Restoration
Plantations and tree crop commodities
Enhanced nutrition and food security
Biodiversity, safeguarding and conservation
Nationally determined contributions
Bioenergy and biomaterials
Blue carbon and peatlands
Climate change adaptation
Landscape governance
Gender
Silvopastoral systems
Market-based agroforestry-forestry
Farm-forest policy interface
Agroecology
Livelihood trajectory modelling and assessment
Inclusive finance and business models
Innovating finance for sustainable landscapes
Public and private commitments to zero deforestation
Orphan tree crops
Effectiveness of approaches to sustainable supply
Quality of FTA research for development
Sentinel landscapes
Foresight
Seeds and seedlings delivery systems
Smallholder tree-crop commodities
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The world’s leading organizations on forestry and agroforestry, the Center for International Forestry Research (CIFOR) and World Agroforestry (ICRAF), merged on Jan. 1, 2019, in order to leverage their combined 65 years of research and experience. Directors General Robert Nasi and Tony Simons recently sat down to talk about why the two organizations were merging. They also discussed tackling food security and sustainable landscapes.
Originally published by CIFOR.
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Developing the rubber sector while meeting environment and social objectives involves both challenges and opportunities.
Lying in the shadow of oil palm in terms of sustainable development issues, the sector needs a combination of measures to progress toward sustainable development. There is now a wealth of knowledge and evidence to make this happen.
“Evolution to Revolution: New Paths for the Rubber Economy” was the theme of the World Rubber Summit held in Singapore on March 18-19, 2019, organized by the International Rubber Study Group (IRSG). The CGIAR Research Program on Forests, Trees and Agroforestry (FTA) participated in the summit and I presented during a session titled Managing sustainability performances in the rubber value chain.
Plantations of all major tropical commodities – especially oil palm, timber, pulp, cocoa and rubber – are expanding quickly, creating opportunities for development while also raising concerns about impacts on the environment, landscapes and livelihoods.
FTA has identified plantations as a research priority. Rubber is a particularly interesting example; plantations are continually expanding with a very concentrated sector downstream (the majority being a small number of tire producers), and a production sector heavily dominated by smallholders.
Read also: Challenges and opportunities for sustainable rubber in Myanmar
Rubber at a crossroads
The sector is confronted with a range of issues when it comes to its impact on and contribution to sustainable development.
Land-use change: Rubber is the most rapidly expanding tree crop within mainland Southeast Asia. Additional land will be required to meet future rubber demand, which could be in forested areas or on mosaic landscapes, swidden agriculture and agroforest, though there is also potential to reduce land-use change and deforestation through more intensive systems – both in terms of rubber and other associated production depending on situations.
Biodiversity: In many areas rubber expansion has been on former natural forest, including sometimes in protected areas. The effects of converting primary and secondary forests to rubber monoculture are well understood – it decreases species richness and changes species composition. However, the biodiversity value of swidden agriculture and of mosaic landscapes is less well known and the effects of their conversion to rubber plantations has been assessed in less detail.
Climate change mitigation: The potential contribution of rubber to climate change mitigation depends on what it replaces and the way it is conducted. The impact is generally negative when rubber replaces primary or secondary forests, but positive when planted on very degraded land. The impact can be neutral or slightly positive when rubber replaces swidden systems with a short fallow period, but negative when it displaces swidden systems that will then encroach on forest.
Water and erosion: Effects again depend on what rubber replaces. For instance, there can be less fog interception relative to complex canopies. Conversion to rubber can increase evapotranspiration relative to native vegetation. Rubber risks depleting deep-soil moisture during the dry season with effects on groundwater and streamflow. In mountainous areas of mainland Southeast Asia, plantations on steep slopes have negative impacts on soil erosion, landslide risk and water quality. There are also indications of impacts from rubber plantation runoff on water quality and aquatic biodiversity.
Social issues: Production is still dominated by smallholders in most countries, especially in “traditional” production areas. The establishment of rubber replacing swidden agriculture has substantially increased smallholder income in Southwest China and Northern Thailand. In non-traditional areas, such as Laos, Cambodia, Myanmar and some African countries, the expansion of rubber often takes the form of larger-scale plantations – which could disadvantage rural communities, with some reports of evictions and of poor labor conditions in large-scale plantations.
Resilience to price fluctuations: Rubber prices can be volatile, which is a concern for long-term investment and has consequences for the sustainability of economic and production models. Smallholders who are purely engaged in rubber are very exposed, especially if they are not supported by public policies. Smallholders with diversified systems are the most resilient. Paradoxically, large estates may be more exposed due to monoculture and having to pay a workforce.
Climate change adaptation: Until recently it was difficult to predict the incidence of climate change on violent precipitation and winds, to which plantations are vulnerable. There is also a need for more research on the impacts of climate change on the distribution of pests and diseases. Diversified systems are more resilient to shocks of any kind, including from climate change, and can contribute to adaptation at a landscape level.
Read also: Challenges and opportunities for sustainable rubber in the Lao People’s Democratic Republic
Ways forward
Given these challenges, the potential impacts of rubber expansion and the contribution to the Sustainable Development Goals and the Paris Agreement ultimately depend on three factors. First is where expansion occurs, and the land use or land cover that rubber replaces. Second, it involves production systems, yield and overall efficiency, including the use of rubber wood, as well as impacts on water and biodiversity. The third factor is benefits for smallholders and local populations, contributing to economic and social resilience.
A range of objectives could pave the way forward for sustainable development.
To meet these objectives, it would be necessary to see a combination of measures.
The rubber sector needs measures connecting downstream with upstream, involving various stakeholders, building on science and knowledge and promoting transfer in a practical way. The newly launched Global Platform for Sustainable Natural Rubber (GPSNR) will hopefully address this.
Knowledge and evidence could enable the transition in a proactive way, contributing to sustainable development outcomes. FTA stands ready to work with the GPSNR and to help support the sector move toward sustainable development, “from evolution to revolution”.
By Vincent Gitz, FTA Director
The CGIAR Research Program on Forests, Trees and Agroforestry (FTA) is supported by contributors to the CGIAR Trust Fund.
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Sustainable cocoa has attracted considerable attention. However, stakeholders in cocoa development may differ in their understanding of sustainable cocoa, their interests and actions taken in advancing sustainable cocoa. This article analyses cocoa sustainability at nested scales and analyses to what extent sustainability standards, policies and development projects address sustainability concerns and contribute to ecosystem services. The analysis is based on literature reviews and key informant interviews in Sulawesi (Indonesia), Ucayali (Peru) and Centre Region (Cameroon). Producers in all three countries shared concerns of price volatility, weak farmer organizations and dependence on few buyers. Producers in Sulawesi and Centre Region compensated low returns to cocoa production by diversification of cocoa systems. Public and private development actors were concerned with low production volumes. Research has so far focused on biodiversity loss, which differed depending on the cocoa sector’s age in a country. Policies and development programs in all countries have focused on cocoa sector expansion and productivity increases, irrespective of smallholder needs for economically viable farming systems and existing market structures resulting in little bargaining power to farmers. Sustainability standards have spread unevenly and have converged in compliance criteria over time, although initially differing in focus. Recently added business and development criteria of sustainability standards can potentially address farmers’ concerns. Competing interests and interdependencies between different actors’ responses to concerns have so far not been openly acknowledged by public and private sector actors.
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In the Mount Mutis valley in West Timor, Indonesia, there lives a people with a tradition of hunting. They do not hunt deer or wild boar, but honey. As a non-timber forest product, Mount Mutis honey provides supplementary income for its harvesters’ livelihoods. And because honey production relies on a healthy forest environment, there is an extra economic incentive to ensure protection of the ecosystem it depends on.
Originally published by CIFOR.
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Not even Jennifer’s children know where she hides the chikanda. Why? The small, brownish orchid tubers are highly valued as a cultural delicacy among the Bemba people who live in the Luwingu district of northern Zambia. Overharvesting of chikanda for sale is an important issue in East and southern Africa, but local women have a way to harvest it sustainably. Jennifer explains why chikanda is so important in her culture.
Between 2013 and 2017, the Center for International Forestry Research (CIFOR) conducted a research project called ‘Nutrition and Trees in sub-Saharan Africa’ in five sites across several countries, looking at the contribution that forests and trees in landscapes make to the diets of mothers and their young children. One of these sites was in Luwingu, in northern Zambia. At the end of the project, women from different villages came together to showcase their recipes of traditional foods in a food fair hosted by Zambia’s Ministry of Agriculture and CIFOR.
This video was produced by CIFOR.
This project was funded with UK aid from the UK government. This research is part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), which is supported by CGIAR Fund Donors.
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Palm oil: people love it, hate it or maybe just use it without even knowing. The controversial vegetable oil is found in thousands of consumer products from soap to lipstick, frozen pizza, ice cream and even fuel.
World demand continues to increase rapidly and is placing pressure on forests, mainly in Indonesia. But, for now, the profitable commodity is here to stay. So what can be done to reduce the pressure on forests?
Efforts are ongoing to stop the rapid destruction of tropical forests through more sustainable business practices. In 2004, the Roundtable on Sustainable Palm Oil (RSPO) was launched with the vision to “transform markets to make sustainable oil palm the norm”. Pressure from activists on big corporations that use palm oil in their products has also had some impact, leading them to make commitments to sustainable supply and zero deforestation.
Most action to date has focused on how large palm oil companies do business but increasingly, concerns comprise what the implications are for smallholders, and how smallholders can capture greater benefits from engaging in palm oil supply chains.
In Indonesia — one of the biggest palm oil producing countries alongside Malaysia — up to 40 percent of the land used to grow oil palm is cultivated by smallholders who farm, on average, just 2 hectares each.
The sustainability of the palm oil sector has also triggered Indonesian government efforts to improve the policy environment for inclusion of smallholders, and channeling resources for them to improve practices in management and replanting. There is also an ongoing effort to strengthening the national standards for sustainable palm oil (ISPO).
Read more: Towards responsible and inclusive financing of the palm oil sector
Three teams of researchers from the Center for International Forestry Research (CIFOR) as part of its work under the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) and from partner institutions have produced a series of infobriefs looking at how smallholders can improve their lives and, at the same time, protect remaining forests. The major challenge, according to their findings? Money.
“Oil palm provides more economic benefits to smallholders than other crops, and it’s expanding,” says Pablo Pacheco, a Principal Scientist at CIFOR. “Yet smallholders have to adopt more sustainable practices. Research has to contribute to this, and identify options for them to improve their practices, as well as identify what resources are needed to make that change happen.”
“That’s where financing comes in, and becomes an important key resource for smallholders to be able to access,” he adds.
THE REPLANTING CHALLENGE
The Indonesian government estimates that a total of 175,000 hectares of oil palm farmed by smallholders needs to be replanted each year, and this alone creates major challenges for farmers.
Hans Harmen Smit, global coordinator for palm oil at the Netherlands Development Organization (SNV), one of the partner organizations, was part of the team that examined current finance practices. Their focus was on Indonesia and Malaysia, which together account for about 85 percent of total global palm oil production. Smit says that without proper financing, farmers only replant when they can afford to.
“The problem is, once they replant, they have to wait three years at least for the new plantation to become productive, and during that time they have no income,” he says.
Smallholder income from oil palm varies. On average, smallholders with around two hectares of land can earn a gross monthly income of US$290 to US$400.
Researchers say that without financial support, farmers do not have the resources to replant year after year on the same plot, and so they tend to move to peatlands and forested areas, “slash and burn” the land, and plant the only crops available to them, which are often low-quality varieties.
Smit points out that in Malaysia, the sector has better systems in place for replanting, and smallholders can more easily obtain financial support. In Indonesia, there is the Crude Palm Oil (CPO) Fund that supplies replanting loans, but it is often difficult to access, especially for smallholder farmers with limited funding.
“The lesson learned here is that saving for replanting is often not done as it should be. The government needs to engage more and manage programs to help farmers save for replanting,” says Smit.
He adds that one of the main problems is a lack of available information for financial service providers (FSPs) to evaluate the lending risks and set appropriate interest rates. He says the loans are often too small on an individual level, and this makes the loan origination costs too high compared to their value.
“We need to start by supporting better data collection on the cash flows of smallholders. Once this data is available, we can create investible portfolios for investors,” says Smit.
Read more: The long and winding road to sustainable palm oil
FUNDING THE GAPS
The researchers also identified major gaps between existing credit schemes and what farmers actually need. Addressing this could pave the way for more sustainable palm oil for smallholders.
One key finding was that lenders who do offer credit only provide it in the short term. But what smallholders actually need is both working capital and credit in the long term for replanting and financing other management practices.
“Most lenders also don’t have schemes that take into account the fact that oil palm farmers don’t make any money in the first three or four years, so they can’t make payments at this time unless they find additional sources of income, which is difficult,” says Pacheco.
Another issue is repayment of loans. When ‘tied’ farmers, who are under contract with oil palm plantations, access funds through a cooperative, profits from their harvest are used to pay back their loans. But when individual farmers seek loans, they have to pay back in cash.
Smallholders trying to access loans also face major challenges when trying to meet the requirements of most FSPs.
“Sometimes they don’t have savings accounts or own the land, so they can’t provide collateral,” says Pacheco.
Pricing of the fresh fruit bunches (FFB) produced by oil palm can also be a challenge for farmers. FFB prices are set by governments and oil palm companies, and tied farmers are paid more than independent farmers.
But there are ways to help smallholders overcome these challenges. Incentives and technical support to meet sustainability requirements, land tenure security, and support for FSPs to assess and manage risks, and build the capacity of smallholder organizations, could all have an impact, the research finds.
FINDING SUSTAINABLE FINANCE
Most of the financing for major palm oil companies comes from FSPs based in Asian countries like Japan, Malaysia, Indonesia and Singapore. And on the whole, these do not employ adequate environmental, social and governance (ESG) policies, the research suggests.
“American- and European-based FSPs’ policies are more advanced, but even they don’t fully address how financial resources can be better channeled to smallholders,” says Pacheco.
He warns that there is the danger of a two-tier marketplace developing: one in Asia, where there is less consumer pressure for sustainable palm oil, and a second focusing on US and European markets that have adopted more sustainable practices.
INVESTING IN PEOPLE
Pacheco says the future of smallholders holds a real dilemma. If they become more integrated into the existing supply chain, more productive, use better practices and have access to good financing and markets, they are likely to become more and more dependent on supply chains and companies for their livelihoods.
“You want smallholders to improve system practices, their knowledge of fertilizers, harvesting and so on, but without losing their freedom,” says Pacheco.
It all comes down to how farmers are empowered to negotiate prices, conditions with companies and so on, he adds.
“For me, social empowerment is critical, and I think that needs to be included in the debate. Up to now, the focus has been on efficiency, sustainability, less impact on forests — and not enough attention has been given to empowering these important players, the smallholders, who are trying to reap as much benefit as possible in the market,” he concludes.
By Suzanna Dayne, originally published at CIFOR’s Forest News.
For more information on this topic, please contact Pablo Pacheco at p.pacheco@cgiar.org.
This research was conducted by CIFOR in partnership with Profundo, the International Center for Applied Finance and Economics (InterCafe) at the Bogor Agricultural University (IPB), the Netherlands Development Organization (SNV) and Financial Access (FA).
This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.
This research was supported by the United States Agency for International Development (USAID) through the project “The Role of Finance in Integrating Oil Palm Smallholders into Sustainable Supply Chains.”
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The global palm oil sector faces ongoing threats to sustainability caused by deforestation, peatland development, labor rights violations and land right conflicts. Additionally, integrating smallholders into sustainable palm oil supply chains continues to be a challenge for the industry. Financial service providers (FSPs) could play a role in stimulating sustainability commitments from the palm oil companies they finance. Their potential influence stems from their capacity to set environmental, social and governance (ESG) conditions for financial services.
This research shows that European and US FSPs are further along than their counterparts in Asia in adopting policies that include ESG risk assessments as part of the process for providing financial services. However, attention to smallholder inclusion is insufficient in the policies of all FSPs included in this report. Differences between European and US versus Asian FSPs in adopting ESG standards, as well as the unique markets they finance, present a risk that two parallel but separate financial systems could emerge. Efforts by both government and nongovernmental organizations should emphasize the prevention of a two-tiered marketplace with different quality requirements for palm oil.
All actors in this sector still require a significant shift in thinking on the benefits of including ESG standards in cultivation and production processes. In palm oil producing countries, the lack of specific banking regulations emphasizing sustainability concerns regarding the sector forms a further hindrance to positive developments.
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Authors: Kenney-Lazar, M.; Wong, G.
Key points
Geographic: Myanmar
Series: CIFOR Infobrief no. 154
Publisher: Center for International Forestry Research (CIFOR), Bogor, Indonesia
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Authors: Kenney-Lazar, M.; Wong, G.
Key points
Series: CIFOR Infobrief no. 153
Publisher: Center for International Forestry Research (CIFOR), Bogor, Indonesia
Publication Year: 2016
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The Global Landscapes Forum: The Investment Case in London on 6 June 2016 brought together experts from the financial services industry with leaders from the corporate sector, government and academia to take investments into sustainable landscapes to the next level. This second edition of the event offered a unique platform for experts to explore the role of private finance in enhancing livelihoods and landscapes across the globe.
The event was attended by experts such as Peter Holmgren, Director General of the Center for International Forestry Research (CIFOR), World Bank Lead Environmental Economist Paola Agostini, CEO of ADM Capital Christopher Botsford and Tropical Forest Alliance Director Marco Albani. In this video, they speak about the importance of connecting finance and sustainable landscapes at the Forum, which is a key event under the CGIAR Research Program on Forests, Trees and Agroforestry.
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Key messages
Source: CIFOR publications
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cifor |
Key messages
Source: CIFOR publications
