Issue Brief for the Africa Sustainable Agriculture BAA Workshop: Investment in Sustainable Agriculture as a Means to Avoid Deforestation: The Importance of Governance

Governments and their international development partners rarely explicitly recognize the relationship between agricultural investment and the expansion of fields and pastures into forests when investing in agriculture. As a result, the assumption that agricultural intensification will diminish agriculture-driven deforestation often remains just that – an assumption that holds up poorly. The Royal Society (2009) and Montpellier Panel (2013) make the case that to be "sustainable," agriculture must not expand into natural lands. Governments create the larger context, and it often favors deforestation. Existing government policy strongly influences the risks new agricultural investment creates for forests. Policies unrelated to forestry or land-use often produce agricultural expansion that is unconstrained by policies intended to protect forests. Governmental policies in a broad range of sectors produce indirect, unintended, unrecognized, and poorly understood impacts on forests. Fiscal policy, for example, influences agricultural expansion into forests most directly by increasing the availability of capital to invest. Economic modeling suggests that, in the developing countries with extensive forest cover, increased government spending speeds deforestation. Greater access to credit has the same impact. In a well-studied example, restrictions on agricultural credits in Brazil contributed to reductions in deforestation rates. Trade liberalization sets the groundwork for the expansion of the capital-intensive production of export commodities. The trade liberalization in the 1980s unleashed the rapid expansion of beef and soybean production in Brazil and Bolivia. Governments foster this growth by subsidizing inputs, levying value-added taxes, and promoting competitive exchange rates and low inflation. Transportation policy also influences the rate and location of agricultural expansion into forests. In the Amazon, roads planned and constructed by government, as well as unofficial private roads, mediate the location of settlements, agriculture, and deforestation. Targeted policies may do little to constrain agricultural expansion. Land-use planning and zoning, for example, determine the siting and management of protected areas, concessions, and zones for agriculture. However, in practice, land-use planning in the developing world resembles "organized anarchy" involving smallholders, international investors, government officials, civil society, and representatives of the donor community. Governments often don't undertake the process holistically; they plan land use in an ad hoc manner, focusing on zoning specific high-priority areas. The siting and management of protected areas also have a significant impact on deforestation. Protected areas support greater biodiversity and experience less deforestation than comparable areas outside and around them, especially in the tropics. However, governments create protected areas in locations with low population and economic pressures. The overall impact of governmental efforts may be minimal, as many countries do not have the capacity to effectively monitor forest use and enforce penalties, especially in remote areas. The allotment and regulation of concessions also contribute to deforestation. Governments manage forest by allocating large tracts of land for defined periods of time for commercial uses, such as plantation agriculture, timber, and mining. By definition, allotting forest concessions for tree crop plantations accelerates forest conversion to agriculture. Land tenure policy and its enforcement also play a crucial role in deforestation. Tenure regimes create opportunities and incentives for farmers to increase investment in agricultural lands and clear (or not clear) additional forest. Investment-specific policies, such as payments for ecosystem services and certification schemes, have been attempted to fill a perceived void in the governance of natural resources. However, these policies may not be effective in constraining agricultural expansion into forests. A comprehensive approach that takes into account the complex relationships between agricultural investment, deforestation, and government policies is necessary to address the issue of deforestation.