available resources?
  • How should the regional body strike a balance between (a) highly targeted investment in on-ground works that pays off in the relative short term, and (b) investment in development of new land-management options, that is less targeted and slower to pay off, but applicable over much larger areas, and would reduce the cost of subsequent targeted investments?
  • How should economic policy instruments (MBIs in Australian parlance) be designed and implemented to achieve the greatest benefits?
  • What is the value of an environmental improvement? (non-market valuation)

National or international level

  • What are the market prospects for products from a new environmentally friendly land use?

Other positive features of economics when used to address these questions

  • Economic modelling helps to integrate biological and physical information within a consistent framework. Economists working on these issues are used to talking to various disciplines.
  • Economics deals well with trade-offs, which are an essential feature of environmental management.
  • Economics helps to frame the discussion in a way that is useful for decision making.
  • Economics helps to prioritise which of the many unknowns are the important ones.
  • Economics can explicitly deal with uncertainty in a variety of ways.

David Pannell, The University of Western Australia

Further Reading

Pannell, D.J. (2001). Economic Dimensions of Landcare, State Landcare Conference 2001, 11-14 September 2001, Mandurah Western Australia, pp. 131-144. Full paper (74K)

Pannell, D.J. (2003). Heathens in the chapel? Economics and the conservation of native biodiversity, Presented at a workshop of the Cooperative Research Centre for Plant-Based Management of Dryland Salinity, “Biodiversity Values in Agricultural Landscapes”, Rutherglen, Victoria, 14-15 October 2003. Full paper (109K)

Later published as:

Pannell, D.J. (2004). Heathens in the chapel? Application of economics to biodiversity, Pacific Conservation Biology 10(2/3): 88-105.

Pannell, D.J. (2006). Public benefits, private benefits, and the choice of policy tool for land-use change, Full paper (150K)

Pannell, D.J., Marshall, G.R., Barr, N., Curtis, A., Vanclay, F. and Wilkinson, R. (2006). Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture 46(11): 1407-1424. Access paper at Journal web site here. Pre-publication version available here (161K).

Ridley AM and Pannell DJ (2005). SIF3: An investment framework for managing dryland salinity in Australia. SEA Working paper 1901. CRC for Plant-based Management of Dryland Salinity, University of Western Australia, Perth. http://dpannell.fnas.uwa.edu.au/sif3.htm