One of the greatest challenges of the 21st century will be finding a way to feed 10 billion people by 2050. Forest Trends seeks to transform current agricultural practices so this challenge can be met while forests and other ecosystems can be preserved.
Agriculture alone accounts for over 70 percent in tropical and sub-tropical countries. The majority of this deforestation is tied to the “big four” agricultural commodities – palm, soy, timber & pulp, and cattle – that pervade vast corporate supply chains and end up in virtually every aisle of the grocery store.
Deforestation posed by large-scale commercial agriculture comes with a laundry list of interconnected environmental and social problems, some specific instances of which are:
- In Myanmar, government-granted agribusiness concessions result not only in the widespread clearing of forests, but also force ethnic minority groups off of their lands, inflame old grievances that fuel armed conflict, and destroy critical wildlife habitat.
- In Brazil, the ongoing and well-documented pressures on the Amazon rainforest are compounded by emerging threats to the southeast, where the rapid clearance of the Cerrado region’s rainforests and savannahs to make way for agricultural expansion threatens to radically alter the water cycle.
- And in Ghana, the cocoa sector (itself a major driver of deforestation, historically) is acutely vulnerable to the altered temperatures and precipitation patterns brought about by climate change, endangering the livelihood of about six million Ghaians – 25 to 30 percent of the population.
Forest Trends is committed to addressing these and other challenges by accelerating the transition to more sustainable forms of agriculture:
We work on innovative mechanisms to finance sustainable agriculture on an industrial scale.
For a growing number of companies (currently almost 850) linked to the “big four” agricultural commodities, we track commitments, implementation policies, and progress information related to managing deforestation within their agricultural commodity supply chains.
We track market-based systems that protect water quality through trading and incentives to invest in watershed protection.
We help develop and promote a small-scale, community-driven “rainforest to table” model for agriculture and non-timber forest products that can save Latin American forests and benefit the people who call them home.
Finance & Markets for Agriculture
Improving the sustainability of agriculture requires transforming financial incentives for farmers and landowners, including scaling up the overall flows of finance toward both improved productivity and greater conservation.
Traditional financial systems fail to factor in the environmental costs of agriculture and often make sustainable practices costlier or unfeasible altogether. But that is slowly changing, thanks to forward-thinking financial institutions, governments, and companies.
At Forest Trends, we work to support and accelerate that change by:
Demonstrating that sustainable agriculture is a good investment
Investors channeled $2 billion into sustainable agriculture investments between 2004 and 2015, accounting for nearly a quarter of all nature-based “conservation investments” tracked in our research.
These banks, fund managers, corporations, and other investors aren’t simply being philanthropic; they’re looking for competitive, sensible additions to their portfolios – and they’re finding them. Six in 10 of the private investors we surveyed in 2016 expected to see returns of 5 to 15 percent from their investments in sustainable agriculture.
In order for this emerging asset class to continue gaining steam, transparent information is critical. Forest Trends is committed to filling that gap as demand for investable sustainable food opportunities continues to grow.
Finding innovative strategies to overcome finance hurdles
Forest Trends works in key tropical forest countries to find creative approaches that leverage public and private finance together to overcome existing obstacles to large-scale sustainable agriculture. [Read more]
In Ghana, for example, agriculture employs over half of Ghana’s population, but it’s under threat as climate change alters temperatures and precipitation patterns. The cocoa industry, which accounts for over a third of the country’s GDP, is particularly vulnerable. Working with a broad coalition, we’re looking for ways to make “climate-smart agriculture” practices less risky for cocoa farmers by increasing their access to credit and developing specialized insurance products. In doing so, we can turn what has historically been a major driver of environmental harm into a resilient and sustainable source of income for Ghanaian farmers.
And in Brazil, we’re finding ways to use international public funding through the UN program Reducing Emissions from Deforestation and Forest Degradation (REDD+) to help Brazil accelerate its transition to more productive and sustainable agriculture. Large-scale performance-based REDD+ payments can be used to unlock more favorable loans for landowners who practice good land stewardship, lower risks borne by the public banks which providing those loans, and attract private investment from food producers looking to meet sustainability goals.
In neighboring Peru, deforestation in the Amazon region accounts for over half of the entire country’s greenhouse gas (GHG) emissions. Together with partner organizations and the Peruvian government, we’re tackling key drivers of deforestation in the Amazon – supply chains built around coffee, cocoa, and oil palm – by implementing a “Production-Protection Compact” that simultaneously protects forests and benefits small-scale farmers. By making this sustainable development vision a reality, we can replace the vicious cycle of poverty, low productivity, and deforestation with one of prosperity, productive agriculture, and forest conservation – all while helping Peru meet its goal of reducing GHG emissions by 30%.
Showing how agricultural subsidies can be made “greener”
Governments around the world paid farmers and other private landholders nearly $10 billion in 2015 to reward them for good stewardship of lands critical to watershed health. Our research highlights that the traditional agricultural subsidy model can be successfully retrofitted for the green economies of the future – to focus on long-term landscape health as well as agricultural productivity.
Supply Chains for Agriculture
Unlocking conservation finance alone will not own ensure a successful transition to sustainable agriculture – not unless businesses on every continent take decisive and comprehensive action to remove environmental and social harms from their supply chains.
Fortunately, companies around the world and across the entire commodity value chain—producers, processors, traders, manufacturers, and retailers – are taking unprecedented action to clean up these supply chains. Often, they’re motivated by demands from stakeholders, from consumers to investors to local and national governments an increasing number of whom are no longer willing to tolerate business as usual.
Forest Trends created its Supply Change Initiative to provide freely available news, data, and analysis related to companies’ progress toward sustainable and deforestation-free supply chains. The online portal Supply-Change.org tracks supply chain commitments from hundreds of companies – from little-known producers and traders to consumer-facing brands – while comprehensive reports shine light on global trends, business developments, and ongoing challenges.
Are these companies succeeding in meeting their goals? Supply Change’s 2017 report analysis found that progress information is available for about half (51%) of the company commitments we tracked, compared with 36% of those tracked in its 2016 report. So, companies are entering new territory with these commitments and are making steady progress on developing ways to meet them.
Commitments that aren’t accompanied by transparent progress reporting run the risk of becoming “dormant,” leaving stakeholders in the dark about their status. Our research shows that public disclosure continues to lag, with one in five commitments being dormant – all while the number of ambitious new commitments multiplies.
As our research shows, there’s much more work to be done, but the good news is that change is happening. Along the way, Forest Trends and our partners will continue to track private sector progress in this context and also serve as a resource to companies as they work toward existing commitments and develop new ones. In the process, we’re empowering consumers, investors, governments, and others with the information necessary to hold companies accountable.
Legality & Governance for Agriculture
At least half of all tropical deforestation in the last decade has been for commercial agriculture to meet the rapidly growing global demand for food, fuel, and fiber. Much of this conversion of forests to agricultural land has been taking place in the context of complex, contradictory, and poorly implemented regulations governing forest areas and surrounding landscapes. Forest Trends calculates that nearly half of total tropical deforestation between 2000 and 2012 was due to illegal conversion for commercial agriculture – involving corruption in the issuance of licenses, illegal use of fire to clear forests, or unfair compensation to local communities.
Companies at every stage of the supply chain have been making ambitious public commitments to reduce the deforestation impacts of forest risk commodities they source. Measures like voluntary standards and certification schemes have raised the sustainability “ceiling,” but they are not enough.
Forest Trends works to raise the “floor” for what constitutes acceptable agricultural practices by devising better policies to govern forests. We do so by working with governments and policy makers to help them consider regulatory options which can support private sector commitments and which also mandate efforts to eliminate deforestation from supply chains.
Our Forest Policy, Trade, and Finance Initiative supports accountability and transparency in forested countries as they develop an overall agenda against deforestation. We work to better understand whether it is feasible to have demand-side trade policies that reduce importation of a broad range of commodities produced from illegal deforestation. We do this by seeking to:
- Establish a global norm that commodities produced on illegally cleared land should not be bought and sold in the open by respectable parties. Our research shows that such import legislation is already succeeding in Australia and the EU, UK, and the United States where it keeps illegally harvested wood off the market; such legislation could be adapted for agricultural commodities.
- Encourage political leaders and policy makers in forest nations to see illegal forest clearing for agriculture as a threat to their economies, people, and sovereignty; and support them in advancing a shared policy agenda to address the issue.
And on the private sector side, our Supply Change initiative tracks companies’ efforts to remove destructive agricultural practices from their commodity supply chains. By increasing access to transparent information, we help stakeholders – investors, businesses, governments, non-profits, and consumers – make informed decisions that can spur more businesses to act.