TRANSFORMING AGRICULTURAL SUPPLY CHAINS TOWARDS A GREEN ECONOMY By Nathan Leibel Eddy Russell

Presentation Outline Introduction Key success areas/ lessons Threats, challenges and opportunities for action 5 Key thematic questions/issues Economic implications Policy and governance requirements Concluding remarks Recommendations for Green Economy Plan

Introduction - Agricultural construct 15% SA land under cultivation (approx. 50 million hectares) million ha irrigated; Agricultural contributed R36 billion in 2009 ; Main crops: Corn, wheat, many other niche crops; Supplied through a combination of commercial, small holder, subsistence farming; Main Problems for green economy: Unsustainable agricultural practices, low wages, limited credit access, human capacity issues, weak rural institutions, inadequate infrastructure (including access to markets), low technology access and worsening climate change.

Key success areas/ lessons Shifting some of this burden using Market Based Instruments rather then public funds i.e. using supply chains to; i.e. Drive eco-labeling and their markets e.g. flowers / wine industry / badger friendly honey i.e. Other PES markets i.e. carbon credits, water payments, biodiversity payments. UNDP is tackling sustainability issues using a supply chain approach through the development of mainstreaming projects that protect biodiversity in production landscapes, and through the creation of a new UNDP facility the “Green Commodities Facility” that focuses on sustainable production.

Threats, Challenges and Opportunities for action Threats : loss of biodiversity and ecosystem services; globalization of commodities; national food security; climate change; Challenges – health, education, support services (production), lack of infrastructure (roads, irrigation, storage), credit access, incentives for sustainability, finding the right policy/regulation/legislative tools ; Opportunities – International green markets, engaging private sector supply chains, consumer awareness, increasing agricultural employment, reduced food prices.

5 Key thematic questions/issues Best ways to promote and drive sustainable production? What financing mechanism can we use to promote sustainable production – MBI? Public funds? A combination? How do we create and strengthen the appropriate tools to drive sustainable agriculture? How do we better involve private sector supply chains to promote sustainable sourcing operations? What is the most efficient and timely way of raising consumer awareness? Who pays?

Economic implications Exports WILL grow, need sustainable production practices; Import issues – subsidized goods from Europe; Rising input costs i.e. fertilizers etc, Water shortages for irrigation – 50% water in SA used for agriculture; Raised awareness of green goods and options to buy them i.e. support eco-labels (new markets and premiums); By greening upstream supply chain processes, more jobs will naturally flow at each supply chain step. Given this, investment in efforts to protect the environment’s ability to deliver ecosystem services becomes crucial

Policy and governance requirements Remove restrictive policy; Farmer support services, improve human capacity, strengthen rural institutions; Tax breaks for green orientated supply chains; Fast tracking registration processes for green investments; the need for a national clearing house? Creating national standards for sustainable production.

Concluding remarks “We need to work together towards a greener economy…. the continuation of unsustainable production practices and the unsustainable use of priceless public resources i.e. water, soils, forests, etc will not last forever. We all have a vital role to play, and we are far from powerless. Your purchasing choice can and will play a pivotal role in the transformation of the consumer market place. This statement crosses all borders… from who you chose as your banker, to what you buy at your local supermarket – you indeed have a choice and buying power.”

Recommendations Short: Increase awareness campaigns for green goods Medium: Promote and strengthen market based instruments i.e. certification, that lead to sustainable management of production landscapes Long: Institutionalize agriculture best practices/standards within national policy.

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