As these examples illustrate, the level of ambition selected for each menu item in each of the three combined scenarios ultimately reflects our educated guess as to how hard it will be to achieve. Other researchers may reasonably disagree with our choices. The purpose of this exercise is to illustrate the kinds of combinations of menu items that could close the three gaps.

Table 32-1 shows the level of ambition we adopted for each menu item in each of the three combined scenarios. More detailed discussion of the rationale behind each level of ambition is provided in each of the relevant menu item chapters of this report.

## Summary of the Baseline and Combined Scenarios

<table><caption>Table 32-1 | Summary of the GlobAgri-WRR 2050 baseline projection and three combined scenarios</caption><thead><tr><th>MENU ITEM</th><th>2050 BASELINE</th><th>COORDINATED EFFORT</th><th>HIGHLY AMBITIOUS</th><th>BREAKTHROUGH TECHNOLOGIES</th><th>COMMENT</th></tr></thead><tbody><tr><td colspan="6">DEMAND-SIDE SOLUTIONS</td></tr><tr><td colspan="6">Course 1. Reduce growth in food demand</td></tr><tr><td>Reduce food loss and waste</td><td>Rate of food loss and waste (24% of calories globally) maintained in each country and food type</td><td>10% reduction in rate of food loss and waste</td><td>25% reduction in rate of food loss and waste</td><td>50% reduction in rate of food loss and waste</td><td>The Coordinated Effort seems plausible because the United Kingdom reduced its food loss and waste by 14% between 2007 and 2012. A 25% reduction seems possible as an outer limit, but a 50% reduction seems unlikely without breakthroughs in technology (e.g., improved storage systems or technology that prevents spoilage for longer).</td></tr><tr><td>Shift to healthier and more sustainable diets</td><td>88% increase in demand for ruminant meat between 2010 and 2050 as incomes grow across the developing world</td><td>Ruminant meat demand increases only 69% above 2010 levels, and calories shift to pulses and soy. This represents a 10% reduction in ruminant meat demand relative to baseline.</td><td>Ruminant meat demand increases only 32% above 2010 levels, and calories shift to pulses and soy. This represents a 30% reduction in ruminant meat demand relative to baseline.</td><td>Same as Highly Ambitious</td><td>We do not include reductions in total consumption of animal-based foods in the combination scenarios because our baseline scenario (based on FAO projections) is arguably conservative in projecting "business-as-usual" demand for these foods. But U.S. and European experience shows that large reductions in beef demand are possible. A global 30% reduction in ruminant meat demand (relative to 2050 baseline) would require reductions of more than 20% in Europe, 40% in North America and Russia, and 60% in Brazil relative to 2010 levels, which we consider highly ambitious.</td></tr></tbody></table>
<table><caption>Table 32-1 | Summary of the GlobAgri-WRR 2050 baseline projection and three combined scenarios (continued)</caption><thead><tr><th>MENU ITEM</th><th>2050 BASELINE</th><th>COORDINATED EFFORT</th><th>HIGHLY AMBITIOUS</th><th>BREAKTHROUGH TECHNOLOGIES</th><th>COMMENT</th></tr></thead><tbody><tr><td>Avoid competition from bioenergy for food crops and land</td><td>Crop-based biofuels maintained at 2010 share of global transportation fuel (2.5%)</td><td>Both food and energy crop-based biofuels phased out</td><td>Same as Coordinated Effort</td><td>Same as Coordinated Effort</td><td>Our analysis shows no environmental or food security benefits from these biofuels, so phasing them out is solely a political question rather than an economic or technical question.</td></tr><tr><td>Achieve replacement-level fertility rates</td><td>UN medium fertility estimate; global population 9.8 billion in 2050</td><td>UN low fertility estimate in sub-Saharan Africa; global population 9.5 billion in 2050</td><td>Sub-Saharan Africa fertility drops to replacement level by 2050; global population 9.3 billion in 2050</td><td>Same as Highly Ambitious</td><td>Although the UN "low fertility" estimate is plausible, each new UN population projection since 2012 has revised sub-Saharan Africa's population in 2050 upward since the region's fertility rates have not dropped as rapidly as previously projected. Evidence from other countries of rapid drops in fertility rates nevertheless suggests that the Highly Ambitious scenario is possible.</td></tr></tbody></table>

SUPPLY-SIDE SOLUTIONS

Course 2. Increase food production on existing agricultural land

<table><tr><td>Increase livestock and pasture productivity</td><td>62% growth in beef output per hectare of pastureland, 53% growth in dairy output per hectare, and 71% growth in sheep and goat meat output per hectare</td><td>Same as baseline</td><td>Productivity growth is 25% faster, resulting in 67% growth in beef output per hectare, 58% growth in dairy output per hectare, and 76% growth in sheep and goat meat output per hectare</td><td>Same as Highly Ambitious</td><td>Because the baseline projection already includes faster efficiency gains than in the past 50 years, we maintain the baseline in the Coordinated Effort scenario. However, because pure technical potential is probably higher, we increase this level in Highly Ambitious scenario. Although improved breeding is critical to all progress, we foresee no breakthrough technologies.</td></tr><tr><td>Plant existing cropland more frequently</td><td>5% increase in cropping intensity between 2010 and 2050 (to 89%)</td><td>10% increase in cropping intensity between 2010 and 2050 (to 93%)</td><td>Same as Coordinated Effort</td><td>Same as Coordinated Effort</td><td>Extremely limited information on potential to increase double-cropping or reduce fallow periods—particularly without irrigation expansion—bars any confident predictions. But modest FAO prediction in the baseline leads us to estimate some higher potential in Coordinated Effort scenario.</td></tr></table>
<table><caption>Table 32-1 | Summary of the GlobAgri-WRR 2050 baseline projection and three combined scenarios (continued)</caption><thead><tr><th>MENU ITEM</th><th>2050 BASELINE</th><th>COORDINATED EFFORT</th><th>HIGHLY AMBITIOUS</th><th>BREAKTHROUGH TECHNOLOGIES</th><th>COMMENT</th></tr></thead><tbody><tr><td>Improve crop breeding to boost yields</td><td rowspan="3">48% increase in crop yields above 2010 levels (similar to average linear rates of yield growth from 1962 to 2006)</td><td rowspan="3">Same as baseline</td><td rowspan="3">Crop yields rise to 56% above 2010 levels (20% improvement over baseline growth rate)</td><td rowspan="3">Crop yields rise to 69% above 2010 levels (50% improvement over baseline growth rate)</td><td rowspan="3">Because baseline yields assume faster growth rates than recent decades, we believe they already require a large-scale, global coordinated effort. But technical potential to boost yields could allow a faster growth rate in the Highly Ambitious scenario, and new molecular biology methods suggest capacity for breakthrough technologies with adequate research effort.</td></tr><tr><td>Improve soil and water management</td></tr><tr><td>Adapt to climate change</td></tr><tr><td colspan="6"><strong>Course 3. Protect and restore natural ecosystems and limit agricultural land-shifting</strong></td></tr><tr><td>Link productivity gains with protection of natural ecosystems</td><td>Linkage prevents most shifting of locations of agricultural land encouraged by yield gains</td><td>Same as baseline</td><td>Same as baseline</td><td>Same as baseline</td><td>Viewed globally, helping farmers to boost yields (Course 2) while at the same time avoiding gross agricultural land expansion is a necessary and cost-effective strategy to stabilize the climate. Since yield gains are realized in Course 2, this linkage to ecosystem protection is a political rather than a technical or economic challenge and belongs in all scenarios.</td></tr><tr><td>Limit inevitable cropland expansion to lands with lower environmental opportunity costs</td><td>Inevitable land expansion is limited such that carbon effects are offset by the next menu item (reforestation)</td><td>Same as baseline</td><td>Same as baseline</td><td>Same as baseline</td><td>Avoided conversion of forests and other natural ecosystems is embedded in the actions to reduce demand (Course 1) and increase crop and livestock production on existing agricultural land (Course 2).</td></tr><tr><td>Reforest abandoned, unproductive, and liberated agricultural lands</td><td>Reforestation of lands with little agricultural potential offsets carbon effects of inevitable shifting of locations of agricultural land</td><td>Same as baseline</td><td>Same as baseline</td><td>80 Mha of liberated land fully reforested (to achieve 4 Gt CO<sub>2</sub>/year target)<br/>585 Mha of liberated land fully reforested to offset all remaining agricultural production emissions</td><td>Because of the ambitious nature of our strategies to liberate agricultural lands, we are reluctant to place too much emphasis on potential for large-scale reforestation. We therefore show two scopes of potential carbon sequestration gains from reestablishment of natural vegetation on liberated land in our Breakthrough Technologies scenario, which are shown as annual emissions offsets over a 40-year period.</td></tr></tbody></table>
<table><caption>Table 32-1 | Summary of the GlobAgri-WRR 2050 baseline projection and three combined scenarios (continued)</caption><thead><tr><th>MENU ITEM</th><th>2050 BASELINE</th><th>COORDINATED EFFORT</th><th>HIGHLY AMBITIOUS</th><th>BREAKTHROUGH TECHNOLOGIES</th><th>COMMENT</th></tr></thead><tbody><tr><td>Conserve and restore peatlands</td><td>Annual peatland emissions stay constant at 1.1 Gt CO<sub>2</sub>e between 2010 and 2050</td><td>50% reduction in annual peatland emissions</td><td>75% reduction in annual peatland emissions</td><td>Same as Highly Ambitious</td><td>Although politically challenging, high levels of peatland restoration are probably an economically rational mitigation option. Technical potential suggests the possibility of increased hectares in the Highly Ambitious scenario, but some drained peatlands are in such intensive agricultural use or disrupted by changes in water flows that restoration of these peatlands is unfeasible.</td></tr><tr><td colspan="6">Course 4. Increase fish supply</td></tr><tr><td>Improve wild fisheries management</td><td>10% decline in wild fish catch between 2010 and 2050</td><td>Wild fish catch stabilized at 2010 level by 2050</td><td>Same as Coordinated Effort</td><td>Same as Coordinated Effort</td><td>Strategies to curb overfishing are well documented, and literature suggests that optimal fisheries management could even lead to increases in annual wild fish catch above 2010 levels, but overfishing remains near historical highs. Coordinated effort would be necessary just to maintain 2010 catch levels, and since optimal management in all major fishing countries seems overly optimistic, we decline to include scenarios of increases.</td></tr><tr><td>Improve productivity and environmental performance of aquaculture</td><td>10% increase in aquaculture production efficiencies between 2010 and 2050 across the board</td><td>50% of extensive pond production switches to semi-intensive production, and 50% of semi-intensive switches to intensive</td><td>Same as Coordinated Effort, plus 20% increase in aquaculture production efficiencies between 2010 and 2050 across the board</td><td>Same as Highly Ambitious</td><td>Shifts to more intensive production are technically possible although costs and feasibility will vary by location. Aquaculture is a young industry and additional efficiency gains (relative to terrestrial animals) seem possible.</td></tr></tbody></table>
<table><caption>Table 32-1 | Summary of the GlobAgri-WRR 2050 baseline projection and three combined scenarios (continued)</caption><thead><tr><th>MENU ITEM</th><th>2050 BASELINE</th><th>COORDINATED EFFORT</th><th>HIGHLY AMBITIOUS</th><th>BREAKTHROUGH TECHNOLOGIES</th><th>COMMENT</th></tr></thead><tbody><tr><td colspan="6">Course 5. Reduce GHG emissions from agricultural production</td></tr><tr><td>Reduce enteric fermentation through new technologies</td><td>Enteric methane emissions of 3.4 Gt CO<sub>2</sub>e in 2050 (51% above 2010 level)</td><td>30% emissions reduction from half of dairy cows, and one-quarter of beef cattle—leading to a 9% reduction in methane emissions from ruminants (38% growth above 2010 level)</td><td>30% emissions reduction from all dairy cows, half of beef cattle, and one-sixth of sheep—leading to an 18% methane emissions reduction from ruminants (24% growth above 2010 level)</td><td>30% methane emissions reduction from all ruminants, including those permanently grazed (6% growth above 2010 level)</td><td>Recent progress in feed additives suggests the potential for 30% reductions but only in cattle that can be easily fed additives daily, and possibly, many times. However, the technical potential exists to extend to all cattle through daily feeding. No credible science, however, suggests higher potential with additives free of other major environmental or health limitations.</td></tr><tr><td>Reduce emissions through improved manure management</td><td>Manure management emissions of 770 Mt CO<sub>2</sub>e in 2050 (31% above 2010 level)</td><td>40% reduction of methane emissions from wet manure (14% growth above 2010 level)</td><td>80% reduction of methane emissions from wet manure plus 20% reduction of all other manure management emissions (17% reduction below 2010 level)</td><td>Same as Highly Ambitious</td><td>Digesters can greatly reduce emissions from wet manure compared to baseline if carefully implemented, and solid separation can probably reduce nitrous oxide emissions generally, although efforts must reach vast numbers of farms. Although other technologies may emerge, they are too speculative to include here.</td></tr><tr><td>Reduce emissions from manure left on pasture</td><td>Emissions from manure left on pasture of 653 Mt CO<sub>2</sub>e in 2050 (46% above 2010 level)</td><td>Same as baseline</td><td>20% reduction of nitrogen left on pastures for nonarid systems (31% growth above 2010 level)</td><td>40% reduction of nitrogen left on pastures for nonarid systems (15% growth above 2010 level)</td><td>Most promising technologies involve nitrification inhibitors either spread on intensively grazed farms or consumed by animals. Because the technology is not so advanced, we include them only in the two more aggressive scenarios yet at modest levels of progress.</td></tr><tr><td>Reduce emissions from fertilizers by increasing nitrogen use efficiency</td><td>Nitrogen use efficiency grows from 46% in 2010 to 48% in 2050</td><td>57% nitrogen use efficiency due to a range of management measures</td><td>61% nitrogen use efficiency due to a range of management measures</td><td>67% nitrogen use efficiency due to a range of management measures plus new technologies</td><td>Coordinated Effort assumes better general management while Highly Ambitious and Breakthrough Technologies assume different levels of progress on changing nitrogen compounds (including inhibitors), and possibly in crop breeding to enhance efficiency.</td></tr></tbody></table>
<table><caption>Table 32-1 | Summary of the GlobAgri-WRR 2050 baseline projection and three combined scenarios (continued)</caption><thead><tr><td>MENU ITEM</td><td>2050 BASELINE</td><td>COORDINATED EFFORT</td><td>HIGHLY AMBITIOUS</td><td>BREAKTHROUGH TECHNOLOGIES</td><td>COMMENT</td></tr></thead><tbody><tr><td>Adopt emissions-reducing rice management and breeds</td><td>Rice methane of 1.3 Gt CO<sub>2</sub>e in 2050 (13% above 2010 level)</td><td>10% reduction in rice methane (17% below 2010 level) thanks to new water management practices and new rice breeds</td><td>Same as Coordinated Effort</td><td>Same as Highly Ambitious, plus 20% faster rate of rice yield gain (31% reduction of rice methane below 2010 level)</td><td>Alternate wetting and drying (AWD) and straw management are proven technologies but require major efforts for implementation, probably including improvements in many irrigation systems. Science shows some rice varieties have lower methane emissions and new breeds have potentially lower emissions. High crop yields in some locations also suggest potential for higher yields if full breeding potential is utilized.</td></tr><tr><td>Increase agricultural energy efficiency and shift to non-fossil energy sources</td><td>25% decrease in energy emissions per unit of agricultural output between 2010 and 2050</td><td>Same as baseline</td><td>50% decrease in energy emissions per unit of agricultural output between 2010 and 2050</td><td>75% decrease in energy emissions per unit of agricultural output between 2010 and 2050</td><td>Because baseline incorporates increases in energy efficiency, we consider that it already requires coordinated effort. Highly Ambitious effort could further reduce emissions through incorporation of renewable energy. The Breakthrough Technologies scenario requires new technologies for nitrogen synthesis in fertilizer manufacturing.</td></tr><tr><td>Focus on realistic options to sequester carbon in agricultural soils</td><td>Soil carbon gains sufficient to assure no net loss of soil carbon globally and contribute to yield gains</td><td>Same as baseline</td><td>Same as baseline</td><td>Same as baseline</td><td>The most promising opportunity for soil carbon gains are those that would result from increased productivity, and thus are already built into our baseline and Course 2. Because of the scientific uncertainty, we do not rely on additional soil carbon gains for offsetting ongoing agricultural production emissions.</td></tr></tbody></table>
<figure><img src="image_187.png" /></figure>
A TALE OF THREE
GAPS, REVISITED

In this chapter, we quantify the contribution of each of the
combined scenarios to reducing the food gap, the land gap, and
the GHG mitigation gap.
Table 32-1 summarizes the components of each combined scenario. The “waterfall charts” in this chapter show the role played by the various menu items (and courses) in each combined scenario. Because the quantitative effects of menu items to some extent depend on or affect others, simply adding the effects of each individual menu item would not correctly calculate the effect of any combination of menu items. We therefore employ a form of mathematical averaging to estimate the distinct role of each item in a combined menu.³

As discussed in Chapter 2, we define the food gap as the entire gap between crop calories produced in 2010 and those required to feed everyone in 2050 under the baseline scenario. This definition of the gap allows us to focus on demand-side measures that can reduce the size of the gap and thereby assist in closing the land and GHG mitigation gaps. Narrowing the food gap also provides greater assurance that the world will produce enough food to feed everyone nutritiously and at a price they can afford.

In the case of land use and GHG mitigation, the gaps represent the difference between our expected area of agricultural land and level of agriculture-related emissions in 2050 under a “business-

as-usual” scenario (our 2050 baseline) and the targets for a sustainable food future; that is, net zero agricultural land expansion and agricultural emissions at or below 4 gigatons carbon dioxide equivalent (Gt CO₂e) per year. See Chapter 2 in “Scope of the Challenge and Menu of Possible Solutions” for a full explanation of the food, land, and GHG mitigation gaps.

## Understanding Our Baseline Scenario

It is important to repeat that our business-as-usual baseline scenario already assumes significant progress in agricultural productivity, based on projections by the Food and Agriculture Organization of the United Nations (FAO) and our own effort to project gains in livestock and pasture productivity. Agricultural productivity gains built in to the 2050 baseline close more than 80 percent of the land gap and roughly two-thirds of the GHG mitigation gap that would occur if no productivity gains occurred after 2010 (Figure 33-1). All the combined scenarios therefore focus on *additional* productivity gains beyond our baseline, as well as other menu items that reduce demand for agricultural products or that further reduce GHG emissions.

<figure><img src="image_188.png" /><figcaption>**Figure 33-1** | Improvements in crop and livestock productivity already built in to the 2050 baseline close most of the land and GHG mitigation gaps that would otherwise exist without any productivity gains after 2010</figcaption></figure>

Source: GlobAgri-WRR model.
Table 33-1 summarizes the results of the three combined scenarios in terms of their contribution to closing the food, land, and GHG mitigation gaps and their effects on absolute changes in agricultural land area and GHG emissions by 2050. For reference, the table also summarizes the results of our baseline scenario (business-as-usual with built-in productivity gains) and the “no productivity gains after 2010” scenario, in which we assume no change in crop yields or pasture and livestock productivity beyond 2010 levels.

## A caveat on the contribution of individual menu items

Within the combined scenarios, the contribution to closing gaps made by individual menu items does not illustrate the potential gains *relative to effort* (e.g., cost of menu item implementation) because the size of the contribution of each menu item inherently reflects the scale at which that menu item is defined. For example, we define our menu item “reduce food loss and waste” as a single global-

scale percentage reduction in all sources of loss or waste of all plant- and animal-based foods. That definition results in enormous land savings globally but requires changes by millions of farms, food processors, and retailers, as well as by billions of consumers all over the world. The contribution would appear much smaller if we had instead defined 100 or 1,000 separate menu items for reducing food loss and waste differentiated by region, food type, and stage in the food supply chain. Such an analysis was not possible due to lack of reliable information about potential reductions at these more granular scales.

By contrast, our menu item “achieve replacement-level fertility rates” is defined at the regional level. We focus on the benefit of reducing fertility rates in sub-Saharan Africa alone, since all other regions are projected to have fertility rates at or below replacement level by 2050. The population of sub-Saharan Africa will account for less than one-quarter of the world’s projected 2050 population, but we present

<table><caption>Table 33-1 | Global effects of combined 2050 scenarios on the three gaps</caption><thead><tr><th rowspan="2">SCENARIO</th><th rowspan="2">FOOD GAP, 2010-50 (%)</th><th colspan="3">CHANGE IN AGRICULTURAL AREA, 2010-50 (MHA)</th><th colspan="4">ANNUAL GHG EMISSIONS, 2050 (GT CO<sub>2</sub>E)</th><th rowspan="2">GHG MITIGATION GAP (GT CO<sub>2</sub>E)</th></tr><tr><th>Pasture-land</th><th>Cropland</th><th>Total</th><th>Agricultural production</th><th>Land-use change<sup>a</sup></th><th>Peatlands</th><th>Total</th></tr></thead><tbody><tr><td>No productivity gains after 2010</td><td>62</td><td>2,199</td><td>1,066</td><td>3,265</td><td>11.3</td><td>25.8</td><td>1.1</td><td>38.2</td><td>34.2</td></tr><tr><td><strong>2050 Baseline</strong></td><td><strong>56</strong></td><td><strong>401</strong></td><td><strong>192</strong></td><td><strong>593</strong></td><td><strong>9.0</strong></td><td><strong>4.9</strong></td><td><strong>1.1</strong></td><td><strong>15.1</strong></td><td><strong>11.1</strong></td></tr><tr><td>Coordinated Effort</td><td>43</td><td>128</td><td>4</td><td>132</td><td>7.4</td><td>1.1</td><td>0.6</td><td>9.1</td><td>5.1</td></tr><tr><td>Highly Ambitious</td><td>35</td><td>-390</td><td>-180</td><td>-570</td><td>5.5</td><td>0.0<sup>b</sup></td><td>0.3</td><td>5.8</td><td>1.8</td></tr><tr><td>Breakthrough Technologies</td><td>29</td><td>-446</td><td>-355</td><td>-801</td><td>4.4</td><td>0.0<sup>b</sup></td><td>0.3</td><td>4.6</td><td>0.6</td></tr></tbody></table>

Notes: Numbers may not sum correctly due to rounding.

a. Does not include peatland emissions.

b. Under the Highly Ambitious and Breakthrough Technologies combined scenarios, total agricultural area declines between 2010 and 2050. In order to keep estimates of associated emissions reductions conservative, here we do not credit any negative land-use change emissions as offsets against agricultural production emissions. We discuss the need to reforest “liberated” agricultural lands to offset agricultural production emissions in Chapter 20.

Source: GlobAgri-WRR model.
<figure><img src="image_189.png" /><figcaption>**Figure 33-2a** | The combined scenarios reduce the size of the food gap by reducing growth in demand (Coordinated Effort scenario)</figcaption></figure>

Note: Includes all crops intended for direct human consumption, animal feed, industrial uses, seeds, and biofuels.

Source: GlobAgri-WRR model.

in these tables the contribution of changes in sub-Saharan Africa's fertility rates to reducing the three gaps at the global level. The effects therefore appear comparatively small. Similarly, improvements in aquaculture appear to make modest contributions to closing the global gaps, but this is because farmed fish are likely to occupy "only" 40 million hectares (Mha) of ponds and make up roughly 1 percent of all calories consumed in 2050. Because we do not believe that sufficient reliable information exists to make quantitative economic estimates of future menu item costs, there is no obvious data-backed way to evaluate savings relative to scope of effort.

## Effects of the Combined Scenarios on the Food Gap

All of our three combined scenarios make a meaningful contribution to closing the food gap because each one has significant effects on demand for agricultural products (Figures 33-2a-c).

The demand-side menu items reduce the challenge of producing more food (as measured by crop calories) from the 56 percent increase needed between 2010 and 2050 in our baseline scenario to increases of 43 percent, 35 percent, and 29 percent,
<figure><img src="image_190.png" /><figcaption>**Figure 33-2b** | The combined scenarios reduce the size of the food gap by reducing growth in demand (Highly Ambitious scenario)</figcaption></figure>

Note: Includes all crops intended for direct human consumption, animal feed, industrial uses, seeds, and biofuels.

Source: GlobAgri-WRR model.

Viewed another way, the Breakthrough Technologies scenario reduces the size of the food gap by nearly half.

The biggest potential reductions in the food gap result from reductions in food loss and waste. Reductions in ruminant meat consumption do not significantly reduce the food gap (technically, a crop calorie gap) in this analysis because ruminants consume relatively few crops; however, this menu item is of far greater importance in closing the land and GHG mitigation gaps.

In the Coordinated Effort scenario, the phasing out of crop-based biofuels makes a significant contribution to closing the food gap. However, this estimate is contingent on the assumption in our baseline scenario that there will be no further growth in the share of crop-based biofuels in the transportation fuel mix, despite current public policy goals that seek to greatly expand this share. The assumption is likely optimistic. Changing public policies to phase out crop-based bioenergy production and avoid future expansion of land-based bioenergy production should be recognized as critical to closing the food gap.
<figure><img src="image_191.png" /><figcaption>Figure 33-2c | The combined scenarios reduce the size of the food gap by reducing growth in demand (Breakthrough Technologies scenario)</figcaption></figure>

Note: Includes all crops intended for direct human consumption, animal feed, industrial uses, seeds, and biofuels.

Source: GlobAgri-WRR model.
<figure><img src="image_192.png" /><figcaption>Figure 33-3a | Two of the three combined scenarios could more than close the land gap and liberate land for reforestation (Coordinated Effort scenario)</figcaption></figure>

Source: GlobAgri-WRR model.

## Effects of the Combined Scenarios on the Land Gap

All three scenarios have large consequences for closing the land gap (Figures 33-3a-c). In the Coordinated Effort scenario, cropland area remains relatively constant between 2010 and 2050, but pasture area still expands by 128 Mha. The Highly Ambitious and Breakthrough Technologies scenarios completely close the 593 Mha land gap and potentially make hundreds of millions of hectares available for other uses or for reforestation, which we discuss further below.

As discussed in Course 3 (Protect and Restore Natural Ecosystems and Limit Agricultural Land-Shifting), slower demand growth and increased

productivity do not guarantee the full potential benefits of avoided agricultural land expansion for protecting biodiversity and storing carbon. These changes, by themselves, do not prevent shifts in locations of agricultural land between and within regions and countries. Yield growth can even trigger further agricultural land expansion as farming becomes more profitable in some regions. To achieve reductions in agricultural land area and the associated environmental benefits, additional policies are necessary to reduce shifts in locations of agricultural land, avoid conversion of the most valuable and carbon-rich lands, and actively restore lands that will be abandoned as a result of some inevitable shifts in location of agriculture.
<figure><img src="image_193.png" /><figcaption>Figure 33-3b | Two of the three combined scenarios could more than close the land gap and liberate land for reforestation (Highly Ambitious scenario)</figcaption></figure>

Source: GlobAgri-WRR model.
<figure><img src="image_194.png" /><figcaption>Figure 33-3c | Two of the three combined scenarios could more than close the land gap and liberate land for reforestation (Breakthrough Technologies scenario)</figcaption></figure>

Source: GlobAgri-WRR model.
## Effects of the Combined Scenarios on the Greenhouse Gas Mitigation Gap

Under all three combined scenarios, the most difficult gap to close completely is the gap in GHG mitigation (Figures 33-4a-c), because it is difficult to reduce annual agricultural production emissions to the 4 Gt CO₂e target while providing enough food for everyone in 2050. Measures taken in the Coordinated Effort scenario would still leave total emissions from agriculture and land-use change at 9.1 Gt of CO₂e per year by 2050, more than 5 Gt above our 4 Gt target. The Highly Ambitious scenario reduces emissions to 5.8 Gt per year. Only the Breakthrough Technologies scenario, resulting in annual emissions of 4.6 Gt, gets close to the target. The implication is that it is easier to hypothesize scenarios that eliminate net land-use change than scenarios that eliminate production emissions. Reaching the 4 Gt goal would require major technological advances as well as full reforestation on at least 80 Mha of liberated agricultural land.

## The Potential of Reforestation and Savanna Restoration to Further Reduce Greenhouse Gas Emissions

Two of our three combined scenarios result in a net reduction in agricultural land area between 2010 and 2050—a total of 570 Mha in the Highly Ambitious scenario and roughly 800 Mha in the Breakthrough Technologies scenario. These reductions could be used to sequester carbon by reforesting land and restoring savannas by midcentury. The resulting carbon sequestration could count as negative emissions.

Although GlobAgri-WRR can estimate the potential GHG emissions reductions from reforestation and savanna restoration, we are concerned about fully crediting these potential gains for two reasons.

First, we believe that some shifting in the location of agricultural land (between and within regions and countries) is inevitable, and that such shifts will result in net positive amounts of GHG emissions, so some active reforestation of net abandoned land will be necessary just to offset the emissions from this agricultural land-shifting. Second, some amount of the “liberated” agricultural land under these three scenarios will likely be needed to accommodate projected expansion of urban areas and forest plantations.

Because of these caveats, in Figure 33-4c (Breakthrough Technologies scenario), we show first the potential for ecosystem restoration to achieve our 4 Gt CO₂e target, which would require restoring at least 80 Mha to natural vegetation and would generate an annual average of 0.6 Gt of negative emissions for 40 years.⁴

A variety of analyses have also suggested that to meet the more ambitious 1.5 degree warming target enshrined in the Paris Agreement, the world will need to use the land sector to achieve negative emissions.⁵ Typically, these scenarios do not require the elimination of nitrous oxide and methane emissions from agriculture, but they do require uses of land either for reforestation or some other mechanism for negative emissions—either to offset remaining emissions from other sectors (e.g., energy) or to reduce carbon dioxide levels after “overshooting” temperature targets. To reach a target of net-zero emissions in the land sector, restoration of natural vegetation on at least 585 Mha would be necessary, which would be 73 percent of the 801 Mha potentially liberated by our Breakthrough Technologies scenario.⁶ Thus we also show the potential to achieve net-zero emissions in Figure 33-4c (Breakthrough Technologies scenario) through restoring at least 585 Mha.
<figure><img src="image_195.png" /><figcaption>**Figure 33-4a** | Only the Breakthrough Technologies scenario comes close to closing the greenhouse gas mitigation gap; reforestation and peatland restoration would be necessary to meet the target of 4 gigatons per year (Coordinated Effort scenario)</figcaption></figure>
<figure><img src="image_196.png" /><figcaption>**Figure 33-4b** | Only the Breakthrough Technologies scenario comes close to closing the greenhouse gas mitigation gap; reforestation and peatland restoration would be necessary to meet the target of 4 gigatons per year (Highly Ambitious scenario)</figcaption></figure>
<figure><img src="image_197.png" /><figcaption>**Figure 33-4c** | Only the Breakthrough Technologies scenario comes close to closing the greenhouse gas mitigation gap; reforestation and peatland restoration would be necessary to meet the target of 4 gigatons per year (Breakthrough Technologies scenario)</figcaption></figure>

Note: Solid areas represent agricultural production emissions. Hatched areas represent emissions from land-use change.

Source: GlobAgri-WRR model.
<figure><img src="image_198.png" /></figure>
INSIGHTS FROM THE MENU COMBINATIONS

We believe that plausible paths exist toward closing the food, land, and GHG mitigation gaps and reaching our targets for world food production, agricultural land use, and emissions.

This chapter presents several insights that flow from our analysis of the three scenarios. Realizing the potential of these scenarios will require strong political and social commitments.
Truly closing the GHG mitigation and land gaps would require taking all reasonable actions globally that we know of today, which will entail changes on billions of hectares of land, implemented by tens of millions of farmers. Fortunately, even though we do not know enough to generate true economic estimates, all of the actions contemplated can plausibly be expected to impose only modest costs or even lead to economic benefits, as discussed throughout Courses 1–5.

## Achieving Even Our Coordinated Effort Scenario Requires Reversing a Wide Range of Current Trends

On the demand side, we rely on large reductions in ruminant meat consumption, relative to the 2050 baseline. However, as discussed in Chapter 6, many modelers project even larger global increases in consumption of animal-based foods than we do in our baseline. To take another example, our 2050 baseline assumes no increase in the share of biofuels in transportation—even though global policy is encouraging a fourfold increase. Current bioenergy strategies, if fully realized, could require harvesting levels of biomass equal to all the world's presently harvested crops, crop residues, wood, and forages consumed by livestock. And although we rely on large reductions in food loss and waste to close the three gaps, most food loss and waste reduction efforts are still in their infancy.

On the production side, the Coordinated Effort scenario requires faster rates of crop yield growth than historical rates (going back to the 1960s), but we have shown that recent yield trend lines (starting from the 1980s) are slower than those in our baseline, and far from the additional yield gains required. Ruminant meat and milk yield gains for the Coordinated Effort scenario require massive increases in output per hectare of grazing land—far greater than the output gains projected by extending a linear trend line from the 1960s.

## Four Categories of Menu Items Are Particularly Important at the Global Level

All menu items are needed to have any hope of achieving the 4 Gt per year emissions target. In focusing on the relative role of different actions, however, we emphasize four particularly important types of menu items:

- **Boost agricultural productivity.** Without the productivity gains already built into our baseline, agricultural land would expand by more than 3 billion hectares and emissions would rise to 38 Gt CO₂e/year, including emissions from land-use change. Productivity gains already in our baseline are responsible for closing two-thirds of the GHG mitigation gap and more than 80 percent of the land gap that would exist if there were no productivity gains at all between 2010 and 2050. Additional productivity gains play a relatively smaller role than built-in productivity gains in reducing the gaps defined by our baseline. But, when we add in the additional productivity gains required to meet our 4 Gt target, the role of productivity gains grows to 72 percent.⁷

- **Shift diets away from ruminant meat.** Reducing ruminant meat consumption by 30 percent globally, relative to the 2050 baseline, reduces emissions by more than 5 Gt and reduces agricultural land demand by more than 500 Mha. Assuming the yield gains in our baseline, this change alone nearly eliminates net land-use change on a global basis. We believe this menu item is particularly promising because relatively few people eat large quantities of ruminant meat, there are highly attractive alternatives to ruminant meat, and people in the United States and Europe have already reduced per capita beef consumption by one-third from peak levels in the 1970s.
■ **Reduce food loss and waste.** Globally reducing the rate of food loss and waste by 10, 25, or 50 percent would contribute significantly to closing all three gaps. However, we caution that while there are abundant options, there is little precedent for achieving such large-scale reductions. In particular, as countries' economies develop, waste near the consumption side of the food supply chain tends to grow even as food loss near the production side decreases. The overall share of food produced that is lost or wasted tends to stay at similar levels although the sources of the loss and waste shift downstream.

■ **Restore peatlands and reforest liberated agricultural lands.** These menu items are essential to reach GHG mitigation targets. Because peatland emissions of more than 1 Gt CO₂e per year result from only 26 Mha, half of which has limited agricultural use, peatland restoration provides a highly promising mitigation opportunity. In addition, to achieve the 4 Gt target for 40 years, reforestation of at least 80 Mha of liberated agricultural land will be necessary, and additional reforestation will likely be necessary to compensate for emissions that result from shifting of locations of agricultural land between and within regions and countries.

## Achieving Technological Innovations

Even our Coordinated Effort scenario requires measures such as further refinement of additives to reduce enteric methane emissions from livestock, new forms of manure management, and accelerated energy conservation steps. However, none of our scenarios require innovations for which scientists have not already shown a promising path.

Agricultural production emissions are the hardest to reduce, but technological innovations could make significant reductions possible. One reason why production emissions may appear harder to reduce than emissions from land-use change is that there is less of a track record of production emissions reductions. The measures in our more ambitious scenarios can actually reduce agricultural land area, and we have some confidence in these results because the world has a long track record of increasing crop and pasture yields. Past yield gains reflect vast and expensive commitments by farmers, governments, and agriculture-related industries. By contrast, conscious efforts to reduce production emissions—except as a by-product of yield gains—have been miniscule. There is no track record of mitigation of production emissions that we can build into our baseline or our mitigation scenarios. Yet the reality is that we do not know what the world could achieve. For example, even in our Breakthrough Technologies scenario, we assume no more than a 30 percent reduction in enteric methane emissions through use of feed additives, and only a 10 percent reduction in methane emissions achieved by new rice varieties. With strong research efforts, larger reductions might become possible.
ENDNOTES

1. Some analyses regarding agriculture, land use, and climate change attempt to rank greenhouse gas mitigation potential into categories of low, medium, and high based on US$ per ton of emissions reduction and then develop combined scenarios based on cost. Economic estimates of agricultural mitigation potential tend to be low, in part because they focus on a small set of mitigation targets and in part because the ability to provide cost estimates for mitigation is highly limited. The data on costs of agricultural production today are rough, the distribution of these costs across different farms in different regions is even rougher, the knowledge of mitigation costs is limited, and for most practices that are not common today or that depend on new technology, quantitative cost estimates can become quite speculative. Therefore, we do not use cost to distinguish our low, medium, and high scenarios.

2. In 2050, we estimate that 77 percent of beef cattle (including buffalo) will be raised in mixed or urban production systems. Unlike dairy cow herds, which require milking every day, many farm animals in mixed systems lack direct human management every day. We estimate that roughly one-third of these bovines will have daily human feeding and could therefore be given a daily feed supplement. For milk production, we estimate that 86 percent of production will be in mixed or urban systems, and we perhaps conservatively estimate that 50 percent of all dairy cattle will be fed such an additive.

3. Simply summing each individual menu item in combined scenarios does not correctly estimate the effect of implementing all menu items together because the interactions among menu items reduce the effect of each menu item modeled separately. To scale the effect of each menu item, we used the following four-step process: (1) add up individual menu items' contributions as analyzed in Courses 1-5 to generate a "sum of the individual modeled results"; (2) use GlobAgri-WRR to estimate the reductions for each scenario; (3) estimate a ratio by dividing the result in step 2 by the result in step 3, which always produces a fraction less than 1; and (4) multiply the result in step 1 by the ratio in step 3. In effect, we downscale each individual menu item so that the sum of menu items equals the combined effect of implementing multiple menu items at the same time.

Because the GlobAgri-WRR model does not model emissions from existing peatland loss, we treated peatland emissions separately. GlobAgri-WRR, however, does account for new peatland conversions, so the effect of menu items in reducing new peatland conversions is counted as the effect of those menu items. For example, if reductions in waste lead to less growth in palm oil production, GlobAgri-WRR will project fewer emissions from additional peatland conversions to produce palm oil.

4. The GlobAgri-WRR model estimates that fully restoring 801 Mha would sequester 6.3 Gt CO₂e per year over 40 years. Therefore, to offset at least 0.6 Gt CO₂e per year and achieve the 4 Gt target would require restoring at least roughly 10 percent of that land, or 80 Mha. This calculation assumes that these carbon levels (approximating that of natural vegetation) could be achieved in 40 years. Many forests will continue growing and sequestering carbon over 40 years, but our estimates of carbon stocks for areas in natural vegetation do not assume restoration to pristine carbon stocks. Instead they are based on estimates of natural vegetation in turn based on measured carbon stocks of types of vegetation for these types and locations of ecosystems, and the great majority of the world's forests are already highly disturbed (Erb et al. 2017).

5. Rogelj et al. (2018), 60, Figure 2.26.

6. The GlobAgri-WRR model estimates that fully restoring 801 Mha would sequester 6.3 Gt CO₂e per year over 40 years. Therefore, to offset at least 4.6 Gt CO₂e per year and achieve a target of 0 Gt would require restoring at least roughly 73 percent of that land, or 585 Mha. See note 4 above for additional details on assumptions of carbon stocks in natural vegetation.

7. GlobAgri-WRR model.
## REFERENCES

To find the References list, see page 500, or download here: www.SustainableFoodFuture.org.

## PHOTO CREDITS

Pg. 402 Anguskirk, pg. 404 shankar s./Flickr, pg. 414 Elina Sazonova/Pexels, pg. 428 istockphoto.
<figure><img src="image_199.png" /></figure>
# Cross-Cutting Policies for a Sustainable Food Future

The menu items for a sustainable food future described earlier in this report focus heavily on technical opportunities and solutions to help drive implementation. But menu items cannot be implemented in isolation, and they are all subject to (or need) a variety of cross-cutting public and private policies. Chapters 35–37 discuss policies relating to farm structure, productivity, and poverty reduction; agricultural emissions mitigation and climate funding; and agricultural research and development.

## TABLE OF CONTENTS

* Chapter 35. Farm Structures, Large Land Acquisitions, Property Rights, and Contractual Arrangements 437

* Chapter 36. Carbon-Pricing Strategies and Financing of Climate-Smart Agriculture 455

* Chapter 37. Strengthening Research and Development 469
<figure><img src="image_200.png" /></figure>
# FARM STRUCTURES, LARGE LAND ACQUISITIONS, PROPERTY RIGHTS, AND CONTRACTUAL ARRANGEMENTS

Is there a conflict between the goals of increasing global food production and providing livelihood opportunities for the world's hundreds of millions of poor farmers and workers? Do large land acquisitions help or hinder these goals? Can the world sufficiently boost yields on smallholder farms or should large farms replace small farms? And if the world continues to support small farmers, what farm structures and property rights rules should policymakers support?
One of the challenges to answering these ques-
tions is the lack of a sound, quantitative definition
for “small farms.” Farm sizes and productivity per
hectare (ha) vary greatly from one part of the world
to another. Building on a 2008 landmark World
Bank report,¹ this chapter addresses these often-
contentious questions.

Large versus Small Farms

Public justification for consolidation of smallholder
farmland is rooted in a perception among many
analysts that large farms are more successful than
small farms.² For example, although small farmers
remain more numerous in Brazil, medium-sized
and large farms dominate agricultural production,
and their numbers and share of production and
production value in the country have increased in
recent years.³ Brazil's large farms can be regarded
as a model to replicate elsewhere. Small farms face
many obstacles to improving their productivity:⁴

- Financial institutions face higher transaction costs when dealing with many small farms rather than one large farm, making access to capital more expensive for small farmers.

- Poverty traps arise when subsistence farmers must sell critical assets to survive periods of hardship, which undermines their future production or productivity gains.

- Smallholders face challenges in meeting quality, sanitary, and/or environmental standards or other demands made by large purchasers such as supermarket chains.

In 1998, the economist Paul Collier attracted great attention when he argued that small farmers in Africa were unsuited to cope with “investment, marketing chains, and regulation [of food quality],” and called for the gradual replacement of “peasant farms” with larger commercial farms.⁵ In addition to pointing to the agricultural achievements of countries like Brazil, Collier pointed out that subsistence peasant farming is arduous and that farmers readily abandon subsistence farms when alternative job opportunities present themselves. To African governments faced with a history of poor agricultural production and limited resources, contracting with large-scale investors who will come in and upgrade agriculture therefore seems attractive.

In some countries, analysis supports the pure
production advantages of larger farms. Yields of
Brazilian maize and Chilean wheat, for example,
have been significantly higher on large farms.⁶ In
Indonesia and Malaysia, large oil palm plantations
have far higher yields than oil palms grown on most
smallholder farms.⁷

However, Collier’s argument touched off several
counterarguments by agricultural economists:

- In China and India, comparatively small farmers have led agricultural improvements. According to data from the Food and Agriculture Organization of the United Nations (FAO), in India, farms smaller than 5 ha account for 70 percent of all farm area, and farms smaller than 10 ha account for 87 percent.⁸ One 2011 study estimated the average farm size in China at 0.6 ha, and in India at 1.2 ha.⁹ Yet, in both countries, small farms achieve yields at least as high as those of large farms.¹⁰ In both countries, fertilizer use is high.¹¹ Based on Indian agricultural census data, the 2011 study found that small farmers actually used twice as much fertilizer as large farms per hectare, as well as more irrigation and high-yielding seeds. These findings reflect an intense effort on the part of small farmers to produce high yields, although there are environmental implications. Strong efforts by governments to support small farmers through credit programs, extension, and input subsidies played a major role in these developments.¹²

- In Africa, several studies have found that farms become less productive per hectare as they get bigger.¹³ The typical explanation is that small farmers put in greater effort per unit of land. Because of the consistency of this finding, the main academic debate around this phenomenon has focused on whether it is explained by poor data, by failure to include very large farms in the analysis, or by some uncontrolled factor, such as soil quality. But a recent review of studies on this issue confirms that larger farm size generally does lead to lower yields per hectare.¹⁴

- Improvements on small farms contribute more to poverty reduction than improvements on larger farms—at least absent concerted government efforts to transfer income from overall
economic improvement. As one analysis notes, “Smallholdings are typically operated by poor people who use a great deal of labor, both from their own households and from their equally poor or poorer neighbors. Moreover, when small-farm households spend their incomes, they tend to spend them on locally produced goods and services, thereby stimulating the rural nonfarm economy and creating additional jobs.”¹⁵

Yet the evidence in support of smaller farms in Africa has tended to exclude the largest farms. Studies showing higher productivity on small farms have typically focused on farms up to 10 ha.¹⁶ There is some evidence of a “U-shaped curve” with productivities rising again on the largest farms.¹⁷

In addition, even if small farms are often more productive per hectare, studies around the world tend to find that larger farms are often more productive per day of work.¹⁸ As a result, larger farms tend to have equal or lower costs of production per ton of crop.¹⁹

Good data are necessary to determine public policy but analyzing data on agricultural productivity is complicated. Some of the data on which research-

ers must rely are more than a decade old because national studies are expensive. The World Bank and FAO, both important sources of data, tend to analyze farm sizes and their characteristics on a rotating basis among different countries over many years. Although studies tend to group farms by area, area is a highly imperfect way of determining large and small farms. The size of farms as measured in hectares may not properly convey size from the standpoint of output or true scale of operation because agricultural lands have widely varying productivity. For example, “small farms” in grazing areas will often be larger than “medium-sized farms” in quality croplands.

Using the most recent available data—even though some national data may be more than a decade old—the best estimate placed the total number of farms around the world at 570 million.²⁰ Of these, farms smaller than 2 ha account for 80 percent of the total number, while they occupy only 12 percent of global agricultural land.²¹ In surveys of 14 African countries in 2000, 85 percent of farms were smaller than 2 ha.²²

Choosing any single size threshold to measure small and medium-sized farms is an imperfect approach, but the data suggest a few general developments:

<figure><img src="image_201.png" /></figure>
* In most developed countries, farms are becoming larger.²³ This trend reflects the increasing role of mechanization, reduced labor requirements, and increasing opportunities for workers off-farm.

* In Africa and Asia, average farm sizes (measured by both mean and median) tend to become smaller over time because the number of farm households is increasing, meaning that small farms are divided into smaller and smaller units.²⁴

* Although small farms are increasing in number, their average size is shrinking, and they do not appear to be increasing their share of farm area. In some countries small farms appear to be losing land to medium-sized or large farms. For example, one paper analyzing farms in Ghana between 1992 and 2012 found that even though the number of farms smaller than 5 ha grew by 37 percent, the percentage of farmland they occupied declined by 12 percent.²⁵ Meanwhile farms from 20 to 100 ha grew to occupy an additional 11 percent of the country's farmland. In Zambia, just between 2008 and 2014, the number of farms smaller than 5 ha grew significantly, but the percentage of farmland they occupied declined by 15 percent. By contrast, farms with 10 to 100 ha occupied an additional 10 percent of the country's land. A 2016 study in China also found that, while small farms continue to dominate, there is a growing class of medium-sized and larger farms.²⁶

The growing share of agricultural land held by medium-sized and larger farms may reflect a number of increasing economic opportunities that are not available to small farms.²⁷ As new technology requires more expensive seeds, fertilizers, machinery, and pesticides, challenges in raising capital become more important. Some small farms cannot take advantage of large machinery, even if it is affordable.²⁸ As supermarkets become a larger part

of the retail process and wish to deal with larger suppliers, and as quality and sanitary standards rise for high-value crops, small farms face more obstacles in accessing these markets.²⁹

Beyond national food production goals, there is also a question of which strategies are best for helping small farmers, particularly because small farms are often too small to support their owners with adequate income. One recent study found that even if African and Asian small farms took advantage of opportunities for technological innovation, they could not escape poverty, although they could somewhat boost incomes and food security.³⁰ Another study found that in Kenya it was very difficult for mixed crop/livestock farms smaller than 0.4 ha to satisfy farmers' income and food needs.³¹ The implication is that to escape poverty, small farms will generally need better market access and opportunities for off-farm incomes. One study across seven countries in Africa found that those two factors were strongly correlated with the food security of small farmers.³²

Overall, the evidence suggests that small farms can be productive if governments support their development, and that strongly pushing their purchase by or consolidation into large farms has not been an effective strategy. At the same time, powerful forces do encourage eventual economies of scale in agriculture, particularly at higher levels of development. In addition, small farms in many countries are on a trajectory to becoming too small to provide more than supplemental income for their owners. Even strong advocates of smallholder farming therefore view appropriate public investments in small farms as part of a strategy to help people to transition out of small farming. “This is a paradox of early development: the need for agricultural development to allow people to move out of agriculture.”³³
Recommended Policies Regarding Farm Sizes

The literature overall has a number of policy
implications, the essence of which is to let the
market play out—neither favoring large or small
farms, nor blocking farms from reaching their
appropriate size:

- In general, governments should not force small farms to consolidate or encourage large farms to take over small farms, as neither approach is likely to accelerate agricultural production or benefit the poor. Not only is the evidence of higher yields from even very large farms limited, there is even less evidence that pushing or forcing consolidation raises productivity. Oil palm plantations may be an exception, where large farms outperform small farms, but, at this time, clearing land for oil palm plantations contributes to large-scale deforestation and often has adverse consequences for indigenous people. The place of palm oil production in a sustainable food future will involve more protection of the rights of indigenous populations and targeting new production in the least environmentally harmful areas (as discussed in the next section).

- Even so, agricultural policy should support farms as they become more commercially oriented and increase their labor productivity. The aim of policy should be both to support productivity gains and allow farms to become more viable and not fight these developments as they occur. Policy should support these trends even though they might eventually result in less demand for agricultural labor. However, a fair and stable economic and social transition will depend on growth in other parts of the economy, particularly in the urban sector.

- Allowing farms to acquire smaller farms or to rent land—so long as transactions take place through market forces and are not pushed by governments—is a useful part of the economic growth process. As summarized by the World Bank study, the evidence generally supports the view that such transactions support rural incomes and often make it easier for small farmers to acquire land.³⁴ By contrast, restrictions on land sales “tend to drive transactions underground and undermine access to formal credit without addressing the underlying asymmetries of power, information, and access to insurance.”³⁵ This World Bank study appropriately recommends safety nets and even land taxes to achieve equity goals rather than restrictions on sales.

<figure><img src="image_202.png" /></figure>
## Large Land Acquisitions ("Land Grabbing")

In Madagascar in 2008, the government entered into a deal with the Daewoo Corporation to lease more than 1 million hectares (Mha) of land for 99 years at a minimal price. Although the deal was sufficiently unpopular that it led to the collapse of the government and eventual cancellation of the deal,³⁶ deals such as this one attracted world attention and led researchers to study what was going on. "Land grabbing" is complex, with important regional differences, and some concerns turned out to be unfounded. However, a picture does emerge that many governments have not been following neutral policies regarding farm size. Instead, they have been favoring large acquisitions that often do not compensate local people for what they are losing and do not lead to significant productivity gains. This process has also tended to involve clearing of at least quasi-natural habitats.

Comprehensive analysis of recent, large-scale land acquisitions is difficult. Governments do not disclose the details of most deals, and many countries

lack clear land registries that could reveal what is going on.³⁷ Despite these limitations, researchers have begun to tabulate large-scale land acquisitions and several themes have emerged from recent studies.

### Concluded acquisitions are large but smaller than the original proposals

A World Bank study in 2011 found evidence of large-scale farmland deals, in various stages of development, amounting to 56.6 Mha—roughly the size of Kenya—just between October 1, 2008, and August 31, 2009.

More than two-thirds of these deals were located in Africa.³⁸ A 2013 study based primarily on analysis by GRAIN, a nonprofit organization, reported between 33 Mha and 82 Mha of large-scale land acquisitions between 2002 and 2013 conducted by foreign entities only. The wide range in the estimates of area of acquisitions reflects the level of deal completion, and roughly one-third of the verified deals were in Africa.³⁹

<table><caption>Table 35-1 | Concluded and intended transnational agricultural deals, 2000–2016</caption><thead><tr><th>REGION</th><th>FOOD CROPS (MHA)</th><th>NONFOOD CROPS (MHA)</th><th>MULTIPLE USE CROPS (MHA)<sup>a</sup></th><th>TOTAL (MHA)</th><th>TOTAL (PERCENT OF WORLD)</th></tr></thead><tbody><tr><td>Africa</td><td>1.5 / 4.0</td><td>7.7 / 0.9</td><td>8.2 / 5.7</td><td>17.3 / 10.6</td><td>47 / 70</td></tr><tr><td>Asia</td><td>0.2 / 1.8</td><td>1.8 / 0.6</td><td>3.5 / 1.9</td><td>5.5 / 4.3</td><td>15 / 28</td></tr><tr><td>Latin America & Caribbean</td><td>1.1 / 0.0</td><td>1.2 / 0.0</td><td>3.0 / 0.2</td><td>5.3 / 0.2</td><td>15 / 1</td></tr><tr><td>Europe (Eastern & Northern)</td><td>0.4 / 0.0</td><td>1.0 / 0.0</td><td>4.6 / 0.1</td><td>6.0 / 0.1</td><td>17 / 0</td></tr><tr><td>Oceania</td><td>0.1 / 0.0</td><td>0.2 / 0.0</td><td>2.1 / 0.0</td><td>2.3 / 0.0</td><td>6 / 0</td></tr><tr><td><strong>Subtotal (all regions with information)</strong></td><td><strong>3.3 / 5.8</strong></td><td><strong>11.8 / 1.6</strong></td><td><strong>21.5 / 7.8</strong></td><td><strong>36.5 / 15.2</strong></td><td><strong>100 / 100</strong></td></tr><tr><td>No information</td><td></td><td></td><td></td><td>7.4 / 3.1</td><td></td></tr><tr><td><strong>Total (all transnational agriculture deals)</strong></td><td></td><td></td><td></td><td><strong>44.0 / 18.3</strong></td><td></td></tr></tbody></table>

Notes: Concluded deals are shown in red, intended deals in black. Numbers may not sum correctly due to rounding. a. "Multiple use crops" includes crops designated as "flex-crops" or "multiple use" in the Land Matrix database.

Source: Land Matrix n.d. Data shown as of 2016.
More recent updates show that many of these large proposed or announced deals have been scuttled and new dealmaking has slowed since 2012, but the total area of completed deals remains large. GRAIN's 2016 update of international land deals identifies 491 large agricultural land deals completed since 2006, extending over 30 Mha in 78 countries.⁴⁰ Similar results can be drawn from Land Matrix data, an ongoing collaborative project of two major research institutions and two international aid agencies.⁴¹ By mid-2016, Land Matrix estimated that international investors completed deals to acquire or lease for the long-term 44 Mha of land between 2000 and 2016. As of 2016, these investors were at some stage of agreement to acquire another 18 Mha (Table 35-1).⁴²

Land Matrix and other researchers have had to rely heavily on reports from others, and the area estimates are a combination of intended size, contract size, and final operations size. Some more detailed analysis suggests that these data may overstate what has actually occurred to date, at least in Africa.⁴³ For example, one research team put together a list of deals reported by Land Matrix and others and then conducted field research to try to verify those deals and assess their experience.⁴⁴ Of 6 Mha of potential Chinese deals reported by others from 1987 to 2014, the team ultimately found only 240,000 ha that were actually acquired.⁴⁵ Discrepancies emerged regarding financial sizes of transactions, too. A Chinese deal for rice fields in Nigeria reported as involving 2 billion U.S. dollars turned out to involve 2 billion Nigerian naira, equivalent to only about $17 million.

Although it is possible that the total area of land acquisitions has been overestimated, the reality remains that very large land acquisitions have been occurring, generally in the form of long-term leases. One more detailed study found that 2.4 Mha of land had been allocated to foreign acquisitions through some kind of legal agreement between 2004 and 2014 in Ethiopia, Ghana, and Tanzania alone, of which 1.4 Mha had resulted in actual leases.⁴⁶ Although some land had not been leased, the authors found that for those transactions they could track, the leases mostly reflected the original memoranda of agreement, and that additional leases might continue to occur where lands subject

to the agreement had not yet been leased. In 2012, a government-commissioned report of the Lao People's Democratic Republic (Lao PDR) estimates that roughly 2,642 land deals totaling 1.1 Mha had been granted as foreign land-based investments, comprising roughly 5 percent of the national territory.⁴⁷

The main reason many proposed deals fall through appears to be the difficulty of actually implementing them. Many of the original announcements were for much larger deals, and while public opposition has scuttled some—such as the large Daewoo proposal in Madagascar—many others collapse not because of governmental concerns but because they did not prove cost-effective, or because the investor ultimately lacked the capital required.⁴⁸ Because countries continue to try to enter into large land acquisitions, even if many are unsuccessful, the relative merits of these schemes remain an important area of policy inquiry.

## Large-scale land acquisitions are made by a wide range of international purchasers and locally connected wealthy buyers

Although much press attention has focused on acquisitions by quasi-state entities, including sovereign wealth funds, private companies and investors also appear to be major players.⁴⁹ The latter include both domestic and international actors, though their roles vary by country. For example, a 2014 study found that companies from the United States and Europe have played the lead role in Ghana and Tanzania, while companies from India have played the lead role in Ethiopia.⁵⁰ In-country investors are playing a major role, too.⁵¹ For example, national individuals and companies are acquiring land or associating themselves with major international land deals in Africa.⁵² The Land Matrix database has inventoried about 602 large-scale domestic transactions covering 17.3 Mha⁵³—but such domestic deals are greatly undercounted because information on domestic contracts is difficult to track. These land acquisitions spanned low- and middle-income countries (for which data were compiled) on all continents. While it is difficult to determine the exact location of completed deals, about half of them were likely in Africa.
## National and local governments are playing a facilitating role, and international institutions may be playing an indirect supportive role

Even when investors are private, “the active role of governments in consumer and host countries . . . has also been instrumental in facilitating large-scale land acquisitions by providing financial, technical, and administrative support to investors; providing regulatory frameworks conducive to investment; and, in the case of host-country governments, assisting in land acquisition.”⁵⁴ In Indonesia, oil palm development has occurred on lands originally zoned as part of the national forest estate, which are in effect reclassified by the national government on application, and all plantations require a series of permits from the regional land-use authorities.⁵⁵

In Africa, land is typically state-owned, even if ownership includes some recognition of “customary rights,” and large-scale acquisitions nearly always involve a government player. Many governments have adopted policies to encourage these acquisitions. Under Tanzania’s Kilimo Kwanza (Agriculture First) policy, the government aims to increase land available for large-scale land acquisitions to 20 percent of present village lands.⁵⁶ Ethiopia’s Growth and Transformation plan also calls for devoting millions of hectares to large-scale commercial agriculture, and the national government has played an active role in directly contracting with foreign investors in the Gambella region.⁵⁷

By contrast with this supportive role, in a separate report, WRI reviewed government processes for recognizing rights to community lands in 15 countries and found them to be lengthy, filled with obstacles, and leading almost always to only a partial grant of rights at best.⁵⁸ For example, “In Chile, indigenous communities are not eligible for the procedure unless they possess a specified historic document. And in Uganda, communities must incorporate themselves into an association, elect officers, and write a constitution.” The study found that procedures were unclear and that any disputes about lands or boundaries could easily halt the process. In all but one example, governments imposed “arbitrary caps” on the areas transferred, and, governments “retain the right to allocate overlapping concessions to high-value natural resources such as timber, and communities only had rights to exercise full free, prior, and informed consent

to these transactions in 2 out of the 19 surveyed procedures.” Although the study recognized that estimates are rough, it estimated that half of all land globally is community land but that only 10 percent is recognized as belonging to communities and 8 percent is designated for community use.

International institutions have played little role in directly supporting these large land acquisitions, but they may be doing so indirectly and sometimes unintentionally. For example, international institutions have been supporting specific agricultural improvement corridors in Tanzania and Mozambique. Even if their goals are to support small-scale farmers, large-scale acquisitions have also been occurring along these corridors.⁵⁹

## Although acquisitions are occurring on many continents, they mainly affect rural populations in Africa and Southeast Asia

Large-scale land acquisitions are occurring across the world. For example, of proposed international agricultural deals as of mid-2016, Land Matrix shows almost 50 percent in Africa, 17 percent in Eastern and Northern Europe, 15 percent in Asia, 15 percent in Latin America and the Caribbean, and 6 percent in Oceania (Table 35-1).⁶⁰ Yet these acquisitions appear to have quite different characteristics. For example, many of the well-publicized purchases in Australia have been of large preexisting ranches.⁶¹ In the former Soviet Union, acquisitions have occurred at a large scale but appear primarily to have been takeovers of large areas of farmland abandoned after the collapse of the Soviet Union in areas with low populations. By contrast, acquisitions of land in Indonesia and Cambodia to produce palm oil or rubber, and acquisitions in Africa for agricultural uses, often occur in areas with substantial customary use by rural populations.⁶²

## Acquisitions have responded to effects of increased food demand, increased biofuel demand, farm price changes, and expectations for exports

Large-scale acquisitions accelerated after 2005 when crop prices started to rise; in 2008 and 2011, prices reached levels four times higher than they had been in 2005. As crop prices stopped rising, acquisition activity appears to have slowed as well.⁶³ Even though land acquisitions have occurred on extremely favorable terms—and sometimes with
<figure><img src="image_203.png" /></figure>

no purchase price at all—these projects still require substantial investment and risk. Expectations of future high crop prices therefore play a major role. Although investments are sometimes blamed on “speculation,” this term adds little to understanding the land-acquisition phenomenon. All land acquisitions are speculative in that they bet on future economic returns.

Although some entities have defended land leases as ways of boosting local food supplies, the evidence overall suggests that acquisitions which have gone through are focused on exports of nonfood crops, such as rubber or cotton, or of cash food crops, such as palm oil.⁶⁴ Even those few projects focused on staple food crops appear to be focused on exports.⁶⁵

Much of the land rush in 2006–10, especially in Africa, focused on the production of sugarcane or jatropha intended to supply the European biofuels market.⁶⁶ Technical problems with growing jatropha reduced the prospects of those projects, and substantial political doubt about the future of European biofuel policies also appears to have reduced acquisition interest. However, as Table 35-1 indicates, at least 44 percent of foreign African acquisitions tracked by Land Matrix involved nonfood crops as of 2016, and the vast majority of the rest could serve multiple purposes.

In much of the world, acquisitions involve natural and seminatural landscapes that are valuable for biodiversity and ecosystem services

The primary focus of research into “land grabs” has been the social effects on rural populations, but effects on natural habitats are also significant. Most large land acquisitions do not appear to be occurring on farmland that is being intensively cropped by small-scale farmers. Although information on this point is mostly piecemeal, it appears that, in countries dominated by small-scale farming, land acquisitions target more natural habitats—including forests, savannas, and wetlands—and long-term fallow land. These are the types of land that are mostly managed on a community basis. The large acquisitions of existing farmland occur primarily in locations where farms are already large, as in the former Soviet Union.

In the Lao PDR, for example, a government-commissioned report found that 37 percent of large-scale land acquisitions involved forest land, and that 45 percent involved what the report categorizes as “unstocked forest and ray,” which are areas of bush and forests created by shifting cultivation practices.⁶⁷ Three-quarters of the acquired forest land also fell under legal categories intended for protection.⁶⁸ In Paraguay, large land acquisitions
are associated with the clearing of the biologically diverse Chaco forest.⁶⁹ In the Yala Swamp of Kenya, where the Yala River drains into Africa's largest lake, foreign investment led to large-scale clearing and drainage of a swamp rich with hippos, crocodiles, and leopards, and where local people used to fish, hunt game, harvest papyrus, grow vegetables, and graze cattle.⁷⁰ The Tana Delta, another wildlife-rich area of wetlands near the Kenyan coast similarly used by local people, is the subject of a large-scale, although highly contested, plan to grow sugarcane for ethanol.⁷¹ In the Gambella region of Ethiopia, farming operations instigated by both Saudi and Indian investors have converted thousands of hectares of wetlands, used by local people to gather honey, hunt, and fish. Biofuel plantations in Zambia were established mainly on native Miombo woodland.⁷² In Ghana, scholars found that biofuel developments were converting “large areas of secondary forest and rehabilitating fallow lands.”⁷³

Not all of these lands are pristine.⁷⁴ Much of the Miombo woodland in Zambia is land that has been cropped and has regrown woodland over time. One study concluded “that for every 1,000 ha of jatropha grown on smallholders’ fields in the study site, an estimated 310 ha of mature forest and 196 ha of fallow land were cleared.”⁷⁵ Similarly, in Indonesia, oil palm plantations were displacing not only primary forests but secondary forests, and often mixed landscapes of fallow, shrubs and grass, and cropland used by smallholders for rubber, pineapple, and maize.⁷⁶ Even in these disturbed landscapes, one can reasonably infer that lands cleared previously stored substantial quantities of carbon—or were rebuilding carbon—and provided other ecosystem services.

## Analysis has shown that social and equity effects of land acquisitions differ among regions

Large acquisitions of preexisting large farms have occurred in the former Soviet Union and Australia. Although there has been some controversy about these acquisitions—including concerns about corruption and foreign ownership,⁷⁷ respectively—little scholarship has focused on local social consequences. The farms were generally large, supporting few farmers, and in the former Soviet Union many had fallen into disuse. There was little reason to believe that these acquisitions would displace farmers; rather, they had a large potential to boost overall production and the farm economy.

In contrast, both scholarship and press reports of impacts in Africa tend to find displacement, inequity, broken promises, and strong hints of corruption or self-dealing.⁷⁸ A summary of biofuel developments in Ghana by the Centre de recherche forestière internationale (Center for International Forestry Research, CIFOR) is illustrative of the conclusions:

> Large contiguous areas of suitable land were easily obtained by foreign companies through direct negotiations with Traditional Authorities, often through opaque, nonparticipatory and partially documented negotiations purportedly locking up large tracts of land for periods of up to 50 years. In this context, many affected households were forced to relinquish their land without any form of compensation or guarantees of future returns. Many land-losing households consequently experienced a marked decline in livelihood quality as a result of reduced incomes, increased food insecurity, and loss of access to vital forest products.⁷⁹

In what may be the most socially advantageous case of biofuel investments identified by CIFOR, researchers found that a Tanzanian project followed “negotiations [which] were considered acceptable by affected communities” and produced “a number of early benefits,” including “waged employment, full-time employees receiving considerably more than the minimum wage, water supply points, support for funeral costs.” By 2009, however, an economic downturn had left wages “unpaid for long
periods and promises to improve the school and hospital left unfulfilled.” The authors concluded, “With approximately half of household landholdings converted in the process, this case represents an unacceptably high risk for communities.”⁸⁰

There are also clearly examples in which direct employees of new plantations reported improved or more consistent incomes, as one group of employees reported in Ghana.⁸¹ However, even in that situation, CIFOR found greater returns both to land and labor from alternative, local uses, and concluded that “employment [on plantations] would compare far less favorably if the value of other displaced crops and forest products were considered.”⁸²

In Indonesia and Malaysia, researchers have found at least somewhat more mixed results:

Some communities did enjoy economic and social benefits from oil palm plantations such as more stable and reliable income, road access, [and] better healthcare services. In Kubu Raya, some communities benefited both from employment opportunities and from sales of smallholder oil palm harvests. In Kubu Raya and Boven Digoel sites, some indigenous communities and migrants developed good inter-ethnic relations, although this was not the case in Manokwari. Other communities experienced increasing restrictions on traditional land-use rights and outright land losses. . . . Conflicts over land between indigenous communities and oil palm companies were observed in all three sites.⁸³

Similarly, in a series of case studies about oil palm in Thailand, Indonesia, the Philippines, and Malaysia, researchers at the Stockholm Environmental Institute found the consequences for local communities “were mixed, and that the espoused benefits for communities were not materializing as hoped.”⁸⁴ It also found that “delivery of benefits at the local level was often highly skewed, with already marginalized groups being further disadvantaged, thus increasing inequity, societal fragmentation and social tensions.”⁸⁵ Many communities have also found that oil palm developments led to serious problems with local water pollution and flooding.⁸⁶

Indonesian law illustrates why transactions are likely to be unfair despite the fact that those seeking to build oil palm plantations must generally agree to a deal with local communities. To build a plantation, owners must first obtain permits, often first from the national government, to release land from status as national forest, and later from regional land authorities. These permits in effect give companies at least a temporary monopoly to buy rights to agricultural development. Only after obtaining a series of permits do companies negotiate with local communities, which therefore are not able to seek the best deal available from a choice of companies but must either agree or not agree to oil palm development with a single potential purchaser. Not surprisingly, although land for oil palm probably has a value of $4,000–$10,000 per hectare,⁸⁷ compensation for local communities rarely if ever approaches this level.⁸⁸

By contrast, Tanzanian law applies a number of restrictions to acquisitions that would appear to mandate far more local potential for the interests of existing land users. But CIFOR found that

the checks and balances in the law worked contrary to their intended purpose due to several factors. Both central and district governments are faced with strong incentives not only to generate revenues, but also to create conditions for enhanced economic growth and poverty reduction. Investment in the agricultural sector, which employs the majority of rural Tanzanians, is viewed as a promising pathway towards achieving these goals. Three factors exemplify the bias towards investors: land leases in excess of legal limits for the biofuel sector; the approval of flawed environmental assessments; and, ultimately, the overstatement of benefits of investments by politicians (including the President), which bolsters support from government officials and extinguishes critical debate on costs and benefits among villagers and local representatives.⁸⁹
## Recommended Policies for Land Acquisitions

Despite generally negative social and environmental assessments of the surge in large-scale land acquisitions, many critics have focused on procedural reforms.⁹⁰ One recommended reform is stronger recognition of customary rights, which we discuss below. These suggested procedural reforms for approving large-scale acquisitions typically highlight the following elements:

- Substantial consultations with affected communities

- Assurance of “informed consent” or true approval by a majority of local land users before deals go through

- More detailed contracts that specify the obligations of the investors

- Measures and procedures to oversee and assure enforcement of investor commitments

- Assurance of compensation for a wider array of customary uses and rights that recognize the real economic returns different people are now obtaining from them

We endorse these reforms. We also note that informed consent does not mean that every single user must consent. Assembling large-scale operations could involve high transaction costs even where benefits to all could be large, particularly if single holdouts can block the deal and demand a premium before others can benefit. This consideration explains why developed countries typically have procedures for government to seize land for eminent domain, but that ensure proper compensation. Informed consent instead requires rules that allow democratic decision-making by the community, with fair and transparent rules of thumb for compensation for the many different preexisting uses. Unfortunately, the evidence as marshaled by the reports we cite in this chapter is strong that these procedures are not widely or strictly followed.

Although these procedural reforms are worthy, the more fundamental questions are where, when, and under what conditions large land acquisitions should be encouraged or allowed because they benefit a country and its people and contribute to a sustainable food future.

When acquisitions involve large preexisting farms already converted to cropland, those acquisitions are less likely to displace and harm workers and natural habitats, and more likely to lead to valuable improvements in agricultural production. Some acquisitions in the former Soviet Union, Brazil, and Australia are more likely to fit these criteria, but, if benefits are to be realized, land purchasers must have the investment capital they claim to have and procedures must be in place to avoid corruption and political favoritism. In many land purchases, these conditions have not been met.

In general, other types of acquisitions rarely pass our criteria for a sustainable food future, such as ecosystem protection or climate change mitigation.⁹¹ Large-scale land acquisitions tend to occur in forests, wetlands, or other natural or seminatural habitats. Although some governments and private companies have claimed they are merely acquiring “underutilized land” or “abandoned agricultural land,” the evidence suggests that these lands typically hold more carbon and are more environmentally valuable than claimed, and that the labeling of land as “underutilized” or “abandoned” is an unjustified disparagement of secondary forests and savannas. Even when some of these areas are “degraded” from their purely natural state, they are typically being used by the poor and marginalized groups that rely on wetlands, grasslands, and trees (which in some locations may be common-pool resources) to diversify their livelihoods and increase their resilience to droughts and other shocks.

To truly support a sustainable food future, such acquisitions would have to meet one of two additional criteria: they occur on lands with relatively low environmental opportunity costs, including land for which the carbon costs per likely ton of crop are significantly lower than the global average; and they occur in countries where crop expansion is inevitable and are based on land-use plans consistent with the country's climate change mitigation obligations.
## Cooperative, Contract, and Magnet Farming

What tools and contracting procedures can policymakers provide to help millions of smallholder farmers cope with the disadvantages presented by their size? What is necessary to help these farmers gain access to credit, buy inputs at low costs, acquire necessary technical understanding, and market their products at advantageous prices? Traditional tools involve three kinds of contractual mechanisms:

- Farmer cooperatives, through which farmers collectively own and run distribution facilities and input suppliers

- Contract farming, in which farmers agree to produce specific crops for future delivery at a set price and often receive assistance to do so

- Magnet farms, which typically involve contract farming around a central, large farm

Although these three mechanisms differ in detail, each involves an operational entity that works with smallholder farmers to increase access to inputs, expertise, and credit, and/or to process and distribute the final product.⁹²

As countries' economies develop, and markets become increasingly long-distance and anonymous, these mechanisms are likely to become more important. Farmers working in these systems enjoy the benefits of branding,⁹³ gain expertise, spread risk, share costs of inputs and machinery, and access more remunerative and specialized markets.

Yet cooperatives, contract farming, and outsource farming by magnet farms also have costs. In the case of contract and outsource farming, larger farming enterprises may develop local monopoly power over purchases, and farmers can become particularly vulnerable to them once they have invested in the production systems needed to grow specialized crops.⁹⁴ In the case of cooperatives, there are administrative costs and risks that cooperatives will be managed unfairly. There is also the risk that a single cooperative may not prove to be as efficient at supplying farm inputs or marketing crops and livestock products as a competitive, private market of multiple businesses.

Contract farming is also vulnerable to cheating, either by the contractor or by the farmer. The core of contract farming is an agreement for farmers to provide and companies to purchase a quantity of a commodity at a predetermined price (or price range), at a specified time. For certain kinds of agricultural products, such as a highly processed tree crop, the contract may need to apply over several years to justify the upfront costs for either farmers or purchasers. By the time of the promised sale, changes in growing conditions worldwide or consumer preferences may have led to dramatically higher or lower crop prices, providing strong incentives either for a farmer to try to sell to someone else at a higher price or a company to try to avoid purchasing—perhaps by falsely claiming quality limitations—if market prices are lower. Overall, policing contracts is costly, and some products are harder to police than others.

The benefits of contract farming are hard to prove conclusively because there are many reasons why farmers who already have other advantages—whether these be better lands, better locations, or better training—are also more likely to be contract farmers.⁹⁵ There is evidence—gleaned from subtle statistical analysis—that studies of contract farming are subject to a publication bias in which studies that show benefits are more likely to be published.⁹⁶ Even so, and while the evidence can be conflicting, meta-analyses of studies generally find that contract farmers in developing countries tend to make more money than noncontract farmers and that contract farms tend to have higher productivity.⁹⁷

The combined weight of the evidence and many studies indicate that contract farming should be able to provide valuable benefits, but there are several important caveats.

First, because of the mix of benefits and costs, these systems tend to evolve primarily for foods of higher market value.⁹⁸ For example, companies may pay a premium for vegetables or other high-value crops (e.g., cocoa, vanilla) of the right quality, or milk or poultry that meets the right sanitary standards and is reliably delivered year-round. If the quality cannot be assured through relatively quick and easy inspection, as with sanitary standards, for example, contract farming can provide a solution. Companies may also have special technical advantages—such as particular vegetable varieties, breeds of chicken,
or feed formulations—which they can exploit only by maintaining some production control, particularly if goods are hard to store. Cooperatives may also evolve in similar circumstances, for example, to market milk because of the need for an assured buyer shortly after milk is produced. There are examples of contract farming for staple crops, such as rice, that seem to have economic benefits, but contract farming is less common for such crops, and there are also findings that efforts by aid agencies to promote contract farming for staple crops can make the costs of farming too high.⁹⁹

Second, studies consistently find variability in results from different contract farming arrangements even where they tend to find benefits on average. The details therefore matter.

Third, the challenges of meeting the demands of contractors tend to favor somewhat larger farms (at least, the larger of small farms), and relatively few farmers tend to benefit from these arrangements. Today, fewer than 5 percent of smallholder farmers typically participate in some form of contract farming.¹⁰⁰

## Recommendations for Contract Farms

In general, the literature implies that governments can support smallholder productivity and livelihoods by supporting strategies that allow farmers to take advantage of these different contractual arrangements. We offer a few suggestions for policies to increase the benefits and reduce the costs.

### Focus more development efforts on high-value crops

Agricultural development assistance to smaller farmers should be directed more toward high-value crops that carry a premium for quality because the benefits of collective action are more likely to apply to such crops. Many of these kinds of crops also tend to improve with heavier investments of labor. In general, our modeling analysis also projects larger growth in demand for these crops than for staple crops. Even farmers engaged in subsistence agriculture can raise cash crops to boost income, diversify production, and increase assets that may also be used to build staple crop production.

### Provide basic social security

Because hunger is such a core risk, subsistence farmers are highly risk-averse and will often produce staples even if production of an alternative crop would on average provide more income and thus greater food security. For the same reason, farmers will typically avoid specializing in the most promising agricultural option unless the expected rate of return is extremely high relative to the increased risk. Government programs that provide an alternative form of income or food guarantee could therefore help farmers take more risks and make more profitable investments, such as growing crops likely to earn a higher return. Brazil's *Bolsa Família* program and Mexico's *Oportunidades* program, for example, provide small guaranteed incomes to the poor if they send their children to school, and both have had considerable success in alleviating hunger and poverty.¹⁰¹ Research on the agricultural effects of these types of social security programs is limited, but it suggests that they allow farmers to focus more of their production on higher-value crops.¹⁰² Both Brazil and Mexico are middle-income countries, and many countries in Africa probably cannot afford such extensive programs, but moving in this direction as soon as possible may also be a way to stimulate agricultural growth.

### Ensure fair contracts and try to enforce them

A first step is to help ensure fair contracts up front, and small farmers would benefit from legal and marketing advice. The risk of cheating by either party poses a major barrier to mutually beneficial contract farming so efforts to make cheating harder are important. Such efforts can take advantage of improved remote and ground sensors and spatial tools to confirm production, which would increase the confidence level of companies. They should also enable faster and fairer arbitration and enforcement procedures, increasing farmers' confidence. Civil society organizations might provide these services. Governments should consider laws to facilitate such arrangements, including basic codes of conduct to help protect against abuses.
Build on sustainability commitments

Many major private food companies have committed to reducing deforestation and GHG emissions and improving the income of farmers in their supply chains. Deeper involvement with farmers through contract farming provides one opportunity for embedding these commitments further up supply chains and building longer-term relationships between companies and their producers.

## Land Rights for Sustainable Intensification

Large-scale land acquisitions can occur in much of the world because traditional users of land generally lack full and protected property rights. In some parts of the world, neither smallholder farmers' rights nor common rights to community land are officially recorded in written form. In addition to increasing vulnerability to seizure of land by others, this lack of clear, full title—according to standard economic theory—undermines both the ability of farmers to borrow money and their desire to invest in long-term improvements because farmers may not be able to reap future benefits of their investments. Weak property rights therefore encourage short-term exploitation of land rather than longer-term stewardship. The resulting sustainability concerns have led international institutions and nongovernmental organizations to advocate secure land rights.

## Property rights

Determining the best and most appropriate kinds of rights regime has proved challenging. The standard treatment of land rights in Western countries recognizes something similar to total rights of dominion over a parcel of land, subject to regulation but including the right to buy and sell and typically to exclude all, or nearly all, other uses. These rights are typically recognized in written documents recorded in government registries. International institutions have sought to mimic these types of property rights in countries without such systems, and many governments have made efforts in this direction.

These efforts have had some success but also many problematic results. From an equity standpoint, efforts to recognize rights in this way have sometimes led to failures to recognize a range of

traditional rights on common lands, ranging from hunting, wood gathering, and grazing to gleaning. By definition, if a piece of land has long been subject to overlapping rights but the new property rights system is oriented toward recognizing single ownership, then some people who have previously used the land will lose their rights (with or without compensation).

The process of recognizing rights has also provided an opportunity for political favoritism and unfairness. As the World Bank wrote in 2008, “Land policies were often adopted less to increase efficiency than to further interests of dominant groups.”¹⁰³ In many contexts, granting recognition of individual property rights to people without experience of private land ownership and without establishing communal regulation has allowed elites to buy up rights and assemble vast complexes of land.¹⁰⁴

The effect of individual property rights on agricultural productivity is complex. In theory, title should give farmers greater incentive to improve farms and greater means to borrow funds to do so. The

<figure><img src="image_204.png" /></figure>
ability to sell or rent land should make it easier for land to be transferred to more productive farmers. In studies of land reform effects in Latin America, Eastern Europe, and Asia, researchers have found productivity gains to be significant.¹⁰⁵

But in studies of land reforms in Africa, researchers have generally found no particular gain, a result for which they have offered two possible explanations.¹⁰⁶ One is that customary land rights have been sufficiently secure that providing land titles has not provided much additional security—although there is evidence that customary land rights are generally not sufficient to use as collateral to obtain a loan.¹⁰⁷ The other explanation, in effect, is that while secure land rights are very helpful in promoting productivity investments, they are not by themselves sufficient, and the myriad other obstacles facing farmers in Africa have blocked improvement. Among these obstacles are poor soil quality; inadequate transportation, electricity, and financial infrastructure; weak marketing infrastructure and networks; and poverty traps.

As one critic has written about Africa, “In practice, many of the land policy reforms and titling programs of the 1970s and early 1980s failed to achieve the expected increase in agricultural investment and productivity, did not facilitate the use of land as collateral for small farmers, and often encouraged speculation in land by outsiders, thus displacing the very people—the local users of the land—who were supposed to acquire increased security through titling. The programs frequently exacerbated conflicts by ignoring overlapping and multiple rights and uses of land and led to or reinforced patterns of unequal access to land based on gender, age, ethnicity, and class.”¹⁰⁸

## Customary rights

During the past decade, researchers, international agencies, and governments have learned from these lessons and begun to emphasize the recognition of customary rights. These are the complex rights recognized by many communities in much of the world (including Africa) to land uses that may accommodate both overlapping rights to the same piece of property and the process within a community of allocating rights. A number of African countries have taken steps to recognize customary rights, but the strength of measures varies. For

example, Mozambique has recognized customary rights in general but still retains national ownership rights that may supersede the communal rights. As one study concluded, “A greater challenge to customary rights in Africa is not tenure conversion per se, but the fact that customary arrangements lack adequate constitutional and legal recognition in many countries.”¹⁰⁹

Customary rights, however, are not always completely fair. They may recognize the authority of local chiefs in the allocation of land, but decisions by the chief may be inequitable or may fail to prevent unbalanced deals with large investors seeking land. A study by CIFOR found that many of the large and inequitable land deals in Mozambique and Tanzania were the work of local chiefs, who directly received money as an incentive.¹¹⁰

Translating customary tenure rules into formal property rules also can institutionalize the inequality of women. For example, in southwest Ghana, women's ownership of land is customarily discouraged, and women often obtain land only by the license of their husbands.¹¹¹ One study by the World Bank concluded that in sub-Saharan Africa, “the vast majority of women, who are the primary subsistence producers, are locked out of landownership by customary laws.”¹¹² Sometimes customary laws do recognize substantial rights for women, but they are hard to translate into property rights based on Western principles. For example, women in northern and eastern Uganda have many traditional land-use rights, but when sales transactions occur through the legal system, those rights are often lost.¹¹³ Moves to recognize customary rights need, at a minimum, to recognize these rights. More broadly, recognition of customary rights should be seen as an opportunity to change those rights to increase fairness and broaden access to resources in ways that will simultaneously benefit productivity.

The development economics literature generally agrees that “(1) property rights need not always confer full ownership and be individual—they can, and should be, individual, common, or public, depending on the circumstances and (2) most important for sustainable development is that property rights are deemed secure.”¹¹⁴

Beyond the challenge of determining the best system of rights, the sheer process of recording
property rights has often proved to be expensive
because it requires drawing precise property lines
and settling potential disputes. That process has
led some studies to question whether such efforts
are always or even usually worth the cost. Modern
information technology, however, seems capable
of reducing this challenge. For example, Rwanda
completed a national registration program of 10.3
million parcels in less than five years at a cost of
$10 per parcel using aerial photographs and recti-
fied satellite imagery.¹¹⁵ Ethiopia implemented a
similar program. Both countries used this process
to improve women's rights by legally recognizing
women's inheritance rights, elevating secondary
rights so that they are equal to those of men, and
allowing the joint registration of spousal land
rights. Studies have found that Ethiopia's reform
led to improvements in agricultural productivity.¹¹⁶

In addition to influencing equity and productivity, tenure arrangements have implications for forests and agricultural conservation. In some contexts, traditional property systems may discourage agricultural conservation practices. For example, the long-established principle of acquisitive prescription, common in Latin America, allows landowners who clear forests to obtain ownership and thereby encourages deforestation. In Africa, rights to use trees may be divided among those with the right to collect fruit and those with the right to cut the tree for timber, which in some cases may be the government.¹¹⁷ This split in rights can reduce incentives for farmers to plant and care for trees. In many parts of Africa, members of the community may have the right to graze cattle on residues after the harvest, reducing incentives to return the carbon in residues to the soil.

Better recognition of the rights of indigenous users
can help protect forests, however. Researchers have
found that indigenous reserves in Brazil have been
far more effective at preserving forests than other
land ownership arrangements—although this may
result in part from restrictions on deforestation
built into the establishment of those reserves.¹¹⁸
Overall, in Brazil, Bolivia, and Colombia, defor-
estation rates inside indigenous forest lands with
secure tenure have been one-half to one-third those
outside indigenous lands.¹¹⁹ But many local people
will also be attracted to the potential revenue from
agricultural conversion, as long as the price is fair
and other measures to boost their incomes are lack-

ing. Recognizing land rights may help but will not
always be an adequate measure to protect natural
ecosystems from conversion to agriculture.

Recommendations for Land Rights

Despite the complexity of tenure issues, we offer a
few general recommendations based on literature
and our own conclusions:

- Governments should recognize and secure the rights of those who have used land (and water) under both formal and customary arrangements to protect against large-scale seizures by governments themselves and to provide sufficient security for farmers to obtain credit.

- Governments should use modern information technology to expedite the identification and recording of land boundaries and issuance of associated documentation. They can move the process along quickly by segregating parcels that are subjects of dispute (for subsequent resolution) from those that are not.

- Governments should eliminate rules that allow individuals to secure property by clearing forests and other natural landscapes.

- Where land ownership in the form of individual plots has a strong tradition, as in much of Asia and long-settled parts of Latin America, moving toward property rights systems similar to those of Western countries can work.

- Processes to formalize customary rights, because of their high potential to disadvantage those who are less powerful or whose rights are more transient, should specify rules and employ oversight systems to assure fair treatment.

- Where customary rights systems exist that recognize physical overlapping land uses, the systematizing process is also an opportunity to address fundamental unfairness, as in the treatment of women's rights, and to develop alternatives to traditional rules that impede productivity gains.
<figure><img src="image_205.png" /></figure>
# CARBON-PRICING STRATEGIES AND FINANCING OF CLIMATE-SMART AGRICULTURE

Voluntary actions alone will likely not achieve climate goals. Economists generally favor pricing strategies that attempt to internalize climate costs, such as carbon taxes and cap-and-trade systems. Some policies would use carbon "offsets" to fund agricultural mitigation. We find that broad pricing strategies are likely impractical but that opportunities exist to apply them selectively as part of flexible regulations. Finding a limited role for offsets, we discuss reforming agricultural subsidies and increasing access to climate finance.
Carbon-Pricing Strategies

No one knows the precise changes in manage-
ment or land uses that each farm should undertake
to most cost-effectively boost production while
reducing GHG emissions immediately today, let
alone over time. In the same way, no one knows
the precise mix of technologies most cost-effective
for reducing emissions from factories and power
plants. For these reasons, economists and most
environmental organizations favor policies that
target outcomes—by imposing costs or caps on
emissions or possibly rewarding sequestration—
rather than laws that mandate particular technolo-
gies or practices. Outcome-oriented approaches
offer more certainty about the level of emissions
that will ultimately be achieved and should be more
cost-efficient because farmers and other emitters
are given the flexibility to choose the most cost-
effective ways of reducing emissions at any given
time. But are such approaches politically or practi-
cally feasible for agriculture?

Carbon taxes and cap-and-trade systems

Governments can impose costs flexibly on emitters by imposing a tax on each ton of emissions, typically called a “carbon tax.” They can also create a “cap-and-trade” system. In a cap-and-trade system, the government imposes a cap, or limit, on the total amount of allowable carbon dioxide equivalent emissions and allocates emissions “allowances,” representing shares of the cap, to emissions sources that have been designated as entities under the cap. Cap-and-trade systems can allocate allowances at different parts of the supply chain, and participating entities can trade emissions with each other as long as total emissions from all entities remain under the cap. If applied in agriculture, for example, farms (or whatever entity is allocated allowances) that emitted more than their allowance would have to purchase more allowances from others, while farms that reduced their emissions below their allowance could sell credits for extra emissions reductions to others.¹²⁰

Carbon taxes and cap-and-trade systems can create incentives that work their way through agricultural and food supply chains. For example, science and technology companies that develop more efficient fertilizers or feed additives to reduce ruminant

methane would find a market for these innovations
because farmers would pay for inputs that help
them avoid taxes or the need to purchase allow-
ances. Consumers would also have incentives to
switch to lower-carbon foods, because the costs
of high-carbon foods, such as beef, would rise to
reflect their carbon costs. In such systems, markets
can identify the most cost-effective sources of emis-
sions reductions on their own.

These mechanisms can be implemented without imposing additional net costs on farmers or food consumers. For example, governments could refund farmers using taxes raised downstream from the food sector or by using funds from selling allowances. Such systems would work if those who reduced emissions ultimately received more of the economic benefits than those who did not, and if those advantages were proportionate to the reductions. Governments could also design either a tax or a cap-and-trade system to protect the interests of small farmers, including those who today generate high emissions relative to their production. The key need is to structure such a system to focus on improvements from a baseline, for example, by allocating carbon allowances to farmers who match their existing emissions levels. As small farms probably have some of the best opportunities to reduce emissions per ton of crop, meat, or milk, such pricing mechanisms could even favor them.

Despite their theoretical advantages, these pricing
approaches face significant technical challenges in
the agriculture and land-use sectors. In the energy
sector, emissions generally track the amount of
carbon in coal, oil, or natural gas. As a result,
emissions are relatively easy to estimate per fuel
type and form, so pricing the carbon in these fuels
is a reliable proxy for emissions. In the agriculture
sector, however, the quantity of emissions resulting
from different farm practices can vary greatly. It is
not practical to measure most agricultural emis-
sions directly (such as the nitrous oxide released
when using fertilizers or ruminant methane). Even
if it were, monitoring millions of farmers globally
would present enormous challenges in practice.
Many mitigation options are relatively subtle—such
as improving the efficiency of feed use for cattle—
and it would be difficult to monitor how emissions
change because of changes in management.
Land use also presents measurement and verification challenges, long acknowledged by the Intergovernmental Panel on Climate Change (IPCC).¹²¹ Many natural factors, such as variations in rainfall and temperature, greatly influence how much carbon a forest or savanna adds or loses. As a result, holding landowners directly accountable for increases in land-use related carbon emissions that they cannot control may be unfair. Imposing penalties on owners for losing forests, for example, would raise questions about what to do and how to know when forest clearing results from natural fires or fires set by others. Monitoring carbon through remote sensing is not yet practical at the individual landowner level.¹²²

Introducing carbon taxes or cap-and-trade systems likely faces even more significant political challenges than applying such approaches to other sectors of the economy. Neither agriculture nor forestry is part of Europe's emissions trading system, which applies only to large manufacturing sites and power plants. When the U.S. House of Representatives passed a bill to create an emissions trading system in 2009 (that ultimately was not introduced in the Senate and did not become law), the bill did not impose obligations to reduce emissions from agriculture or land use. In 2008, New Zealand established an emissions trading system¹²³ that was originally intended to apply both to agriculture and conversion of forests into agricultural use, beginning in 2015.¹²⁴ But the government suspended the law's application to agricultural production as the start date approached and replaced it with reporting obligations only—although the government did retain limitations on conversion of forests.

## More selective pricing strategies

Given the technical and political challenges of these carbon-pricing strategies, agriculture may not be subjected to the same carbon-pricing mechanisms used in the energy and manufacturing sectors. However, the advantages in efficiency and flexibility afforded by pricing strategies should motivate governments to explore alternative, more limited variations. For example, although New Zealand's emissions trading system is not focusing on agricultural production emissions, it still requires those

who cut down forests established before 1990 to have offsets for those emissions.¹²⁵ It might also be possible to tax the production of forest products, and to do so differentially based on the type of forest those products come from to influence the location, method, and quantity of wood products that are produced.

Creative pricing approaches could also apply to features of agricultural production that are measurable. For example, governments in countries where farmers have opportunities to apply fertilizer more efficiently could impose a tax on fertilizer that does not incorporate a nitrification inhibitor or time-release mechanism. The tax level would be based on the likely additional releases of emissions expected from use of conventional versus improved fertilizer. Different forms of manure management could also be taxed separately. Whether used to help set the level of a carbon tax or simply to monitor emissions more carefully, scientists need to develop useful proxy indicators to estimate emission levels and how emissions change with various mitigation practices. Taxes on high-emissions foods, discussed in Chapter 6 on shifting diets, represent another option.

In an ideal world, governments should impose taxes that reflect the costs of pollution, but political feasibility will depend in part on confidence in the technical feasibility and cost of mitigation options. Just as enhanced forest protection in Brazil was accompanied by increased confidence in the potential to intensify production on existing agricultural land, some method of taxing beef production that generates high levels of methane emissions becomes more plausible if scientists can demonstrate to farmers that safe, effective, and reasonably priced additives are available to limit methane generation from cow digestion.

Overall, given the complexities of the world's agriculture and land-use system and the scope of the climate challenge, it appears that taxing emissions would be the most efficient and effective approach to reducing them. Governments should explore selective application of this approach wherever practicable.
<figure><img src="image_206.png" /></figure>

## Carbon Offsets

Much of the interest in applying emissions trading systems to agriculture has focused on agriculture as a supplier of offsets to capped sectors. Energy users, for example, would pay farmers to reduce their emissions, creating credits that they could use to offset or cancel out their own emissions at less cost than any actions they could take in their own operations.¹²⁶ Similarly, some nongovernmental organizations and foundations have hoped that offsets could fund agricultural improvements by small farmers in developing countries, particularly through incentivizing measures that add soil carbon and improve soil fertility.¹²⁷

To date, European companies capped under an emissions trading system have been able to pay farmers in developing countries for a limited number of mitigation measures under the Clean Development Mechanism (CDM).¹²⁸ The Canadian province of Alberta also established a system that allowed extensive use of offsets.¹²⁹ Interest in this approach in richer countries has been political as well as technical: trading systems could provide financial reasons for agricultural interests to support climate change efforts and reduce compliance costs for factories and power plants. In Alberta, for example, offsets have generated more reductions than those achieved by factories and power plants reducing their own emissions.

Despite these hopes, there are serious limitations and challenges to the use of offsets. The most obvious is that offset systems by themselves do not generate net greenhouse gas (GHG) emissions reductions from agriculture. The emissions reductions in agriculture are credited to the energy sector, which then reduces its emissions less than it would have done without the purchase of an offset. For years, climate mitigation policies have paid little attention to the need to reduce agricultural emissions. Given delays in taking action on climate change, it is now clear that by 2050, in addition to massive reductions in energy-generated emissions, agricultural emissions must also be significantly reduced to help stabilize the climate. This means that selling agricultural offsets to the energy sector can play at most a transitional role, perhaps stimulating progress in the agricultural sector. Large-scale agricultural mitigation is needed just as it is for other carbon-intensive sectors.

Beyond this need to limit both agricultural and energy sector emissions, other practical challenges limit the use of offsets:

### Additionality

A critical requirement for offsets is “additionality,” which is proof that a mitigation measure would not have occurred anyway but rather results from the payment of the mitigation credit. To establish additionality, the CDM requires an analysis that the measure would not otherwise be economical and
customary. But there is debate as to whether most
CDM projects truly meet the additionality test.¹³⁰
One problem is that the more economical a mitiga-
tion measure—and therefore the more desirable
and likely to be successful—the less likely it is to be
additional. The additionality problem is so chal-
lenging to apply robustly in practice that many
researchers and some policymakers have called for
abolishing offsets altogether, thereby avoiding the
additionality problem, and replacing offsets with an
alternative mechanism that rewards countries for
holding emissions below a projected baseline.¹³¹

Baseline

Related to additionality is the question of what
baseline to use to assess mitigation. Should an off-
set require reductions from recent historical emis-
sions, or recognize that emissions are likely to grow
without additional effort (e.g., to improve livestock
feeding efficiency or nitrogen use efficiency from
fertilizers)? Although such improvements offer the
best short-term options for reducing emissions
while meeting growing food needs, it can seem odd
to award offsets to farms for absolute increases in
emissions (even though they are smaller increases
than would occur under “business as usual” growth)
and to use those activities to justify reduced mitiga-
tion by factories and power plants.

Administration

Developing offset agreements with millions of
farmers is a major administrative challenge, as is
monitoring the results. Solutions probably require
a large “aggregator,” which pays farmers for prac-
tices and then assesses progress over large areas
using indirect means. But monitoring and payment
require some entity to manage the process and
probably assume much of the risk.

Leakage and permanence

When any activities claim mitigation, an impor-
tant question is whether the activity truly reduces
total emissions or just transfers emissions to other
sources. For example, if some farmers plant forests
on some of their land or reduce fertilizer use in
ways that reduce yield, other farms may then clear
more forest to meet demand for food. Efforts to
estimate these effects are challenging and present

large conceptual problems. For example, should
carbon offsets reward producers if an economic
model estimates that the amount of land-use change
elsewhere to replace the food is less because higher
prices cause people to consume less food?<sup>132</sup> Leak-
age is an issue for all emissions mitigation activities,
but the likelihood of leakage is even greater when
mitigation actions are counted at an individual farm
level rather than at the national level. In addition,
when the estimated reductions are sold as an offset
to a purchaser, which can then increase emissions
or avoid reductions itself, the consequences are even
worse. Permanence is also an issue. Forms of mitiga-
tion that involve carbon sequestration might not
store carbon over the long term.

Certainty and discounting

Accurately estimating emissions reductions in the agriculture sector is more challenging than in the energy sector. As a consequence, agriculture-based offsets are sometimes discounted relative to energy-based ones (e.g., of two tons of estimated reduction, only one ton can be traded). Such discounts reduce the financial incentives for agriculture-related offsets.

Small farmers

Participating in offset programs presents particular
challenges for small farmers. Precisely because
they are small, the amount of mitigation potentially
available from any one farm is modest, although
many of the transaction costs will remain. Small
farmers also face timing and flexibility issues. For
example, many offset projects only pay based on
success, or after several years of operation. But
many small farmers lack access to the capital neces-
sary for up-front investments and cannot absorb
the risk of failure. They also reasonably fear the
multiyear commitments required by project design-
ers, as those commitments reduce opportunities
to adjust to changing personal, weather, or market
realities.¹³³

Because of these obstacles—and above all because
the agricultural sector itself must achieve significant
emissions reductions in addition to other sectors—
agriculture-generated GHG emissions offsets have
only a limited and short-term role to play in achiev-
ing a sustainable food future.
<figure><img src="image_207.png" /><figcaption>**Figure 36-1** | Farmers' investments in agriculture are much higher than public investments</figcaption></figure>

Note: Data on country-level sources of investment in agriculture vary among low- and middle-income countries. The number of countries covered by these data varies from 36 for foreign direct investment to 76 for on-farm investment in agricultural capital and government investment. See Appendix 1 in Lowder et al. (2012) for more detail on the country-level data included in this chart. Although the data are not comprehensive, they are sufficient to indicate that private on-farm investment far outweighs any other source of investment.

Source: Lowder et al. (2012), Figure 2.

## Funding Climate-Smart Agriculture

Agriculture is a major sector of the global economy, so is not surprising that estimates of the investment needed to maintain and improve it, as well as to address climate challenges, involve enormous sums of money. The private sector will likely provide the bulk of these funds. The great majority of those private investors will be farmers, who are primarily investing to replace and improve their own farm equipment, animals, farm roads, and irrigation and drainage systems. FAO estimates the total accumulated investment by farmers around the world at more than $5 trillion.¹³⁴ Despite assessing only 76 countries because of limited data, the FAO estimates that private investment per year of nearly $170 billion dwarfs public investments (Figure 36-1).¹³⁵

The dominance of farmers in agricultural investment makes clear that a core role of government is to facilitate and guide their investments by internalizing environmental costs and establishing sound

policies regarding tenure, land acquisitions, and cooperation or contracting. For example, in sub-Saharan Africa, much of the agricultural stagnation between 1980 and 2005 is attributed to an annual decline of roughly 0.6 percent of agriculture's capital stock compared to increases in all other regions of 0.7 percent more.¹³⁶ This decline was probably due to poor government policies, including policies that sought to tax agriculture to pay for industrialization.¹³⁷

Nonetheless, there is still a need for government financial resources to support necessary infrastructure, research, and assistance to small farmers if they are to escape or avoid poverty traps. Classic poverty traps force farmers to sell off necessary assets in times of hardship or to avoid reasonable investments in productivity improvements because of an inability to cope with almost any level of risk. In the case of mitigating GHG emissions, such assistance to farmers is both advisable and fair. So where should these funds come from?
<figure><img src="image_208.png" /><figcaption>Figure 36-2 | The world's leading agricultural producers provided nearly $600 billion in public funding to support farms in 2015</figcaption></figure>

Note: OECD assessment of 51 countries excluding India.

Source: Searchinger et al. (2018b), based on analysis of OECD (2016) data.

## Redirecting subsidies

Government policies today already provide major financial support to agriculture. According to estimates by the Organisation for Economic Co-operation and Development (OECD), the 51 top countries in total agricultural production (excluding countries in South Asia, which the OECD data do not address) provided nearly $600 billion in farm support in 2015 (Figure 36-2).138 This figure was equivalent to roughly 19 percent of total global agricultural production.139 This level of support suggests that it would be difficult to obtain substantially higher levels of support from governments. Yet these funds, as a whole, are doing little to support the kinds of improvements outlined in this report.

Half of this total support takes the form of “market price supports,” which are any kind of market barriers that raise prices to consumers. Examples include import limits, tariffs, or systems that limit production by farmers to increase prices. If these barriers benefit some group of farmers in a country, they do so at the expense not only of consumers but also of farmers in other countries. In fact, because

these supports are more prevalent in higher-income countries, they offer little market protection for the world's poor overall. From a global perspective, reducing or redirecting the costs of these market interventions would reduce prices and benefit consumers.

The other half of farm support, about $300 billion, flows directly from governments, mostly through direct expenditures or tax credits. About $167 billion takes the form of direct payment to farmers for current or past production. This funding will only spur productivity to the extent that farmers decide to use these funds to boost investment rather than income, so it is an inherently diffuse way of boosting productivity. Another $14 billion is for input subsidies, which have modest benefits and often lead to environmentally damaging results (as discussed in the next section, on fertilizer subsidies). Approximately $46 billion supports infrastructure, including irrigation. These funds have probably boosted production in various ways. Finally, $74 billion is spent on research or technical assistance, conservation payments, or health and safety inspection.
This analysis indicates a real opportunity to redirect farm support toward the needs identified in this report. Redirecting market price supports would be most difficult administratively because these market barriers raise costs to consumers—and so are real costs—but generally do not create a pot of money that governments could transfer to other purposes. Both Europe and the United States, however, have experience in reducing these kinds of market barriers in return for increases in direct government subsidies. Subsidies could then be targeted more at the strategies and approaches necessary to close the food, land, and GHG mitigation gaps and achieve a sustainable food future.

Redirecting the $181 billion per year in direct payments to farmers—$167 billion for production and $14 billion for input subsidies—toward the priorities identified in this report provides the easiest administrative opportunity to achieve these objectives.

In recent decades, governments have been steadily reducing the extent to which their subsidies distort trade, in part because of trade negotiations. The most offensive subsidies from the perspective of trade are subsidies that pay farmers more as they produce more of a particular crop, known as “coupled payments.” Researchers have estimated that coupled payments are often environmentally damaging because they encourage overuse of farm chemicals. However, their true impacts on land use and GHG emissions have rarely been estimated and are probably variable and complicated because of their effects on where crops are produced.

In the United States, there has been a major shift from direct price guarantees to “crop insurance.” But crop insurance is highly subsidized and insures not merely against losses from bad weather but also against low prices. In effect, it serves as a revenue guarantee that is tied to the amount a farmer produces, and therefore has more similarities to than differences with traditional price guarantee programs.¹⁴⁰

The United States has also seen modest movement toward imposing some kind of environmental criteria on farming as a condition of payments. Since 1985, farmers have been required to implement plans to reduce soil erosion and avoid draining wetlands, although enforcement has never been

strong.¹⁴¹ There is evidence that these requirements have had some effect although probably a modest one.¹⁴²

Europe has done a little more to shift its agricultural funding toward conservation goals. The bulk of the Common Agricultural Policy's direct payments are now tied to conservation compliance, which involves two types of mandates. The first requires that farmers comply with applicable environmental and food safety laws that are already mandatory, such as an EU-wide directive on nitrogen use. This mandate also requires that farms comply with authorization requirements on irrigation use where they exist. The second mandate requires farmers to comply with Standards of Good Agricultural and Environmental Condition, which are set forth in general language at the European level and which member states are supposed to make more specific. For example, the standards protect against soil erosion, protect soil organic matter, and recommend the protection of important “landscape features” to provide some buffering of streams and hedgerows.

Unfortunately, the requirements are vague at the European level, and often minimally applied by national governments. For example, the United Kingdom protects streams, but it requires maintenance of only a one-meter buffer from the top bank of a stream. Ecologists recommend much larger buffers to effectively filter out pollutants or provide shade. In 15 of the 28 EU countries, the only soil carbon requirement is not to burn crop stubble. Europe also requires that 30 percent of total agricultural funding, or almost 13 billion euros per year, go only to farmers who meet three additional environmental requirements, but these criteria also are very modest.¹⁴³

Probably the most important reform has been to direct roughly one-quarter of total agricultural support to rural development, which includes roughly 19 billion euros per year for conservation.¹⁴⁴ Approximately half was directed toward projects viewed as enhancing ecosystems or climate, and a small number of projects have truly focused on climate mitigation.¹⁴⁵

China has also substantially changed its agricultural policies in the past few years. It has phased out its direct subsidies for fertilizer, which were as high
as $21 billion in 2011.¹⁴⁶ It has also made hundreds of millions of dollars per year available for pilot projects to subsidize more efficient use of fertilizer and for agricultural research focused on environmental objectives.¹⁴⁷ China also devotes roughly $7 billion per year in funding to rehabilitate grasslands and restore forests on poor-quality agricultural land. These funds have done much to reduce soil erosion and have stored some carbon, although the focus on plantation forests, typically of a single species, has meant few gains and possibly even losses in biodiversity.¹⁴⁸ China also boosted agricultural research and development (R&D) spending heavily to roughly $12 billion per year between 2013 and 2016, more than doubling spending from 2006 to 2009. Even so, these funds represent only a modest share of China's total support for agriculture, which averaged $255 billion from 2014 to 2016 and was skewed heavily toward import barriers.

Agricultural subsidies are much lower in Africa and most of Latin America. One reason for Africa's poor agricultural development from 1960 to 2005 was low government investment combined with taxation or export restrictions designed to keep crop prices artificially low.¹⁴⁹ In 2003, the heads of state of most countries in the African Union pledged to increase the share of agriculture in government spending to 10 percent. An analysis by the International Food Policy Research Institute (IFPRI) in 2013 found that eight countries had met the target, and others had increased their spending, but that the overall goal had not yet been met.¹⁵⁰

Overall, redirecting agricultural support provides a major opportunity for financing some of the needs identified in this report. Of course, all reforms of this kind are politically challenging. Even if agriculture would benefit overall, individual farmers who lose direct financial subsidies or market protections are likely to oppose such reforms. One prerequisite for these reforms will be increasing attention paid to farm programs by individuals and public officials who care most about climate change, biodiversity, and global poverty. These parties have an important stake in structuring farm support programs, though the connection is often not sufficiently recognized. Another opportunity may exist, however, by focusing on the linkages between agricultural productivity gains and climate protection. Even if some individuals would benefit by being allowed to clear

more land, most farmers can benefit from programs that increase their productivity. So long as such programs are tied to protection of natural areas, they will contribute to a sustainable food future.

## Reforming and redirecting fertilizer subsidies

The benefits and costs of fertilizer subsidies are particularly important questions for decision-makers allocating government spending because they can account for a large percentage of government support to agriculture. Fertilizer subsidies have been particularly large in Asia and in many parts of Africa, where fertilizer subsidies have consumed much of the government funding devoted to agriculture in recent years.¹⁵¹ What is their proper role in a sustainable food future?

In Asia, the nonpolitical answer seems clear: fertilizer subsidies should be phased out. As Chapter 27 on reducing emissions from fertilizer use showed, farmers in both China and India overuse nitrogenous fertilizer (excess applications have little to no yield effects). Excess applications not only result in farmers spending more money than necessary but also cause high GHG emissions, particularly because much of the fertilizer in China is manufactured using power generated from emissions-intensive coal.¹⁵² Studies have found that fertilizer subsidies contributed to agricultural growth and poverty reduction in the early years of introducing fertilizer but had little impact thereafter.¹⁵³ After the early years, fertilizer subsidies have contributed far less to raising agricultural productivity than other types of funding such as agricultural R&D, roadbuilding, irrigation, and education. Reforms in tenure and agricultural market liberalization have also had large effects.¹⁵⁴

Subsidies encourage overuse of fertilizer. In China, one study estimated that fertilizer subsidies of all kinds—including many provided to manufacturers—reached $18 billion in 2010¹⁵⁵ although, as mentioned in the previous section, China has recently phased out fertilizer subsidies. A wide range of economic research supports the view, predicted by economic theory, that farmers’ application rates of fertilizer reflect the ratio of fertilizer prices to crop prices.¹⁵⁶ If subsidies artificially lower the prices farmers pay for fertilizer, then farmers will use more fertilizer. This principle appears to hold true across countries, at least for cereals.¹⁵⁷
In India, fertilizer subsidies have been especially distorting because they have been applied more heavily to nitrogen than to other nutrients, resulting in an inefficient balance of fertilizer application.¹⁵⁸ Reforms have tried to reduce support for some but not all nitrogen fertilizers, but the initial efforts may have had the opposite effect and led to more imbalanced nutrient application and higher costs.¹⁵⁹ By 2015, subsidy costs had reached $11.6 billion per year, roughly five times higher than 15 years earlier.¹⁶⁰ Although policymakers intend fertilizer subsidies to spur food production and to help small farmers, the evidence is strong that fertilizer subsidies are an economically and environmentally costly way of achieving these goals. There is also widespread evidence in China that average applications of synthetic fertilizers per hectare exceed efficient levels and could be reduced substantially with negligible impact on yields.¹⁶¹

In Africa, by contrast, fertilizer use is extremely low—around 9–10 kilograms per hectare on average in 2013, compared with an average of 150 kg/ha in Asia.¹⁶² A World Bank publication in 2007¹⁶³ summarized the reasons for such low application rates, which still apply:

- Fertilizer prices are high in Africa compared to the rest of the world, which results in high prices of fertilizer relative to crop prices, a key determinant of how much fertilizer farmers use.¹⁶⁴

- Exceptionally high year-to-year variation in fertilizer production and prices makes annual investments in fertilizer by African farmers risky compared to investments by farmers in other regions.

- The physical responses of crops to fertilizer are relatively poor, due in part to rainfall variability and in part to poor soil quality.¹⁶⁵

- A variety of market imperfections, including poor access to credit for small farmers, make all agricultural investments challenging.

In efforts to overcome the market challenges, fertilizer subsidies in Africa were widely implemented from the 1960s through the 1980s. After that time, most countries phased them out or greatly reduced them in response to large balance of payments

deficits and absence of foreign exchange reserves. Strong concerns expressed by the International Monetary Fund, the World Bank, and other international donors also played a significant role. These financial institutions worried about the cost of subsidies to governments, the challenges of targeting subsidies only to those who most needed them, and adverse effects on the development of private-sector fertilizer systems.¹⁶⁶

However, the experience of Malawi helped change perceptions of what could be achieved by fertilizer subsidies.¹⁶⁷ Between the 1970s and the 1990s, Malawi went from producing a large food surplus to a large deficit. Three-quarters of the country's rural households experienced food shortages four to five months of the year and, in 2001–2 and 2004–5, Malawi faced severe hunger, exacerbated by an influx of refugees from civil war in Mozambique. In 2005, the country announced a subsidy program to provide 26 kg of fertilizer and 5 kg of improved seed to 2.5 million farmers. The program that year contributed to a 15–22 percent increase in maize production, restoring the national production surplus. Maize yields continued to grow in the next several years, and the program received considerable public attention.¹⁶⁸

This apparent success in Malawi encouraged other African countries to reinstitute extensive subsidy programs.¹⁶⁹ As of 2013, subsidies supported roughly 40 percent of fertilizer use in sub-Saharan Africa.¹⁷⁰

Faced with the Malawi example, international institutions and aid agencies to some extent modified their views, but they recommended that governments direct their efforts toward “smart” subsidies:¹⁷¹

- Subsidies should be structured to avoid displacing existing commercial sales, which means they should be tailored to support farmers who would not otherwise use fertilizer.

- Subsidies should encourage development of private markets, for example, by the use of coupons that can be used to purchase fertilizer from any supplier, rather than through government distribution channels.

- Subsidies should be temporary.
Nonetheless, economists have done much analysis of fertilizer subsidy programs and have expressed a high level of skepticism about their merits based on several considerations:

* Due to the difficulty of targeting fertilizer subsidies only to farmers who would not otherwise use fertilizers, several studies have found that farmers use much of the money not to increase fertilizer use but to purchase fertilizer they would have bought anyway. One reason is that even programs based on vouchers distributed to the poor may result in poor farmers selling the vouchers to better-off farmers.¹⁷²

* One study showed that the quantities of fertilizer imported by the government to be sold in subsidized form was much larger than the quantity ultimately purchased by farmers in subsidized form, indicating that one-quarter to one-half of subsidized fertilizer was actually diverted to intermediaries before being sold to farmers.¹⁷³

* Due to political favoritism, corruption, or simply the difficulty of truly targeting programs, many of the funds have supported wealthier farmers and have not been targeted at those who are most vulnerable.¹⁷⁴ In Zambia,

one study found that the 73 percent of farms cultivating less than 2 ha, with 78 percent of those smallholders in poverty, received only 45 percent of the subsidies. Farms of 10–20 ha were significantly more likely to receive fertilizer subsidies.¹⁷⁵

At least some of the fertilizer subsidy programs have not worked to encourage the emergence of private fertilizer distributors and retailers and therefore have had negative impacts on the development of the private sector and competition.¹⁷⁶

Moreover, more recent studies of Malawi's experience have started to shed some doubt on initial claims that the subsidy program boosted production. Some researchers have pointed out that official estimated growth in maize yields in Malawi appeared inconsistent with farm-level studies and other data, and there was little evidence of declines either in rural poverty or in maize prices after the new subsidy program, both of which should have declined if production had increased.¹⁷⁷ Weather also played a large role. Maize yields that reached roughly 2 tons per hectare per year from 2007 to 2009 fell back to roughly 1.5 tons in 2010–12 even with continuation of the subsidy program. At least one study, however, has found small positive effects on agricultural wages.¹⁷⁸

<figure><img src="image_209.png" /></figure>
Ultimately, the biggest issue remains cost. In 2011, 10 African countries spent $1.05 billion on input subsidies, mostly fertilizer, which represented 29 percent of their collective public expenditures on agriculture.¹⁷⁹ In 2004–5, Zambia devoted one-third of its entire public budget to fertilizer subsidies.¹⁸⁰ In Malawi, the cost reached 60 percent of the entire national budget in a peak year. As FAO noted, fertilizer subsidies “are too costly and, as such, unsustainable in the long-term.”¹⁸¹

## Recommendations

A key question is what alternative policies exist for judiciously boosting fertilizer use. One set of options involves efforts to make fertilizer less expensive because evidence shows that farmers in Africa, as elsewhere, respond to lower fertilizer prices.¹⁸² Reasons for high fertilizer costs identified by the World Bank include the small market (which inhibits economies of scale), lack of access to credit by importers, high transportation and handling costs, excessive differentiation of fertilizer products, and poor dealer networks.¹⁸³ Policies to boost fertilizer use could address these challenges through several measures:

### Encourage private fertilizer markets

Public policies have often contributed to the high cost of fertilizer through measures that restrict or tax fertilizer imports, limit credit, or use government agencies to control fertilizer sales, all of which tend to lead to high prices.¹⁸⁴ A first set of advisable measures is therefore to eliminate these barriers and encourage private fertilizer markets. Kenya successfully boosted fertilizer use largely by avoiding government competition and eliminating import and price controls. Between 1993 and 2007 fertilizer use doubled, despite the elimination

of subsidies.¹⁸⁵ Between 2002 and 2009, fertilizer use in Kenya averaged almost 30 kg per hectare,¹⁸⁶ fertilizer applied to maize rose from 84 kg/ha to 111 kg/ha, and maize yields increased by 18 percent. In the more productive areas of western Kenya, fertilizer use now rivals that of Asia and Latin America.¹⁸⁷

### Reduce transportation costs

High transport costs appear to be the single most important factor explaining high fertilizer prices in much of Africa.¹⁸⁸ High costs start with inefficient ports and then quickly rise with distance from port. Kenya's port of Mombasa is the primary port in Eastern Africa, and fertilizer is roughly 20 percent less expensive in Mombasa than in western Kenya and roughly half the price it is in Malawi.¹⁸⁹ Road improvements are therefore valuable.¹⁹⁰ Although roads are also expensive, the International Fertilizer Development Center has argued that substantial fertilizer price reductions could be achieved in parts of Africa by changing port management systems, arranging two-way truck transport, and incorporating some feasible improvements in rail management.¹⁹¹ Major improvements in road infrastructure in Ethiopia from 1997 to 2011 appear to have played a substantial role in increasing fertilizer use and boosting yields.¹⁹²

### Increase the yield benefits of adding more fertilizer

A third set of measures increases the yield effects of adding more fertilizer. Researchers have demonstrated that farmers' decisions to use little fertilizer are often rational in light of the low crop response. For example, in good farmland in western Kenya, the response of maize to fertilizer is high, and farmers use high levels of fertilizer.¹⁹³ But in other parts of Kenya and most of sub-Saharan Africa,
crop responses are low, and thus farmers use little fertilizer.¹⁹⁴ As one study emphasizes, “The evidence from agronomic and soil science disciplines indicates that increasingly continuous cultivation, associated soil degradation, low soil organic matter, and soil acidity problems will lock a growing proportion of African farmers into low crop response rates to fertilizer use.”¹⁹⁵

Unfortunately, as we discuss in Chapter 13 on soil and water management, no one has developed a silver bullet for improving soil fertility or otherwise facilitating the use of fertilizer. Options include everything from agroforestry and other measures to improve levels of soil carbon (organic matter), to improved credit access, crop breeding, irrigation, and pest control.¹⁹⁶ Many African governments have developed agricultural investment lists in reports prepared with the African Union as part of the Comprehensive Africa Agriculture Development Programme. But there is no simple, proven list of alternative investments.

In this context, fertilizer subsidies will remain attractive to governments. Even when misused, funds do go directly to large numbers of farmers. In Kenya, despite its success in increasing fertilizer use without the use of subsidies, the government reinstituted subsidies in 2008–9 in response to rising global fertilizer prices at the time and political upheaval following contested election results. These subsidies have continued.¹⁹⁷ Although the research arguments against fertilizer subsidies are strong overall, the case against fertilizer subsidies rests on proof that funds can be better spent elsewhere. Researchers could strengthen their case by costing out specific, alternative agricultural investment strategies and likely results.

## Earning Dedicated Climate Funding

At the international climate conference in Copenhagen in 2009, developed countries pledged to provide $100 billion per year in assistance to developing countries, both to adapt to climate change and to mitigate GHG emissions. This funding has been slow to materialize, and the economic downturn in much of the developed world that started in 2008 did not help. To date, developed countries are not on track to meet their goal.¹⁹⁸ But they have begun to raise their funding commitments, some of which they will distribute directly and some of which will pass through the Green Climate Fund (GCF). As of September 2017, the latter had received funding of roughly $10 billion in total for all climate-related work, not merely agriculture.¹⁹⁹ The GCF has adopted policies to allocate roughly half to adaptation and half to mitigation.

Before countries or the GCF distribute large sums of money for mitigation, they demand clear plans showing how funds will be spent and estimates of what will be achieved. Agriculture will probably find itself at a disadvantage compared to other sectors. It is much easier to estimate the GHG emissions savings from a project to replace a coal-fired power plant with a wind power system than it is to estimate the savings from efforts to improve the livestock sector. And it is easier to guarantee construction of the wind farm than to guarantee those livestock improvements. Focusing on energy alone, however, ignores the largest source of emissions for many developing countries.²⁰⁰

The best way for agriculture to claim a reasonable share of climate funding for mitigation will be to generate highly specific mitigation plans that are persuasive, detailed enough to guide implementation, and measurable enough to be monitored. Throughout this report, we have highlighted ways to meet these criteria when addressing particular sources of emissions.
<figure><img src="image_210.png" /></figure>
STRENGTHENING
RESEARCH AND
DEVELOPMENT

This report has consistently emphasized the need for additional
research to overcome the many obstacles to achieving a
sustainable food future. It has also stressed adequate funding
to pursue research into the most promising leads. Meeting
these needs will require increasing the quantity of funding well
beyond what is currently available, putting more effort into the
direct application of research, and pursuing critical technological
breakthroughs.
## Funding for Research and Development in General

The period since 2001 has witnessed some modest growth in agricultural R&D funding. Global public research spending grew from $26.1 billion in 2001 to $31.7 billion in 2008,²⁰¹ the last year for which we can obtain truly comprehensive information. Spending on public and nonprofit R&D grew modestly in 30 of 39 countries in sub-Saharan Africa for which data are available. The increase between 2001 and 2014 was roughly 30 percent (from about $800 million to $1.06 million).²⁰² However, growth has been uneven and spending in many food-insecure regions remains inadequate. Roughly half of the total agricultural R&D growth from 2001 to 2008 occurred in China and India.

Private sector research has also experienced growth. Total private food sector R&D reached $20 billion globally in 2010,²⁰³ and in the United States and Europe the private sector has taken over the incremental improvement and production of many seeds. But globally, only $3.7 billion of these private R&D funds were directed at crop breeding.²⁰⁴ Abundant evidence indicates that agricultural R&D generally pays off, with estimates commonly in the range of annual returns of 40 percent.²⁰⁵ China and Brazil, recent global leaders in agricultural R&D, saw their agricultural productivity between 1979 and 2009 increase by 136 percent and 176 percent, respectively.²⁰⁶

With agricultural research underfunded in general, and agricultural research related to climate mitigation barely funded at all, the world is unlikely to solve the challenge of achieving a sustainable food future without a large increase in R&D. Viewed more optimistically, the current low levels of research suggest that new investment has a good potential to produce high returns.

A reasonable initial goal would be to raise agricultural R&D in low- and middle-income countries from the current 0.5 percent to 1.0 percent of their agricultural output production value. This would involve an increase of roughly $15 billion per year. The burden of this growth should be shared by high-income countries. The growth should occur in ways designed to guarantee continuity, development of infrastructure, and advancement of partnerships that allow low- and middle-income countries to benefit from newer breeding methods.

## Funding the “D” in R&D

Many strategies for boosting agricultural production while reducing GHG emissions require detailed technical assessments of farm practices, land-use characteristics, and infrastructure in a given area. These assessments must be continually updated and improved over time. Such analyses involve science and engineering, not basic research, and are therefore analogous to the “development” portion of “research and development.” At this time, however, no entities appear responsible for these assessments, nor are governments funding them at the level of detail required.

For example, our assessment of flooded rice farming (in Chapter 28) found that various strategies for reducing or interrupting the periods of flooding could dramatically reduce emissions, reduce on-farm water use, and potentially boost yields—at least modestly—for most farms. Yet rice farmers cannot practically implement improved management practices unless they can control their water enough to drain and fill fields when needed. The capacity of farmers to do so varies by irrigation district and farming system. Mitigating GHG emissions from rice therefore requires reasonably detailed engineering assessments, irrigation district by irrigation district. Yet to our knowledge no entity is responsible or funded for this task.

Similarly, as we described in Chapter 11 on sustainable intensification of livestock farming, several global studies have shown that beef and dairy systems around the world can greatly reduce their GHG emissions through more efficient feeding and grazing practices, reduced mortality, and improved fertility of pastureland. Yet actually encouraging these changes at the local level requires detailed understanding of the type and location of beef and dairy operations, how feeds are used, how feeds are produced, how cows are managed, and the economic and technical options for improvements. This information can form the basis for changes in infrastructure and new financial incentives to encourage improvements, but such innovations must be tailored to the locale and farm type.

These are just two examples of the type of detailed planning efforts that must occur to take advantage of technical opportunities to boost production and reduce emissions. Reducing land-use change emissions, improving the efficiency of fertilizer uptake
by crops, and improving the water- and land-use efficiency of aquaculture all require these kinds of detailed assessments to animate coordinated efforts. And, as planning moves forward, specific needs for new technologies are likely to become clear—such as a lack of knowledge of soils in a particular location or the lack of an appropriate grass or legume variety necessary to implement a promising grazing system. When a company develops a new product, a university develops a new educational initiative, or a health service addresses a particular public health challenge, they require coordinated planning efforts, technical assessments, and specific studies to address revealed information gaps. Mitigating agricultural emissions while boosting production will require the same type of coordinated effort.

Technical planning efforts may focus on a whole country or on a portion of a country. Based on our assessment of what is needed for detailed decisions on spending and other policies, technical plans should share the following characteristics:

- Start with detailed assessments of representative farm types sufficient to assess farm performance and opportunities.

- Include information about farms and land use that is both disaggregated to the local level and aggregated to the provincial and national levels.

- Assess land use and recent patterns of land-use changes using more detailed and reliable methods that can typically be undertaken at global levels.²⁰⁷

- Estimate GHG emissions using methods that are detailed enough to assess how they would change under promising changes in management.

- Include mechanisms for assessing the economics of these management changes, including benefits and costs to farmers and other actors.

- Organize information in easily accessible and understandable formats that allow analysis of improvement scenarios.

- Host online systems that incorporate changing and improved information.

- Integrate work of national and global researchers.

As international development institutions move to support climate-smart agriculture, the lack of funding for this kind of technical planning presents a major obstacle. For example, countries typically use World Bank agricultural loans exclusively for direct agricultural investments and aid. Countries must themselves cover the costs of administering the loans and any technical planning efforts. The World Bank and other funding institutions should develop systems to ensure that at least a small percentage of agricultural project costs support the planning and analytical work necessary to make agricultural plans truly climate-smart. Such systems could include dedicated grant funds or project/loan requirements to apportion, for example, 2–3 percent of funding for this kind of work.

## Funding Needed for Breakthrough Technologies

The steady, incremental growth of crop and livestock yields, and recent improvements in input efficiency in developed countries, reflect the continuous development by researchers of a wide range of new seeds, new breeds, and new management techniques. As discussed previously, we assume continued incremental improvement in our 2050 baseline projections. We also call attention to many breeding opportunities to reduce environmental impacts.

In order to achieve a sustainable food future, the world's food system will need to develop and deploy a number of breakthrough technologies as well. Table 37-1 summarizes some of the innovations identified in this report.

These research efforts require dedicated and coordinated funding, directed with intelligence, just as funding institutions support multiyear efforts to cure specific diseases or to develop new energy technologies. Private sector research should be adequate in some areas; developing improved meat substitutes from plant-based ingredients is one such example. But the private sector is unlikely to devote serious funding to most of the items in Table 37-1 and will likely ignore them unless GHG emissions regulations, taxes, or strong financial incentives are in place to assure a market for innovative new products or techniques.
Additional, coordinated funding is therefore needed. In 2009, several governments agreed to form the Global Research Alliance for Agricultural Greenhouse Gas Mitigation precisely because of this need. New Zealand hosted the first meeting and provided much of the motivation, reflecting its commitment to reduce its emissions under the Kyoto Protocol and the fact that almost half of the country's GHG emissions come from agriculture. By 2017, 46 countries had joined, and the alliance now comprises a series of scientific working groups. Although on the right track, the alliance has limited resources. In the absence of additional resources, only limited coordination and development is possible. Another challenge is that in many countries, agricultural agencies are the primary agricultural researchers. Notwithstanding the strong motivations of the individuals involved, these

agencies were historically established to promote agricultural production. It will take real effort to expand their missions to include GHG emissions mitigation.

The alliance provides a structure for international coordination but requires additional funds to effectively support the development and deployment of the kinds of breakthrough technologies listed in Table 37-1. In addition, research agencies with a broader mandate than agricultural research should become involved along with climate-focused institutions such as the Green Climate Fund, the World Bank, and international development agencies. International efforts should adopt good research grant-making procedures, such as professional administration and panels of outside scientists to review and rank proposals.

<table><caption>Table 37-1 | Critical research needs for breakthrough technologies</caption><thead><tr><th>SELECTED MENU ITEM</th><th>RESEARCH NEED</th><th>COMMENT</th></tr></thead><tbody><tr><td colspan="3">DEMAND-SIDE SOLUTIONS</td></tr><tr><td colspan="3">Course 1: Reduce growth in demand for food and other agricultural products</td></tr><tr><td>Reduce food loss and waste</td><td>Development of inexpensive methods to prevent decomposition without refrigeration</td><td>Companies are investigating a variety of compounds, such as spray-on films that inhibit bacterial growth and hold water in.</td></tr><tr><td>Shift to healthier and more sustainable diets</td><td>Development of inexpensive, plant-based products that mimic the taste, texture, and experience of consuming beef or milk</td><td>The private sector is making significant investments in various plant-based substitutes including imitation beef containing heme, which appears to bleed like real meat.</td></tr></tbody></table>
<table><caption>Table 37-1 | Critical research needs for breakthrough technologies (continued)</caption><thead><tr><th>SELECTED MENU ITEM</th><th>RESEARCH NEED</th><th>COMMENT</th></tr></thead><tbody><tr><td colspan="3">SUPPLY-SIDE SOLUTIONS</td></tr><tr><td colspan="3">Course 2: Increase food production without expanding agricultural land</td></tr><tr><td>Increase livestock and pasture productivity</td><td>Breeding of better, high-yielding forage grasses that can grow in "niche" production areas</td><td>In much of Africa and Asia, with limited land available, quality forage for cattle depends on producing high-quality grasses and legumes in restricted land areas, such as underneath forest or banana plantations.</td></tr><tr><td>Improve crop breeding to boost yields</td><td>Breeding of cereals to withstand higher peak temperatures</td><td>Recent research has shown that high peak temperatures, particularly at critical growth periods, can greatly restrict cereal yields, and that climate change may push temperatures to exceed peak thresholds.</td></tr><tr><td colspan="3">Course 4: Increase fish supply</td></tr><tr><td>Improve productivity and environmental performance of aquaculture</td><td>Development of fish oil substitutes from microalgae, macroalgae (seaweeds), or oil seeds for aquaculture feeds</td><td>Research groups have developed initial breeds of rapeseed containing oils nutritionally equivalent to fish oils and promising seaweed varieties. Work is also proceeding on more economical production of algae.</td></tr><tr><td colspan="3">Course 5: Reduce GHG emissions from agricultural production</td></tr><tr><td>Reduce enteric fermentation through new technologies</td><td>Finding feed compounds, drugs, or breeds that lower methane emissions from cows, sheep, and goats</td><td>Several research groups are working on feed compounds to reduce methane emissions. After years without promising results, a private company has claimed 30 percent emissions reductions from a cheap compound that does not appear to have significant impacts on animal health or environmental side effects.</td></tr><tr><td>Reduce emissions through improved manure management</td><td>Development of lower-cost ways to dry and consolidate manure, stabilize nutrients to reduce methane and nitrous oxide emissions, and make them easier to use efficiently with crops</td><td>Technologies exist to dry manure and turn it into energy, but costs and leakage rates reduce viability and GHG emissions reduction benefits.</td></tr><tr><td>Reduce emissions from manure left on pasture</td><td>Breeding of traits into pasture grasses to inhibit formation of nitrous oxide or developing safe, ingestible nitrification inhibitors for livestock</td><td>Researchers have discovered one variety of Brachiaria that significantly inhibits nitrification and thus nitrous oxide formation.</td></tr><tr><td>Reduce emissions from fertilizers by increasing nitrogen use efficiency</td><td>Development of more effective, lower-cost, and integrated compounds such as improved nitrification inhibitors to reduce nitrogen losses associated with fertilizer use and breeding nitrification inhibition into crops</td><td>Various compounds exist and appear to be effective but improvements should be possible, including more tailored understanding of which compounds are most effective under precisely which conditions. Researchers have now identified traits to inhibit nitrification biologically in some varieties of all major grain crops that can be built upon through breeding.</td></tr><tr><td>Adopt emissions-reducing rice management and varieties</td><td>Development of rice varieties that emit less methane</td><td>Researchers have shown that some common rice varieties emit less methane than others and have bred one experimental rice variety that reduces methane emissions by 30 percent under scientifically controlled conditions, although its effects on yields are unknown.</td></tr></tbody></table>

Note: This table is not intended to be exhaustive and does not include all courses or menu items.

Source: Authors.
1. World Bank (2008).

2. Collier (2008).

3. Farms of more than 500 ha, including pasture, controlled 63% of Brazilian farmland in 2013 but accounted for only 1% by number of Brazilian farms. Farms of more than 500 ha of crop-land only accounted for 2% of all farms but generated 50% of production (de Souza Ferreira Filho and de Freitas Vian 2016).

4. Hazell et al. (2007).

5. Collier (2008).

6. World Bank (2008), 91, Figure 3.7.

7. Ser Huay Lee et al. (2014).

8. Lowder et al. (2016).

9. Chand et al. (2011).

10. Chand et al. (2011).

11. SAIN (2011).

12. Fan et al. (2008).

13. Deininger et al. (2011); Ali and Deininger (2014); Larson et al. (2014).

14. Holden and Otsuka (2014).

15. Hazell (2007).

16. Jayne et al. (2016).

17. Place (2009).

18. Chand et al. (2011); Jayne et al. (2016a).

19. Chand et al. (2011).

20. Lowder et al. (2016).

21. Lowder et al. (2016).

22. HLPE (2013).

23. World Bank (2008); Lowder et al. (2016), Table 3.

24. World Bank (2008); Lowder et al. (2016).

25. Jayne et al. (2016a).

26. Ji et al. (2016).

27. Hazell et al. (2007).

28. Hazell (2011).

29. Hazell et al. (2007); Poulton et al. (2010).

30. Harris and Orr (2014).

31. Waithaka et al. (2006).

32. Frelat et al. (2015).

33. Wiggins (2009).

34. World Bank (2008); Holden and Otsuka (2014).

35. World Bank (2008).

36. Borger (2008).

37. The International Institute for Environment and Development has done a large series of investigations and papers on land acquisitions, many of which can be found at http://www.iied.org/understanding-growing-pressures-land-land-grabbing-beyond.

38. Deininger et al. (2011).

39. Rulia et al. (2013), Table 1.

40. GRAIN (2016). GRAIN focused on an important subset of land deals that were initiated after 2006, have not been canceled, are led by foreign investors, are for the production of food crops, and involve large (> 500 ha) areas of land.

41. Information on acquisitions is being acquired by Land Matrix, a cooperative venture of many respected institutions. Members include the International Land Coalition, CIRAD, the Centre for Development and Environment of the University of BERN, GIGA, and GIZ.

42. Land Matrix database, accessed July 2016. This chart shows completed land acquisitions for agriculture. To meet criteria, deals involve land use for any purpose that must "entail a transfer of rights to use, control or ownership of land through sale, lease or concession; have been initiated since the year 2000; cover an area of 200 ha or more; imply the potential conversion of land from smallholder production, local community use or important ecosystem service provision to commercial use." See more at http://www.landmatrix.org/en/about/.

43. As one study explains, estimates vary substantially by research group, which may in part reflect the sources of information and kinds of transactions being counted, which may range from announcements in the press, to applications, to memoranda of agreements, to completed leases (Cotula et al. 2014).

44. Brautigam (2015).
45. According to the most recent figures in Land Matrix, Chinese interests acquired 437,000 ha in Africa. Land Matrix Online DataBase, accessed July 14, 2016.

46. Cotula et al. (2014).

47. Schönweger et al. (2012).

48. Many examples are described in Brautigam (2015); and Pearce (2012).

49. Pearce (2012); Cotula et al. (2014).

50. Cotula et al. (2014).

51. Cotula et al. (2014).

52. Farmland held by large-scale domestic owners is underreported, and anecdotal evidence suggests that national elites and the urban middle class are involved in land acquisitions in several African countries. See, for example, Cotula et al. (2009); Jayne et al. (2016a); Blas and Wallis (2009); and Koussoubé (2013).

53. The 17.3 million ha included 500 deals.

54. German et al. (2011).

55. Rosenbarger et al. (2013).

56. German et al. (2011).

57. Cotula et al. (2014); Pearce (2012).

58. Notess et al. (2018).

59. German et al. (2011); Cotula et al. (2014); Feed the Future (n.d.).

60. Land Matrix database, accessed July 2016.

61. Pearce (2012).

62. An image of land deals around the world is provided by Pearce (2012). For Indonesia, see Obidzinski et al. (2012). For Africa, see Cotula et al. (2014); and German et al. (2011). For Cambodia, see Colchester and Chao (2011).

63. Cotula et al. (2014).

64. Examples include descriptions of land acquisitions in Ethiopia in German et al. (2011).

65. For example, in the Gambella region of Ethiopia, where Saudi and Indian companies have cleared and drained thousands of hectares in part to grow food crops such as rice, maize, and sorghum, the goal of exporting down the Nile appears to have been important (Pearce 2012), 7.

66. German et al. (2010a); German et al. (2011).

67. Schönweger et al. (2012).

68. Schönweger et al. (2012).

69. Veit and Sarsfield (2017); Pearce (2012).

70. Pearce (2012), 55–63.

71. Neville (2015); McVeigh (2011).

72. German et al. (2010b).

73. German et al. (2011).

74. Global databases on land deals do not provide comprehensive summary statistics on existing land use, land cover, and land tenure. Where data are available, they do not clearly and consistently differentiate between cropland and less intensively used land. For example, a Land Matrix newsletter summarized data for September 2015 that covered 38.9 Mha, of which 26.3 Mha had no information on existing land use. Land use was known for deals covering 12.6 Mha, of which 4.2 Mha were former commercial (large-scale) agriculture, about 3.9 Mha were smallholder agriculture, 3.6 Mha were forestry, 0.6 Mha were for pastoralists, and 0.3 Mha were for conservation. Land cover data for these deals indicated 6.4 Mha of forest, 4.5 Mha of cropland, 2.6 Mha of shrubland/grassland, and 1.8 Mha of marginal land. Land cover data were not available for 23.5 Mha.

75. German et al. (2011).

76. Koh and Wilcove (2008).

77. Thomson Reuters Foundation (2017); Hemphill (2017).

78. Deininger et al. (2010); German et al. (2011a); Cotula (2011).

79. Schoneveld et al. (2010).

80. German et al. (2011).

81. German et al. (2010b).

82. German et al. (2010b).

83. Andriani et al. (2011).

84. Larsen et al. (2015). This short paper cites to the underlying studies.

85. Larsen et al. (2015).

86. Larsen et al. (2015); German et al. (2010a).

87. Butler (2009); Budidarsono (2012), 6.
88. There is no good dataset for the compensation typically provided to communities, but extensive contacts between WRI staff and local communities over the years indicate that payments do not approach these estimated oil palm values.

89. German et al. (2011).

90. German et al. (2011); FAO (2010a); FAO (2010b).

91. For further discussion on this report's criteria for a sustainable food future, see the first section of this report, "Scope of the Challenge and Menu of Potential Solutions."

92. Bellemare (2015).

93. For Africa, for example, see Kherallah et al. (2002).

94. As Key and Runsten (1999) noted, "Contract farming has also been critiqued as being a tool for agroindustrial firms to exploit an unequal power relationship with growers. While farmers usually enter into contracts voluntarily, they may, over time, invest fixed resources into production or alter their cropping patterns so as to become overly dependent on their contract crops. When this is the case, growers face limited exit options and reduced bargaining power vis-a-vis the firm and forced to accept less favorable terms."

95. This is a consistent finding of studies and summarized in Ton et al. (2018) among other meta-analyses.

96. Ton et al. (2018).

97. Ton et al. (2018). Minot and Sawyer (2016) found that contract-farming in developing countries improves farm productivity and incomes, with income effects mainly in the range of 25 to 75%. Otsuka et al. (2016) and Wang et al. (2014) also found income and productivity gains in meta-analyses of contract farming in both developed and developing countries. Bellemare and Novak (2017) found benefits for contract farming from six regions in Madagascar. For examples of the variety of experiences even in limited regions, Narayanan (2014) found high variability in the income effects of contract farming in Southern India although average benefits overall.

98. Bellemare (2015).

99. Maertens and Vande Velde (2017) found that benefits from an aid agency promoted effort to support contract farming in Benin. Ragasa and Kufoalor (2018), however, found that donor-supported efforts to promote agricultural intensification of maize in Ghana resulted in higher costs to farmers that were not fully justified by higher prices and production.

100. Minot and Sawyer (2016).

101. For papers on the effects of the Bolsa Família program, see Soares et al. (2006); Vaitsman and Paes-Sousa (2007); and Fernald et al. (2008).

102. For example, Todd et al. (2009) found that cash transfers enable small farmers to increase the diet diversity and nutritional quality of what they grew for themselves.

103. World Bank (2008).

104. World Bank (2008); Place (2009).

105. For China, see Jacoby et al. (2002). For Eastern Europe, see Rozelle and Swinnen (2004). For Latin America, see Deininger and Chamorro (2004); and Fort (2007). For Thailand, see Feder et al. (1988).

106. Place (2011).

107. See the discussion of Tanzania in Notess et al. (2018), 23, Box 3.

108. Peters (2009).

109. Lawry et al. (2014).

110. German et al. (2011).

111. Adedipe et al. (1997); Adekanye et al. (2009).

112. Byamugisha (2013), 1.

113. Veit (2011).

114. Place (2011), paraphrasing Van den Brink (2005).

115. Byamugisha (2013), 8.

116. Deininger et al. (2011); Bezabih and Holden (2010).

117. Marfo et al. (2012).

118. Nolte et al. (2013).

119. Ding et al. (2016).

120. For more on how carbon pricing works, see Kennedy et al. (2015).

121. IPCC (2003); INPE (2009).

122. Tollefson (2016).

123. New Zealand Government (2013).

124. New Zealand Government (2013).
125. A basic description of New Zealand's emission trading system is available at the website of Te Uru Radau at https://www.mpi.govt.nz/growing-and-harvesting/forestry/forestry-in-the-emissions-trading-scheme/ (last accessed August 15, 2018).

126. Examples include Koper (2014); and Parkhurt (2015).

127. De Pinto et al. (2010).

128. The CDM allows European companies responsible for cutting their emissions to obtain credit as an alternative for paying for actions in developing countries that cut their emissions. Only a few potential agricultural practices have qualified under CDM methodologies, mostly including managing of manure or wastes, or planting trees on agricultural land. As of 2011, one study found that agriculture or other land-use projects were expected to generate less than 1% of total CDM projects. Larson et al. (2012).

129. The Alberta system allows offset credits for changes in cropping systems, three ways of increasing feeding efficiencies, various efforts to reduce nitrous oxide, improvements in dairy cow efficiency, and capture of biogas from manure. Stockholm Environment Institute and Greenhouse Gas Management Institute (2011).

130. Vasa and Neuhoff (2011).

131. Haya (2009).

132. Searchinger, Edwards, Mulligan et al. (2015) showed that government models estimating greenhouse gas emissions reductions for grain-based biofuels are estimating large reductions in food consumption, which are the source of the greenhouse gas benefits through reduced breathing out and generation of wastes of carbon by people and livestock.

133. De Pinto et al. (2010).

134. FAO (2012c). This figure is an estimate of the total value of agricultural capital stock.

135. Lowder et al. (2012), Figure 2.

136. FAO (2012c), Figure 8.

137. World Bank (2008).

138. Analysis by the authors from OECD database on agricultural price support. OECD (2016).

139. According to the World Bank, total agricultural value added in 2015 was $3.175 trillion (World Bank 2017e).

140. Smith et al. (2017).

141. GAO (2003).

142. Claassen et al. (2004) estimated that the wetland programs had probably reduced wetland drainage based on the continued status as wetlands of several million acres that the study estimated were profitable to convert. Since that date, there have been no comparable studies offering estimates. USDA/ERS (2017b) also estimated that the erosion control provisions had achieved some reduction of water erosion, and possibly of wind erosion as well.

143. Hart et al. (2017). Farmers are required to follow crop diversification, but that only means they must grow two or three separate crops somewhere on their land. They are required also to devote 5% to ecological focus areas, but that can include any kind of cover crop grown on 5% of their land. Finally, national governments must protect 95% of existing grasslands, which may not result in any restrictions on individual farms.

144. Based on data from the OECD, the combination of funding from the European Union and member states for individual farm payments was roughly 61 billion euros per year in 2014–16, and the two combined provided 19 billion euros for rural development. See Searchinger et al. (2018b).

145. Searchinger et al. (2018b); Hart et al. (2017); Jongeneel et al. (2016); European Network for Rural Development (2017).

146. Huang et al. (2017).

147. Email communication with Jikun Huang, March 2017.

148. Hua et al. (2016) found that plantation forests reestablished in one province actually had less biodiversity value than the forests they replaced. For papers estimating soil carbon gains from the reforestation programs, see Persson et al. (2013); and Song et al. (2014). Anna et al. (2017) found that grassland rehabilitation programs had not consistently sequestered carbon.

149. World Bank (2008).

150. IFPRI (2013).

151. Gulati and Narayanan (2003); Gale (2013).

152. Li et al. (2014).

153. Fan et al. (2007); Morris et al. (2007).

154. Fan et al. (2008); Gulati and Narayanan (2003); Gale (2013).

155. Li et al. (2014).

156. See papers discussed in Jayne and Rashid (2013) finding that African farmers tend to apply fertilizer at rational rates given prices. For China, see Zhou et al. (2010).

157. Zhang et al. (2015b).
158. Gulati and Banerjee (2015).

159. GKTODAY (2012); Himanshu (2015).

160. Gulati and Banerjee (2015).

161. Qiu (2009).

162. See also AGRA (2013).

163. Morris et al. (2007).

164. World Bank (2008), Figure 6.2.

165. Morris et al. (2007) lists this as only one factor, but researchers since have given it an even heavier emphasis.

166. An excellent summary of experience with African fertilizer programs is set forth in Morris et al. (2007). See also Druilhe and Barreiro-Hurlé (2012); and Jayne and Rashid (2013).

167. Future Agricultures Consortium (2008).

168. Jayne and Rashid (2013).

169. Wanzala-Mlobela et al. (2013). Also see Morris et al. (2007).

170. Wanzala and Groot (2013); Lunduka et al. (2013).

171. World Bank (2008), 152.

172. Holden and Lunduka (2012).

173. Jayne and Rashid (2013).

174. A large number of studies are summarized in Jayne and Rashid (2013).

175. Jayne and Rashid (2013).

176. Druilhe and Barreiro-Hurlé (2012).

177. Pauw and Thurlow (2014).

178. Jayne and Rashid (2013).

179. Jayne and Rashid (2013).

180. World Bank (2008).

181. Druilhe and Barreiro-Hurlé (2012).

182. Ariga and Jayne (2011).

183. Morris et al. (2007).

184. Morris et al. (2007).

185. Ariga and Jayne (2011).

186. Druilhe and Barreiro-Hurlé (2012), Figure 1.

187. Ariga and Jayne (2011).

188. Morris et al. (2007), Table 4.7.

189. Druilhe and Barreiro-Hurlé (2012).

190. Kiprono and Matsumoto (2014).

191. IFDC (2013).

192. Bachewe et al. (2015).

193. Morris et al. (2007).

194. One summary of the whole region found a yield of 8 to 24 kg of maize for each kilogram of nitrogen. This estimate means that even if there were a linear relationship and yields responses were toward the high end of the response to nitrogen, an addition of 50 kg of nitrogen on a hectare would only raise yields by 1 ton. Those yield gains would be meaningful but far less than the response to nitrogen use in developed countries. In addition, in Malawi, the poorest households tend to obtain the lowest response, presumably because they have the poorest-quality land. See Ricker-Gilbert and Jayne (2012).

195. Jayne and Rashid (2013). For additional discussion of fertility problems, see Marenya and Barrett (2009a); Marenya and Barrett (2009b); and Giller and Tittonell (2013).

196. When economists analyze farmer willingness to apply fertilizer, they typically assume high discount rates, which means that farmers must anticipate high returns on investment to take the risk of purchasing fertilizer. See, for example, Druilhe and Barreiro-Hurlé (2012). Reducing the riskiness to farmers of these investments by reducing the consequences of crop failure should therefore increase farmer investments in fertilizer. See the discussion of risk and fertilizer use in Morris et al. (2007).

197. Andae (2015).

198. Roberts and Welkmans (2016).

199. Green Climate Fund (2017).

200. WRI (2016).
201. Beintema (2012). The most recent year that we found with available global figures is 2008.

202. This analysis is based on data provided by the Agricultural Science and Technology Indicators downloaded from the IFPRI website in March 2019. This analysis assumed $1 million of spending in Eritrea in 2011, the last year reported, continued in 2014. The omitted additional countries, which lacked reported data from 2001, contributed roughly an additional $90 million of spending in 2014, although the data do not allow assessment of how that changed from 2001.

203. Fuglie et al. (2011).

204. Fuglie et al. (2011), Table 1.1.

205. Alston et al. (2000).

206. Fuglie (2012).

207. The best way to assess land use change is to combine satellite images with use of more detailed aerial photographs, such as those available from Google Earth to verify the findings from satellite images.

## REFERENCES

To find the References list, see page 500, or download here: www.SustainableFoodFuture.org.

## PHOTO CREDITS

Pg. 434 CIAT/Flickr, pg. 436 Mokhamad Edliadi/CIFOR, pg. 439 Axel Fassio/CIFOR, pg. 441 Marco Simola/CIFOR, pg. 445 Marlon del Aguila Guerrero/CIFOR, pg. 451 Jeff Walker/CIFOR, pg. 454 PXHere, pg. 458 PXHere, pg. 465 Icaro Cooke Vieira/CIFOR, pg. 468 Dean Calma/IAEA.
<figure><img src="image_211.png" /></figure>
CONCLUSIONS

The challenges of creating a sustainable food future, to some extent, are reflected and addressed in the concept of “climate-smart agriculture.” Our menu defines our understanding of that concept, which is less a specific set of practices and more a quality that emerges from highly efficient use of natural resources, innovation in technology and management, and protection of natural lands at a national or landscape level.
Creating a sustainable food future—simultaneously feeding a more populous world, fostering development and poverty reduction, and mitigating climate change and other environmental damage—presents a set of deeply intertwined challenges. Our definition of a sustainable food future overlaps in large measure with the term “climate-smart agriculture” (CSA) but our report offers several insights that differ in direction or emphasis from much prior work (Box 38-1).

The challenge of sustainably feeding nearly 10 billion people by 2050 is substantially greater than commonly presented in land-use or climate mitigation analyses

**Global challenge:** We believe that many studies to date have failed to take account of the full magnitude and interrelated nature of the challenges ahead. Climate estimates generally pay little attention to rising agricultural emissions and often improperly assume that land-use-change emissions will stop. Some agricul-

tural analyses have overestimated the trends of yield gains because, for example, they base their estimates on compound growth rates. Others have simply assumed that other human activities can convert large areas of pasture or woody savannas without food, carbon, or significant biodiversity effects. But the world is on a course (on existing trend lines) to require more than 50 percent more food per year by 2050, which, in our baseline scenario, would be produced by converting hundreds of millions of hectares of land to agriculture and generating 33 percent more GHG emissions from agricultural production relative to our base year of 2010.

**Shifts in locations of agricultural land:** Loss of carbon and biodiversity result not merely from net land expansion but also from shifts in agricultural land locations both between and within regions. This shifting adds greatly to the challenge and makes land-use restrictions or pricing of carbon consequences necessary.

BOX 38-1 | The Menu for a Sustainable Food Future and "Climate-Smart Agriculture" (CSA)

Since the term was coined around 2010, CSA has become an important goal of international institutions, such as the World Bank and FAO. FAO identifies three pillars of CSA: sustainably increasing agricultural productivity and incomes, adapting and building resilience to climate change, and reducing and/or removing GHG emissions. The overlap between this broad definition and the goals of this report is clear, which means that our report can help to define and identify priorities for CSA.

One school of thought, which we consider too restrictive, treats CSA as a set of specific practices, with a particular focus on those that build soil carbon. The original hope was that sequestering carbon in soils would provide a cheap method of reducing concentrations of carbon in the air, which factories and utilities might fund for carbon offsets. Measures such as mulching, agroforestry, and no-till farming would simultaneously mitigate climate change by removing carbon dioxide, boost output

through the greater productivity of carbon-rich soils, and increase resilience to greater fluctuations in rainfall through the ability of carbon-rich soils to hold water longer.

As we discussed in Chapter 30, soil carbon sequestration in agricultural soils turns out to be far more difficult than previously thought, and several measures were more about moving carbon storage around than increasing total storage. The potential of soil carbon sequestration to mitigate other agricultural emissions is limited and is probably needed just to offset emissions not counted today from soil carbon loss. We believe that measures to build carbon in soils should be thought of not as easy climate mitigation or adaptation measures but rather as challenging yet valuable measures primarily to build agricultural productivity, with relatively modest direct climate mitigation through the carbon dioxide removed—but more potential climate benefits through the potential to reduce land conversion.

For these reasons, the menu items proposed in this report offer a broader set of strategies for climate-smart agriculture. They offer major synergies between productivity gains, greater resilience, and GHG mitigation. They support the goal of "produce, protect, and prosper." The core synergy lies in boosting efficiency in the use of land, animals, and inputs, which can raise agricultural incomes while reducing emissions and the demand for land. Yet because productivity gains can exacerbate shifting in locations of agricultural land, the synergy requires strong measures to prevent agricultural land expansion into natural ecosystems.

Because of this synergy—and even though some specific agricultural practices are necessary to mitigate production emissions, such as feed additives for enteric methane—low-emissions agriculture cannot just be one specific set of agricultural practices. Low-emissions agriculture can only emerge from a combination of strategies deployed at national or, at the least, landscape level.
**Sub-Saharan Africa:** Sub-Saharan Africa presents a core challenge for a sustainable food future because of its low yields, high rates of malnutrition, rapid population growth, abundant opportunities to convert additional woody savannas and forests, and hundreds of millions of smallholder farmers. Improving the region's crop yields, focusing land expansion on the lowest-environmental-cost lands (above all by controlling the locations of road improvements), and accelerating progress in education and public health are all critical to success.

## Productivity gains are critical

Under all scenarios, the growth in crop and pasture yields and other forms of agricultural productivity gains are the prime determinants of future emissions and land-use demands (although this fact can be obscured by the large productivity gains already assumed in baselines).

Productivity gains in land, animal, and chemical inputs already in our 2050 baseline are responsible for closing two-thirds of the GHG mitigation gap and more than 80 percent of the land gap that exist if we assume no improvements in efficiency or output relative to 2010 levels (our “no productivity gains after 2010” scenario). When adding in the various additional productivity gains required to meet our 4 gigaton/year GHG emissions target by 2050, the role of productivity gains must grow even larger. Productivity gains also provide the most important potential synergy between income, food security, and environmental goals.

**Crops:** Replicating the large increases in chemical inputs and irrigation water associated with the Green Revolution is no longer possible or consistent with environmental goals. Fortunately, advances in molecular biology and related breeding technologies offer great potential for boosting productivity above trend lines—if research efforts receive sufficient financial support.

**Pasture:** Every hectare of global pasture that is capable of and appropriate for sustainable intensification must be fully exploited to realize its potential to increase milk or meat output several times over.

## Slowing the rate of growth in demand for food and other agricultural products is critical too

**Food loss and waste:** Abundant technical opportunities exist to reduce food loss and waste. The deliberate reduction of food loss and waste, through action by governments, consumers, and food companies, is a newly emerging effort. At this time, it requires commitment, innovation, measurement, and then deployment of promising approaches.

**Diets:** When properly factoring in the effects of diets on land use, dietary choices have far greater consequence for ecosystems and GHG emissions than typically estimated.

**Bioenergy:** To date, the primary effect of public policy has been to make the challenge harder by increasing demand for bioenergy, based on mistaken GHG accounting. Because even a small amount of bioenergy from crops or feedstocks that make use of dedicated land requires a large amount of land, plans for more bioenergy could, alone, derail a sustainable food future.

**Population:** Major economically and socially advantageous opportunities exist to hold down the growth in demand for agricultural products in sub-Saharan Africa. Key strategies are to increase educational opportunities for girls, increase access to reproductive health services, and reduce infant and child mortality. Realizing these opportunities will require major social and financial commitments.

## Production of meat and milk from cattle, sheep, and goats needs to be a core focus of both demand-side strategies and productivity gains

**Forage-based agriculture:** Demand for milk and meat from cattle, sheep, and goats is responsible for most projected future land-use expansion and roughly half of agricultural production emissions. No viable strategy for a sustainable food future exists that does not include huge increases in the efficiency of pasture- and forage-based agriculture and slower growth in demand for ruminant meat.