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Ministry of Agriculture and Rural Development Food and Agriculture Organisation of the United Nations PROJECT PROPOSAL CLIMATE SMART AGRICULTURE: CAPTURING THE SYNERGIES BETWEEN MITIGATION, ADAPTATION AND FOOD SECURITY LIST OF ABBREVIATIONS ACP AGAL ASWAp AU AUC AWG-LCA BH CAADP CCAFS CFS CGIAR ClimDev COMESA COP16 CSA DEVCO DFID DG EC EFD ESA ESAS ENRTP EU FAFA FAO FAO/RAF FAO/RAP FNDP FPMIS FSTP GCCA GCDT GCM GDPRD GHG GIS GDP ITF IFAD IFPRI IPCC LDCs LOA LSMS Africa, Caribbean and Pacific Livestock Information, Sector Analysis and Policy Branch (FAO) Agriculture Sector Wide Approach (Malawi) African Union African Union Commission Ad-hoc Working group on Long-term Cooperative Action under the Convention Budget Holder Comprehensive Africa Agriculture Development Programme Climate Change, Agriculture and Food Security (CGIAR) Committee on World Food Security Consultative Group for International Agricultural Research Climate for Development in Africa Common Market for Eastern and South Asia 16th Session of the Conference of the Parties (UNFCCC) Climate Smart Agriculture Development and Cooperation Directorate-General (EC) Department of International Development (United Kingdom) Directorate-General European Commission European Development Fund Agricultural Development Economics Division (FAO) Economics of Sustainable Agricultural Systems team of ESA (FAO) Thematic Programme for Environment and Sustainable Management of Natural Resources (EC) European Union Financial and Administrative Framework Agreement (EC) Food and Agriculture Organisation of the United Nations FAO Regional Office for Africa (Accra) FAO Regional Office for Asia and the Pacific (Bangkok) Fifth National Development Plan (Zambia) Field Programme Management Information System (FAO) Food Security Thematic Programme (EC) Global Climate Change Alliance Global Crop Diversity Trust General Circulation Model Global Donor Platform for Rural Development Greenhouse Gas Geographic Information System Gross Domestic Product Interdepartmental Task Force International Fund for Agricultural Development International Food Policy Research Institute Intergovernmental Panel on Climate Change Least-Developed Countries Letter of Agreement Living Standards Measurement Study LTU M&E MACO MAFS MARD MDG MEGS MGDS MICCA MLF MoA MoDPC MoU MPRS MRV NAFSIPs NAMA NAP NAPA NEPAD NGO NLTV NMTPF NRD NPC NSC OCE OED PES PRSPs REDD+ SIDA SBSTA UNDAF UNESCO UNFCCC WFP WOCAT Lead technical Unit Monitoring and Evaluation Ministry of Agriculture and Cooperatives (Zambia) Ministry of Agriculture and Food Security (Malawi) Ministry of Agriculture and Rural Development (Vietnam) Millennium Development Goal Malawi Economic Growth Strategy Malawi Growth and Development Strategy Mitigation of Climate Change in Agriculture (FAO Programme) Ministry of Livestock and Fisheries (Zambia) Ministry of Agriculture Ministry of Development Planning and Cooperation (Malawi) Memorandum of Understanding Malawi Poverty Reduction Strategy Measurement, Reporting and Verification National Agriculture and Food Security Investment Plans Nationally Appropriate Mitigation Action (UNFCCC) National Adaptation Plan (UNFCCC) National Adaptation Programme of Action (UNFCCC) New Partnership for Africa’s Development Non-governmental Organisation National Long-term Vision 2030 (Zambia) National Medium-Term Priority Framework Natural Resource Management and Environment Department (FAO) National Project Coordinator National Steering Committee (in each partner country of the project) Office of Corporate Communications and External Relations (FAO) Office of Evaluation (FAO) Payments for Environmental Services Poverty Reduction Strategy Papers Reduction Emissions from Deforestation and Forest Degradation, including conservation, sustainable of forests and enhancement of forest carbon stocks (UN) Swedish International Development Agency Subsidiary Body for Scientific and Technological Advice (UNFCCC) United Nations Development Assistance Framework United Nations Educational, Scientific and Cultural Organization United Nations Framework Convention on Climate Change World Food Programme World Overview of Conservation Approaches and Technologies TABLE OF CONTENT EXECUTIVE SUMMARY ......................................................................................................... 5 1. BACKGROUND .................................................................................................................. 9 1.1 General Context ............................................................................................................. 9 1.2 Sectoral Context ........................................................................................................... 11 1.2.1 Development Objectives ...................................................................................... 13 1.2.2 MDGs................................................................................................................... 13 1.2.3 UNDAF and NMTPF........................................................................................... 14 1.3 Relevant policies and legislation ................................................................................. 15 2. RATIONALE ..................................................................................................................... 15 2.1 Problems/Issues to be addressed .................................................................................. 15 2.2 Stakeholders and Target Beneficiaries ........................................................................ 17 2.2.1 Direct Beneficiaries ............................................................................................. 17 2.2.2 Final Beneficiaries ............................................................................................... 17 2.3 Project Justification...................................................................................................... 17 3. PROJECT FRAMEWORK .............................................................................................. 20 3.1 3.2 3.4 3.5 4. Impact .......................................................................................................................... 20 Outcome and Outputs .................................................................................................. 20 Sustainability ............................................................................................................... 25 Risks and Assumptions ................................................................................................ 27 IMPLEMENTATION AND MANAGEMENT ARRANGEMENTS ........................... 30 4.1 Institutional Framework and Coordination .................................................................. 30 4.2 Strategy/Methodology ................................................................................................. 31 4.3 Inputs ........................................................................................................................... 32 4.3.1 FAO Inputs .......................................................................................................... 32 4.3.2 Government Inputs .............................................................................................. 32 4.3.3 Donor Inputs ........................................................................................................ 33 4.4 Technical Support/Linkages ........................................................................................ 33 4.5 Management and Operational Support Arrangements................................................. 33 5. BUDGET OF EACH PARTNER COUNTRY ................................................................ 34 6. MOTIVATION, PROJECT ACTIVITIES AND BUDGET FOR VIETNAM............35 EXECUTIVE SUMMARY Background While climate change has become one of the defining contemporary international development issues, far less attention has been given to food security and climate change at the international level. Yet, these challenges are increasingly seen as being interdependent, shaped by a confluence of different pressures that converge within the agriculture sector: population size and commensurate food demand are increasing; competition for food, land, water, energy, as well as carbon storage, is intensifying; degradation of natural resources is expanding; and solutions for climate change are becoming more urgent. This has led to the recognition that these challenges must be addressed together, rather than in isolation from each other. Yet, policies have often remained unaligned and institutional/financing arrangements fragmented. Agriculture has so far not figured prominently in the ongoing climate change negotiations and to date climate change has also received scant attention within the Committee on World Food Security (CFS). This dichotomy between food security and climate change at the international level tends to be mirrored at national level. In December 2010, at the 16th Session of the Conference of the Parties (COP16) of the United Nations Framework Convention on Climate Change (UNFCCC), the draft text on agriculture was not incorporated into the Cancun Agreements. The Cancun Agreements outlined in a very general way a number of steps that are to enhance adaptation and mitigation. How countries might move from an international agreement to national implementation with regard to agriculture is still not clear in the absence of clear guidelines, policies and frameworks for early action. At the same time, the design of international enabling mechanisms needs to be informed by realities on the ground and the specificities of agriculture in the context of climate change. Meeting food security and climate change challenges from agriculture, as populations, climate change impacts and emissions from agriculture increase, will ultimately require transformation of agricultural production systems. However there are knowledge gaps which limit transition. Enabling farmers to make more climate-smart choices requires a better understanding of which agricultural practices would be most promising in this regard, within specific agro-ecological regions. It would also require a better understanding of the constraints to farmer adoption of such practices. A holistic approach to the multiple objectives involved requires better alignment of policies, as well as greater cooperation and coordination across national enabling means and action. It also requires that national level experiences are fed into the design of enabling mechanisms at the international level to ensure the necessary flexibility for different country circumstances and sectors. National climate-smart agricultural strategies or roadmaps could be beneficial in guiding nationally-led action and providing a basis for mobilizing international support. Climate Smart Agriculture (CSA) addresses the challenges of building synergies among climate change mitigation, adaptation and food security that are closely related within agriculture and minimizing their potential negative trade-offs. It seeks to enhance the capacity of the agricultural sector to sustainably support food security, incorporating the need for adaptation and the potential for mitigation into development strategies. There is no blueprint 5 for climate smart agriculture and the specific contexts of countries and communities would need to shape how it is ultimately implemented. Some types of agricultural practices generate synergies between mitigation, adaptation and food security – such as conservation agriculture, which increases soil carbon sequestration as well as water holding capacity, thereby contributing to drought resilience and minimizing damage from flooding. In other cases there are tradeoffs: e.g. conversion of forested lands to agricultural use. Countries with a large share of their population engaged in agricultural production and high rates of food insecurity are often obliged to make urgent and difficult policy choices on their agricultural growth strategies based on insufficient evidence. The proposed Project is clearly extremely timely and could be supportive of: (i) national efforts on CSA in developing countries, in the context of the Comprehensive Africa Agriculture Development Programme of The New Partnership for Africa’s Development (CAADP/NEPAD) or other national sectoral plans, National Adaptation Plans (NAPs) or Nationally Appropriate Mitigation Actions (NAMAs); and (ii) the generation of knowledge and experience that could be fed back into the UNFCCC process, especially for the design of enabling mechanisms that are currently under development. Impact, Outcome and outputs The proposed Project is fully in line with national development objectives, agriculture sector policy, relevant regional programmes i.e. CAADP/NEPAD and emerging climate policy and directives. It promotes achievement of Millennium Development Goals (MDGs) 1 and 7, the ultimate aim of the UNFCCC, the target of the World Food Summit, priorities of One-UN, embodied in country-level United Nations Development Assistance Frameworks (UNDAFs), and FAO National Medium-Term Priority Frameworks (NMTPFs). The project is also fully in line with the EU food security policy. The expected long-term impact of the Project is to contribute to the achievement of MDG1: Eradicate Extreme Poverty and Hunger; and MDG7: Ensure Environmental Sustainability. The expected outcome of the Project is that capacities of the three partner countries to undertake, and access financing for, CSA is increased. The following outputs are expected to be delivered through the Project: 1. An evidence base for identifying, developing and implementing practices, policies and investments for climate smart agriculture is built in the three partner countries. 2. Country-owned strategic frameworks for climate smart agricultural activities are formulated. 3. Climate smart agriculture investment proposals are formulated and possible financing, including from climate finance, is identified. 4. Capacity for evidence-based planning, implementing and financing climate smart agriculture is built in the three partner countries. 6 Implementation arrangements The Project institutional structure will consist of: a Project Team within the Lead Technical Unit/Agricultural Development Economics Division (LTU/ESA) at FAO headquarters; Country Project Coordinators in each partner country; and research and policy institutions in each partner country. The Project Team will be under the overall supervision of the ESA Economics and Policy Support for CSA Team Leader. The organizational structure and proposed Project Team reflect the three major components of the action: research, policy and institutional strengthening. Aside from the core Project Management/Technical Team described above, additional Project Team consultants for Coordination, Geographic Information System (GIS) and Investment/Financing are also foreseen. The policy component would use external consultants for the review of policy instruments and facilitated dialogue across ministries. Preparation of strategic frameworks for action and investment proposals would be nationally led and internationally supported. Close working arrangements with national staff and institutions would be the rule of thumb, because of its very nature of policy development and capacity building, in order to strengthen capacities for continuity and sustainability of action beyond the lifetime of the proposed Project. The Project Team will establish an Interdepartmental Task Force (ITF) at FAO headquarters involving relevant FAO Units and have regular meetings to review work plans and thematic reports and documents as required, monitor and provide guidance to the Project. The Project Team will recruit an experienced Senior Economist, Food Security and Climate Change, to lead the Project research work and a Senior Expert on Climate Change and Agricultural Policy Development. These two senior staff members will work with partner country institutions and Country Project Coordinators to develop the research and policy components of the Project and oversee their implementation. The Project will recruit a Project Technical Coordinator (P-4) as well as an Operational and Administrative Coordinator (P1) to support the Project Team. The LTU will assign a junior staff Economist (P3) to support the research component of the Project. The Project Team will be responsible for the overall coordination of the Project with FAO regional, subregional and national offices, as well as across relevant units within FAO headquarters and external partners. In each of the partner countries, the Ministry of Agriculture (MoA) is the main policy partner for the Project, with close linkages to other relevant ministries (i.e. of Environment, Development Planning and Finance). In Malawi this is the Ministry of Agriculture and Food Security (MAFS), in Zambia the Ministry of Agriculture and Cooperatives (MACO) as well as the Ministry of Livestock and Fisheries (MLF), and in Vietnam the Ministry of Agriculture and Rural Development (MARD). In each case, the partner country will designate a department and staff person to be the focal point for the Project. In addition, each country will have a research partner institution. These may include, for example, Bunda or Chancellor College in Malawi, University of Zambia or Copperbelt University in Zambia, and an agriculture research institute in Vietnam. Selection of the research partner institution will be done in consultation with the country policy partners. The Project will recruit a Country Project Coordinator for each partner country. This staff person may be placed in the incountry FAO representation or in one of the country partner institutions. Final placement will be decided upon in consultation with country policy partners and FAO country representations. 7 The methodology for implementation is based on the notion of first establishing an evidence base for climate smart practices and adoption constraints, which would involve assembling both existing data and, where necessary, collecting targeted new data. This data would inform the: (i) identification of promising practices and adoption constraints, as well as policy formulation to overcome these constraints; (ii) preparation of a strategic framework or roadmap of prioritized and costed actions; and (iii) development of investment proposals and the identification of their financing, in the context of the strategic framework. The reason for using such a methodology is to enable policy and strategy formulation to be based on country/agro-ecological, regional-specific data. The methodology fully recognizes that national action is not starting from zero and can build upon ongoing activities at country level. It also fully recognizes the importance of and benefits that accrue from nationally led and owned efforts in the context of the proposed action. For the implementation of this three-year Project, the European Commission has granted EUR 3 300 000. FAO will make a co-funding contribution of approximately EUR 2 million over the life of the Project, through the provision of staff time, offices, equipment and the use of FAO representations in-country. Partner countries have committed their support through the provision of political support and commitment to the Project objectives, participation of national policy and research staff in Project activities and the provision of office space for the Project in country. Local contribution will be around 10% of the project’s budget. 8 1. 1.1 BACKGROUND General Context In recent decades support for agriculture declined despite its key role in food security, development and management of natural resources in a large number of developing countries with agriculture-based economies. The share of agriculture in Official Development Assistance (ODA) declined from 19 percent in 1980 to 3 percent in 2006. It was about 6 percent in 2009 and is now gradually increasing. Developing country budget allocations to agriculture have been well-below the sector’s share of the Gross Domestic Product (GDP) in many agriculture-based economies. Public financing for agriculture has tended to reflect the sector’s position within the international agenda. Food price volatility, famine in the Horn of Africa, more frequent and intense extreme climate events and increasingly worrisome predictions for slow onset climatic changes have now pushed food security and climate change to the top of the international agenda. While climate change has become one of the defining contemporary international development issues, far less attention has been given to food security and climate change at the international level. Yet, these challenges are increasingly seen as being interdependent, shaped by a confluence of different pressures that converge within the agriculture sector: population size and commensurate food demand are increasing; competition for food, land, water, energy, as well as carbon storage, is intensifying; degradation of natural resources is expanding; and solutions for climate change are becoming more urgent. This has led to the recognition that these challenges must be addressed together, rather than in isolation from each other. Yet, policies have often remained unaligned and institutional/financing arrangements fragmented. Agriculture has so far not figured prominently in the ongoing climate change negotiations and to date, climate change has also received scant attention within the CFS. This dichotomy between food security and climate change at the international level tends to be mirrored at national level. At the UNFCCC COP16 in December 2010, the draft text on agriculture was not incorporated into the Cancun Agreements. Agriculture, however, already figured prominently in National Adaptation Programmes of Action (NAPAs) formulated by Least-Developed Countries (LDCs). NAPAs are now to inform new NAPs which, in accordance with the Cancun Agreements, are to be prepared by developing countries.1 Also, following COP15, a number of developing countries indicated their intention to undertake NAMAs related to agriculture. At the most recent session of the UNFCCC Climate Talks, a proposal by New Zealand and Canada to include agriculture on the agenda of the Subsidiary Body for Scientific and Technological Advice (SBSTA) was not approved. Agriculture, however, has now returned to 1 FCCC/CP/2010/7/Add.11/CP.16 , para. 16. 9 the agenda of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA) in the Cooperative sectoral approaches and sector-specific actions agenda item, to enhance the implementation of Article 4, Paragraph 1(c), of the Convention. Article 2 of the UNFCCC2 would seem to acknowledge that in establishing a time frame for addressing climate change economic development, ecosystem resilience and food production (all of which relate to agriculture in a large number of developing countries) would need to be taken into account. The Cancun Agreements outlined in a very general way a number of steps that are to enhance adaptation and mitigation. How countries might move from an international agreement to national implementation with regard to climate smart agriculture is still not clear in the absence of clear guidelines, policies and frameworks for early action. At the same time, the design of international enabling mechanisms needs to be informed by realities on the ground and the specificities of agriculture in the context of climate change. Only very recently have there been some steps to address food security and climate change challenges together at the global level and FAO has figured prominently in these. FAO held a high level Conference in 2008 on food security, climate change and bioenegy. It prepared a publication on Climate Smart Agriculture for The Hague Conference on Agriculture, Food Security and Climate Change in 2010, following from its publication Food Security and Agricultural Mitigation in Developing Countries: Options for Capturing Synergies, prepared for COP15 in 2009 in Copenhagen. In 2012, the CFS will consider a report on the interface between food security and climate change. The Consultative Group for International Agricultural Research (CGIAR) has created a new research programme on Climate Change, Agriculture and Food Security (CCAFS), which is cooperating closely with FAO, including through its programmes on agricultural mitigation and adaptation. The present Project proposal has been shared with CCAFS and it has been agreed that data and lessons learned on methodologies will be exchanged. At regional level, Africa has been particularly active given its dependence on agriculture in meeting its development and food security goals and in view of the Intergovernmental Panel on Climate Change (IPCC) prediction that Africa will be the region most affected by climate change. At the request of African leaders, meeting at the thirteenth Summit of the African Union (AU), held in Sirte, Libya in 2009, an African Union Commission (AUC)-NEPAD Agriculture-Climate Change Framework3 was been prepared. Consideration is now being given to the creation, at continental level, of an Investment Platform for African Climate Smart Agriculture, which would help to make the Framework operational through mainstreaming CSA into CAADP National Agriculture and Food Security Investment Plans (NA&FSIPs). FAO staff involved in the preparation of this Project proposal is also collaborating with the World Bank in supporting NEPAD with this initiative. The use of the CAADP framework means that the main vehicle for action is both continentally and nationally owned and that parallel processes or additional financing mechanisms are not created (in line with African Union partnership and aid effectiveness principles). The Project proposal will explore with partner countries how to situate the proposed Project within the CAADP/NEPAD process. “...stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system… should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.” 3 AUC-NEPAD Agriculture Climate Change Adaptation-Mitigation Framework. 2 10 The submission by Common Market for Eastern and Southern Africa (COMESA) Heads of State, which was endorsed at the AU Summit in 2009, called for a joint African position on climate change that considers agriculture, forestry and land-use change as part of the solution to Greenhouse Gas (GHG) mitigation as well as food security, for which adaptation will be crucial. The African Communiqué from the Conference on Agriculture, Food Security and Climate Change in Ethiopia in September 2010 called for developed countries to support piloting and scaling up of programmes to support CSA and food security.4 European Union (EU) policy recognizes the links between climate change and food security. The ‘EU Policy Framework to support Developing Countries addressing Food Security Challenges’5, highlights the importance of strengthening the adaptation of farming systems to climate change and of building on the synergies between adaptation, mitigation and sustainable development. The European Commission (EC) recognizes the leading role of the Rome-based agencies – FAO, International Fund for Agricultural Development (IFAD) and World Food Programme (WFP). A Statement of Intent of programmatic cooperation on food security and nutrition was signed with them on 27/06/2011. ‘Climate Smart Agriculture’ is entirely consistent with the programmatic area ‘adaptation to and mitigation of climate change for food security’ described in this document. Close cooperation with IFAD and WFP is contemplated in the context of the Project. There is a shared commitment by Europe and developing countries to address the global challenges of climate change and food security and recognition of the crucial role of agriculture in addressing them both. In view of the general context outlined above, the proposed Project is clearly extremely timely and could be supportive of: (i) national efforts to initiate early action on climate smart agriculture in developing countries, in the context of CAADP or other sectoral plans, NAPs or NAMAs; and (ii) the generation of knowledge and experience that could be fed back into the UNFCCC process, especially for the design of enabling mechanisms that are currently under development. The Project will work closely with ongoing FAO, international, regional and national initiatives to assist the three partner countries to address constraints and promote “Climate Smart Agriculture” that will deliver both food security and improved livelihoods (both dependent on adaptation), as well as a global public good in the form of avoided GHG emissions. 1.2 Sectoral Context In developing countries, agricultural growth is urgently required to support the food security of growing populations. FAO has estimated that agriculture production needs to increase globally 70 percent to meet a Projected population of more than 9 billion by 2050 and that the largest increase in demand will be in developing countries. However, the adverse impacts of climate change will increase the difficulty of obtaining needed agricultural growth. Agriculture is perhaps the most climate sensitive sector, with output directly affected by even slight climatic variability, not to mention the more frequent and intense extreme climate events already being experienced. Slow onset changes in temperatures and precipitation are 4 5 FAO-COORD 2010-108. Communication to EU Council, 1st October 2010. Communication from the Commission to the Council and the European Parliament COM(2010)127final of 31.13.2010 endorsed by the European Council in its Conclusions of 10.05.2010 11 expected to affect seriously food security, in the absence of adequate adaptation and mitigation efforts. It is usually the rural poor, who depend directly on agriculture for their livelihoods and food, who suffer disproportionately from climate change impacts. Increasing the resilience of agricultural systems to climate change is thus imperative for their adaptation to climate change. At the same time, agriculture accounts for around 12-14 percent of global greenhouse gas emissions. If land-use changes, including deforestation, are considered (agriculture is a main driver of deforestation and draining of wetlands), its share becomes around 30 percent. 70 percent of the technical mitigation potential of agriculture is in developing countries and more than 75 percent of this potential could come from sequestering carbon in agricultural soils. Although low in absolute terms, rates of GHG emissions from agriculture in developing countries are growing due to increases in demand for agricultural produce, as well as the need of developing countries to meet their own food security and development goals. Meeting increasing demand for food, fuel, fiber and carbon storage from agriculture, as populations, climate change impacts and emissions from agriculture increase, will ultimately require transformation of agricultural production systems. However there are knowledge gaps which limit transition. Enabling farmers to make more climate-smart choices requires a better understanding of which agricultural practices would be most promising in this regard, within specific agro-ecological regions. It would also require a better understanding of the constraints to farmer adoption of such practices. “Climate Smart Agriculture” addresses the challenges of building synergies among climate change mitigation, adaptation and food security that are closely related within agriculture and minimizing their potential negative trade-offs. It seeks to enhance the capacity of the agricultural sector to sustainably support food security, incorporating the need for adaptation and the potential for mitigation into development strategies. There is no blueprint for climate smart agriculture and the specific contexts of countries and communities would need to shape how it is ultimately implemented. The specific conditions, circumstances, and capacities within countries will define opportunities and barriers to implementation, and hence policy choices. Countries are also not starting from zero and ongoing initiatives and activities can be used (e.g. conservation agriculture, sustainable land management). Some types of agricultural practices generate synergies between mitigation, adaptation and food security – such as conservation agriculture that increases soil carbon sequestration as well as water holding capacity that contributes to drought and flood resilience. In other cases there are tradeoffs: e.g. conversion of forested lands to agriculture use. Countries with a large share of their population engaged in agricultural production and high rates of food insecurity are often obliged to make urgent and difficult policy choices on their agricultural growth strategies based on insufficient evidence. Transformation of agricultural production and food systems to meet increasing demand from an additional 3 million people in 2050, changing dietary habits and the continuing need for more sustainable use of natural resources provides an opportunity to also consider how climate change adaptation and mitigation might also be addressed through some of the same practices. 12 1.2.1 Development Objectives To ensure consistency with nationally-owned development, climate and sectoral plans, planning documents of the three partner countries have been reviewed. The two African partner countries have important agriculture sectors (sizeable portion of GDP, exports, livelihoods) and food security continues to be an important priority for them. Vietnam has gone from being a rice importing country to a rice exporting country but pockets of poverty and undernourishment remain. The impacts of climate variability and change on the agriculture sector of all three countries are expected to affect negatively food security and development over the medium and long-term. While current Government development planning documents reflect the importance of agriculture and food security, less attention has been given to the close linkages between climate change and food security in the agriculture sector. Similarly, climate change policy often does not consider agriculture in the context of both mitigation and adaptation. The Project will support partner countries in bridging this disconnect, including through facilitation of greater cooperation and coordination across ministries of agriculture, environment and finance and better aligned policies. The Malawi Growth and Development Strategy (MGDS) 2006-2011 builds on the Malawi Economic Growth Strategy (MEGS) and incorporates lessons from the implementation of the Malawi Poverty Reduction Strategy (MPRS). Food Security and Agriculture, Irrigation and Water Management and Rural Development are among the priorities. The Vietnam Five-Year Socio-Economic Development Plan (2011-2015) was formulated in the context of its longer-term Strategy for Socio-Economic Development (2011-2020). While industrialization, entry into the international economy and becoming a middle income country are the main priorities, ending hunger and agricultural production (16-18 percent of GDP) remain important components. The Zambian Fifth National Development Plan (FNDP) is linked with the National LongTerm Vision 2030 (NLTV) and sectoral plans. The Development Plan focuses on agricultural development as the engine of income expansion in the economy and it is recognized that agriculture offers the best opportunities for improving livelihoods. To this end, the sector has received a marginally higher allocation of the resources. The overall objective for the agricultural sector, as set out in the National Agricultural Policy (NAP) of Zambia, is “to ensure food security and income generation at household and national levels and maximize the sector’s contribution to gross domestic product (GDP).” The NAP recognizes that that successful planning and implementation of many of the programmes require well-functioning linkages with and close coordination among various ministries and sector specific institutions and that many multisectoral programmes cannot be implemented by MACO alone. The Project directly responds to the priorities of the FNDP and the NAP, including through supporting the Government to formulate better aligned policies and coordinate action across institutions that can address the threat of climate change to agriculture and consequently food security and poverty reduction goals. 1.2.2 MDGs The long-term impact of the proposed Project is envisaged as contributing to the achievement of Millennium Development Goals 1 Eradicate Extreme Poverty and Hunger and 7 Ensure Environmental Sustainability, as well as to the ultimate aim of the United Nations Framework 13 Convention on Climate Change, contained in its Article 2: “... stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system… should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.” MDG 1 was based on the FAO/World Food Summit goal of halving the number of food insecure by 2015. FAO also has a long-standing relationship with the UNFCCC, due to agriculture’s dependence on climate and the Organization’s expertise and experience on climate-agriculture interfaces, including agrometeorology. FAO staff has previously been, and currently are, lead authors for the IPCC assessment reports. The Project is well-situated to contribute to these international goals, which have been tailored by a number of countries to national contexts. 1.2.3 UNDAF and NMTPF The focus of the proposed Project is in line with the priorities of the UNDAFs/One UN and NMTPFs in partner countries. The UNDAF 2008-2011 of Malawi has as its first cluster theme “Sustainable economic development and food security.” FAO is taking the lead for this theme at national level. The UNDAF Outcome for this theme is “By 2011 Government policies and local and national institutions effectively support equitable economic growth and the achievement of food and nutrition security while minimizing or reversing environmental degradation.” It is also noteworthy that MDG 1 and 7 are cited in connection with this outcome. The Project proposal will contribute to this theme and its outcome, through better evidence-based policy formulation and through facilitating better policy alignment and institutional coordination across relevant ministries. FAO and the Ministry of Agriculture and Food Security have initiated dialogue on the National Medium-Term Priority Framework (NMTPF) for Malawi. Goals and objectives of the last UNDAF for Vietnam (2001-2005) included eliminating food insecurity and reducing malnutrition under goals “Basic Needs” and “Rural Development”. The One Plan (2006-2010) has replaced the UNDAF, and FAO is co-chairing the Programme Coordination Group on Sustainable Development (PCG-8) with the United Nations Educational, Scientific and Cultural Organization (UNESCO). The One Plan for 2012-2016 (OP3) was signed by the Government of Vietnam and the United Nations in March 2012. It is the common programmatic framework for UN agencies in Vietnam. The One Plan sets out a strategic and focussed joint programme of work wich will support Vietnam in addressing its development priorities over the next five years. This includes supporting the Government to achieve inclusive, equitable and sustainable growth. FAO and the Ministry of Agriculture and Rural Development have formulated the Country Programming Framework in Vietnam for the period 2012-2016 on the basis of OP3. The Project is relevant through its examination of how to manage synergies and trade-offs that cut across agriculture, food security and climate change. The UNDAF for Zambia (2011-2015) includes in its Outcome 2 “to contribute effectively to increased access to sustainable livelihoods and food security in both rural and urban areas. Outcome 4 aims to achieve the development of institutional capacities to effectively sustain, manage and protect livelihoods from the risks of climate change, disasters and environmental degradation. Both Outcomes relate directly to the Project proposal.The NMTPF for Zambia covers the period from 2009 to 2013. The FAO country programme has four major priorities: 14 policy reform for agricultural transformation; sustainable natural resource and environmental management; support to highly vulnerable households, agricultural information and knowledge management systems. The Project is relevant for all four priorities. 1.3 Relevant policies and legislation All three countries are taking steps towards climate smart agriculture, which brings agriculture and climate change agenda together. Agriculture already figures prominently in the National Adaptation Programmes for Action prepared by Malawi and Zambia. As climate change could potentially reverse the substantial economic progress made by agriculture in Vietnam, the Government has created a National Target Program to Respond to Climate Change, and MARD recently issued a decision to promulgate an action plan for the climate change response of the agriculture and rural development sector for 2011-2015 and programme of green house gas emissions reduction in the agriculture and rural development sector up to 2020. The Government has also issued a directive on Mainstreaming of Climate Change into Development, Implementation of Strategies, Long and Short-term Plans, Projects on Agriculture and Rural Development in the Period 2011-2015. The FAO-EC climate smart Project will support the MARD in these national policy efforts. Vietnam will also organize a 2nd global conference on implementation of action road map on “agriculture, food security and climate change” in Vietnam in the year 2012. This conference follows the Hague Conference on the same issues held in 2010. In Malawi, the Ministry of Development Planning and Cooperation (MoDPC) has been tasked with coordinating all climate change related activities, Projects and investments, through the national Climate Change Initiative. The same Ministry also houses a Climate Change Steering Committee and a Working Group composed of ministry staff and development partners. However, a number of donors are working separately with line ministries. Malawi has recently signed a CAADP Compact and completed its related National Agriculture and Food Security Investment Plan. It also formulated an Agriculture Sector Wide Approach (ASWAp) in September 2010. The ASWAp is consistent with the MGDS and with the four pillars of the CAADP. The proposed Project will contribute to focus areas and pillars of these nationallyowned instruments, namely food security and risk management, as well as sustainable land and water management, and institutional strengthening and capacity building. Zambia is currently finalizing a new agricultural policy document and its CAADP/NA&FSIP. Climate change will be incorporated into the Investment Plan. A National Climate Change Resilience Strategy has recently been formulated, as well as the National Joint Programme document for Reducing Emissions from Deforestation and forest Degradation (REDD+) which includes the role of conservation, sustainable management of forests and enhancement of forest carbon stocks. 2. 2.1 RATIONALE Problems/Issues to be addressed Agricultural systems in developing countries will need to adapt to climate change to ensure food security and development for growing populations. These systems could also contribute to reducing and sequestering GHG emissions, where this does not interfere with adaptation and continuing enhancement of agricultural productivity. A business-as-usual approach will 15 not suffice and a climate-smart approach may enable countries to maximize benefits and minimize trade-offs across these various objectives. The proposed Project will address these broader challenges in the three partner countries by focusing on capacity building to address the following specific problems/issues: (i) Knowledge/data gaps: The knowledge base for making strategic choices about climate smart agriculture is often nonexistent or weak, particularly given that these choices vary by specific agro-ecological and farming systems. Climate change, by increasing uncertainty and the need for rapid and accurate response, augments the necessity for timely and accurate spatial and scale-relevant information.6 Countries with a large share of their population engaged in agricultural production, high rates of food insecurity and poverty, and adverse impacts from extreme climate events are often obliged to take urgent and difficult policy decisions based on insufficient evidence. Narrowing knowledge and data gaps through use of existing data and the targeted collection, analysis, and modelling of new information and data can be an important step in allowing practices, policies, and strategies to be informed by the best possible evidence that is relevant to specific country contexts. The access to data can increase the capacity of farmers and agricultural planners to take decisions and allocate resources effectively to reduce risks. A better understanding of farmer decision-making in adoption of practices and technologies (possibly based on risk aversion, low investment capacity, tenure security, or social customs) and the introduction of new information dissemination technologies could also be useful in the design of policies to facilitate adoption. (ii) Fragmentation of policy, institutions and financing: Despite recognition that the challenges of food security and climate change are closely linked within the agriculture sector,7 policy, institutional arrangements, and funding channels for climate change, food security, and rural development are poorly coordinated at international, and, in many cases, national levels. It is noteworthy that while adaptation and mitigation mechanisms are separate under the UNFCCC, there are agricultural practices which can contribute to both. This may inhibit rewarding measures which may have double or triple wins. The holistic approach of climate smart agriculture to multiple objectives requires better alignment of policies, as well as greater cooperation and coordination across national enabling means and action. It also requires that national level experiences be fed into the design of enabling mechanisms at the international level to ensure the necessary flexibility for different circumstances and sectors. (iii) The absence of national climate-smart strategies that can guide nationally-led action and provide a basis for mobilizing international support: Negotiating text on agriculture was not retained in the Cancun Agreements. This has not encouraged formulation of new, or identification of existing, strategies that could guide nationally-led action and related investment proposals linked to international support, including climate financing, for climate smart agriculture. Unlike its fellow land-based activity REDD+, CSA has not enjoyed widespread attention and support, despite the importance of agricultural adaptation to food security (at a time of high food price volatility and growing awareness of the linkages between food insecurity and conflict), as well as the high potential for carbon sequestration in agricultural soils and through avoided conversion of forests and wetlands to agriculture. 6 FAO. 2010. “Climate-Smart” Agriculture: Policies, Practices and Financing for Food Security, Adaptation and Mitigation. 7 FAO. 2009. Food Security and Agricultural Mitigation in Developing Countries: Options for Capturing Synergies. 16 2.2 Stakeholders and Target Beneficiaries Participation of stakeholders is viewed as crucial to the success of the action in terms of building confidence, capacity and leadership to implement, on a sustainable basis, climatesmart agricultural practices and policies at country level. Capacity building is viewed as a cross-cutting objective relating to all components of the proposed Project. 2.2.1 Direct Beneficiaries The direct beneficiaries will be stakeholders involved in the research and policy components of the proposed Project, including: (1) policymakers, e.g. staff in ministries of agriculture, environment and finance, as well as UNFCCC focal points; (2) climate change negotiators; (3) universities, agricultural research; (4) extension workers; and (5) Farmers’ Unions. Staff of relevant ministries are identified as a target group for activities relating to policy alignment (review of existing policy instruments, interministerial dialogue on building greater policy integration), formulation of policies overcoming constraints on adoption of climate smart agricultural practices and formulation of a roadmap or a similar strategic document and eventually costed investment proposals, based on roadmaps/strategies). The capacity of extension workers and Farmers’ Unions would be built for the dissemination and facilitation of uptake of climate smart agricultural practices, relevant for country-specific agroecological regions, identified in the research component. For the research component, national institutions, both universities and agricultural research institutes, are envisaged as key actors for this component. Institutional beneficiaries would include: ministries of agriculture, environment, development planning and finance; extension arrangements, both formal and informal; Farmers’ Unions, universities and agricultural research institutes. 2.2.2 Final Beneficiaries There are two sets of ultimate beneficiaries. Firstly the citizens of these countries, particularly the rural poor at household and community levels, who may benefit from potential up-scaling, as compared with a business as usual scenario, as well as from eventual incentive systems and potential direct investment in sustainable agricultural intensification. Secondly the global community will benefit from a net reduction in GHG emissions resulting from investments promoted by the Project. 2.3 Project Justification All countries, including the three target countries in this proposal, are now confronted with uncertain changes in climate, meaning that adaptation to changes that cannot be avoided are imperative to realize the Millennium Development Goals 1 and 7. In the case of Zambia, under-nutrition was estimated to be 43 percent in 2005/2007.8 Yields for maize and cassava – the two most important staple crops in Zambia – remained stagnant through the 1990’s and into the 2000’s. Recent increases in fertilizer and seed subsidy packages have led to increases, e.g. increases in maize yields from about 1.2 tonnes per 8 FAO. 2010. State of Food Insecurity in the World 2010. Rome: Food and Agriculture Organization. NB: This source was also used for under-nutrition estimates of Malawi and Viet Nam. 17 hectare for smallholders to over 2 tonnes per hectare.9 But, these welcomed yield increases still leave smallholder yield production lower than similar smallholders in Latin America and Asia. And though higher quality seeds and access to fertilizer leads to yield increases, improved land management not only leads to greater yields, but to less variability in the face of climate events. Nutrient mining, soil erosion and poor water management have been identified as limiting factors in Zambia (see Footnote 5); though FAO measures of land degradation show that only 10 percent of land is either severely or very severely degraded.10 Zambia, however, also has one of the world’s highest deforestation rates, at nearly 16 percent over the period 1990-2005.11 The combination of high food insecurity, relatively low yields, high deforestation and localized land degradation leave Zambia vulnerable to climate change. According to recent estimates, it is expected that Zambia will face higher temperatures, shortened growing seasons, and increased frequency of severe climate events; Thurlow et al model these potential changes and predict substantial increases in food insecurity, particularly in the southern and central regions.12 Additionally, Jones and Thornton (2003) estimate that by 2055, maize yields will decline in Zambia and that variability of yields will increase perhaps dramatically. Tadross et al (2009) provide evidence that the growing season is starting later and getting shorter in many regions, particularly the southern region which is already often close to the critical threshold of planting days required for maize; the authors also note that these observations are consistent with a downscaled General Circulation Model (GCM) predictions, though there is still a great deal of uncertainty surrounding those predictions. 13 Malawi presents a similar story. Under-nutrition rates are lower but still high at 28 percent, and deforestation rates are very high at 14.5 percent over the period 1990-2005, though only 6 percent of land is currently categorized as being either severely or very severely degraded. Compared with Zambia, natural resources per capita (arable land, forests, etc.) in Malawi are far lower, and resource scarcity is particularly severe in the southern region where rural population densities are already quite high. Overall, rural population densities per square kilometer are 465 versus just 135 in Zambia. Like Zambia, Malawi already faces an “adaptation deficit”, and is vulnerable to any future climate changes. Jones and Thornton (2003) estimate that Malawi will face lower maize yields due to higher temperatures in the long run, though they do not predict the same increase in variability as in Zambia. 14 Tadross et al (2009) show that duration of dry spells and, concurrently, reduction in rain days has also occurred over much of Malawi already. Even more so than Zambia, Malawi has dramatically increased fertilizer and maize seed subsidies, which has led to higher maize yields; but, maize is more vulnerable to climate fluctuations than other crops, such as cassava, so that these gains may also be reversed if not accompanied by sustainable land use practices and investments to increase system resilience. More efficient use of fertilizers could also contribute to a reduction of nitrous oxide 9 Weber, M.T. 2008. Empirical Information on Smallholder Maize Production in Zambia. The paper can be accessed at: http://www.aec.msu.edu/fs2/zambia/FSRP_WB_Fert_KickOff.pdf. 10 FAOSTAT. Production: Crops. 2009 data, which can be accessed at: http://faostat.fao.org. NB: this source was also used for figures provided for Malawi and Viet Nam. 11 FAO. 2006. Forest Resource Assessment 2005. 12 Thurlow, J., T. Zhu, and X. Diao. 2009. The impact of climate variability and change on economic growth and poverty in Zambia. IFPRI Discussion Paper 00890. Washington, DC: International Food Policy Research Institute. 13 Tadross M., Suarez P., Lotsch A., Hachigonta S., Mdoka M., Unganai L., Lucio F., Kamdonyo D., Muchinda M. (2009) Growing-season rainfall and scenarios of future change in southeast Africa: implications for cultivating maize. Climate Research. Vol. 40. 147-161. DOI: 10.3354/cr00821. 14 Jones, P.G. and P.K. Thornton. 2003. The potential impacts of climate change in tropical agriculture: the case of maize in Africa and Latin America in 2055. Global Environmental Change 13: 51-59. 18 emissions, while keeping in mind that fertilizer use in Africa is much lower than other regions. Vietnam has a lower proportion of under-nourished, estimated to be 11 percent in 2005/2007, but gains in reducing under-nutrition could well be lost, particularly if the country’s water resources are negatively affected by climate change. Vietnam faces pressures on its arable land; rural population densities are much higher than in the Africa countries at 900 per sq. km. And, more than 30 percent of its arable land is categorized as being severely or very severely degraded. Increases in forested area over the period 1990-2005 are a positive sign. In terms of climate change, an IFPRI study evaluated a number of potential scenarios over the periods to 2030 and 2050, and found that large potential rice yield losses in the poorer central highlands and northern regions, between 4 and 12.5 percent; and, while potential yield losses in the Mekong delta region were more muted, at between 2 and 8 percent, because the Mekong is the major rice producing region, even relatively small yield losses can mean large declines in aggregate rice availability. 15 Sea level rise could also negatively affect rice production in the Mekong Delta region, according to Vietnamese officials.16 Increasing and maintaining food security and agricultural growth are key priorities for all three countries. At the same time, there is a clear link between deforestation and land degradation on the one hand and lower crop yields and lower resilience of the agricultural systems on the other. Climate smart agricultural practices – which include agroforestry, improved fallows, conservation agriculture, improved seed varieties that increase biomass, soil and water conservation structures and improved grazing land management – often generate both adaptation and mitigation benefits. The capacity to leverage additional financial resources from climate change adaptation and mitigation funds, as well as carbon markets over the longer term, will increase the capacity of these countries to move towards low carbon-emissions agricultural growth pathways that meet food security and adaptation objectives, whilst generating significant mitigation benefits at the same time. However, though there is a broad understanding of the types of agricultural practices that can meet these three objectives, there is limited evidence of the actual costs and barriers to adoption at the household level or of the enabling institutional and policy environment at the national level necessary to lower transactions costs and reduce barriers to adoption and to secure additional mitigation financing at the national level. The Project focuses on addressing these knowledge gaps at both levels. The Project aims to break new ground in developing synergies between climate change and food security policy in selected developing countries. It includes information gathering and analysis so that pilot country policies and strategies are informed by the best possible evidence that is relevant to particular country circumstances. It is also expected to lead to pilot projects with tangible impacts, both on the livelihoods of farmers and on their ability to adopt low-emission agricultural growth paths adapted to climate change. It will draw on experience from both climate change (i.e. NAMAs, NAPAs, REDD+, and Climate for Development in Africa (ClimDev-Africa)) and food security (i.e. CAADP) initiatives. Both ClimDev and CAADP are supported by the EC. 15 Yu, B., T. Zhu, C. Breisinger, N.M. Hai. 2010. Impacts of Climate Change on Agriculture and Policy Options for Adaptation: The Case of Vietnam. IFPRI Discussion Paper 01015. Washington, DC: International Food Policy Research Institute. 16 Dr. Nguyen Van Thang, Deputy Director General, Ministry of Natural Resources and Environment, Vietnam Institutte of Meteorology, Hydrology and Environment. 19 An important lesson is that there is a significant lag time between political and financial commitments and concrete plans and actions at country level. This has been the experience of, for example, CAADP, which accelerated in 2010 after several years of limited progress. In the current intervention FAO will act as a catalyst to accelerate the process in developing country-owned roadmaps that will leverage L'Aquila and Copenhagen/Cancun commitments. FAO is also involved in the development of agricultural development investment plans for CAADP and a climate smart agriculture investment platform to mainstream climate smart agriculture into these CAADP investment plans and programmes. This is one potential way of making country level climate smart investments operational in a timely manner. Lessons from Payment for Environmental Services (PESs) schemes as well as conditional cash transfers (safety nets) are relevant for the mitigation financing component of the Project. Here two important lessons emerge: (1) Building on local institutions involved in natural resources management is an important way of reducing transaction costs and achieving collective action required for environmental service programmes; and (2) Experience with conditional cash transfer programmes indicate the importance of such programmes for rural households to absorb climate shocks, and also that targeting payments to women can result in more effective programme outcomes. These lessons will be used in designing incentive schemes. 3. 3.1 PROJECT FRAMEWORK Impact The expected long-term impact of the Project is to contribute to the achievement of Millennium Development Goals 1 Eradicate Extreme Poverty and Hunger and 7 Ensure Environmental Sustainability, as well as Article 2 of the UNFCCC. 3.2 Outcome and Outputs The expected outcome of the Project is that the capacity of the three partner countries to undertake and finance climate smart agriculture is strengthened. The Project is expected to achieve four main outputs: (i) an evidence base for developing and implementing policies and investments for climate smart agriculture is built in the three (3) partner countries; (ii) country-owned strategic frameworks for climate-smart agricultural activities are formulated; (iii) climate smart agriculture investment proposals are formulated and possible financing, including from climate finance is identified; and (iv) capacity for evidence-based planning, implementing and financing climate smart agriculture is built in the three (3) partner countries. The Project log-frame and the tentative work plan are given in Appendix 1 and Appendix 2, respectively. The activities under each result are described within the section below. 20 It is expected that the project log-frame and work plan will be revised after the initial 6 month project period, during which detailed consultation with stakeholders will take place that will be used to generate revised and finalized plans. 3.3 Activities Activities will be carried out through an implementation phase, preceded by an inception phase of approximately six months, during which time country-level consultations on various aspects of project design and management will be held. The operational duration, including inception phase, is 36 months. 3.3.1 Indicative Activities of the Implementation Phase Based on the four expected outputs outlined above, the indicative list of activities is presented below. Indicative activities under Output 1: An evidence base for developing and implementing policies and investments for CSA is built. Activity 1.1: Meta-database of existing household level datasets with information relevant for adaptation and mitigation documented and available for analysis Compilation of household datasets that include information on food security and current adaptation-relevant, climate smart agriculture practices (e.g. agroforestry, use of cover crops, conservation agriculture), and collection of complementary institutional datasets with information on supra-household factors that affect incentives for households to adopt climate smart agriculture practices (e.g. information on CSA practices, community rules/norms on land use, credit sources). This activity will begin with a scoping of currently available datasets and information in the selected case study countries for possible use in integrating climate change adaptation and mitigation for food security e.g. FAO, the World Bank Living Standards Measurement Study (LSMS), and International Food Policy Research Institute (IFPRI), and project-based data and impact evaluations such as those found in the World Overview of Conservation Approaches and Technologies (WOCAT) database. Additionally, the project will develop and implement targeted household-level questionnaires in case study countries to collect more in-depth information on climate smart agriculture where such information is limited or missing from existing surveys. Activity 1.2: New household and institutional datasets needed for CSA evidence base A survey of local institutions relevant for adoption of CSA systems will be developed and implemented to complement the household data; these surveys will target the relevant community and supra-community institutions that affect household incentives to adopt CSA. Activity 1.3: Meta-database of soil sequestration potential by farming practices linked to household datasets Information on emissions and sequestration potential will be linked to farm-level datasets. Technical data on soil sequestration potential by agro-ecological region and by agricultural practices will be compiled and formatted so that it can be matched with the household-level data. Data and methodological approaches being developed by the FAO MICCA programme as well as University of Aberdeen will be used. 21 Activity 1.4: Conceptual framework for identifying CSA strategies developed Development of a conceptual framework to analyze factors affecting smallholder decisions to adopt practices and make investments that improve food security, adaptive capacity and mitigate carbon emissions. The framework will capture both the short- and the long-term costs and benefits associated with adoption of different CSA activities, with the specific aim of highlighting how payments (or other institutional and/or policy mechanisms) could induce “additional” CSA. The framework will then be used to guide empirical analysis of economic and environmental impacts of changes in farming systems, and to aid in the development of a policy. Activity 1.5: Statistical analyses of policy factors that increase agricultural production and adaptive capacity, and capture synergies with mitigation objectives Empirical analysis of barriers to adoption of CSA activities. This activity will use datasets generated under Activities 1.1 and 1.2, and the conceptual framework to generate a set of statistical analyses of costs and barriers to the adoption of CSA. Activity 1.6: Development of a policy simulation model (in tandem with development of country-owned strategic frameworks This activity will lead to the development of a simulation model to assess which policies and/or institutional mechanisms can be used to reduce costs and overcome barriers to CSA adoption. Model parameters will be based on results from the household level analyses on constraints to household adoption of CSA (Activity 1.5), data on mitigation potential of different CSA activities collected under Activity 1.3, and the detailed review of the current institutional context and policy regime affecting these constraints (Activities 1.3 and 1.4). Simulations will then be conducted to evaluate impacts on incentives to adopt practices and identify the most promising policy options and institutional innovations. Additional simulation scenarios will be used in connection with the country-level policy dialogue process (Activity 2.1). Indicative activities under Output 2: Country-owned strategic frameworks for climatesmart agricultural activities are formulated. Activity 2.1: Evaluation of existing programmes, policies and institutional frameworks affecting the development, financing and implementation of CSA conducted in the three partner countries Mapping and analysis of key existing institutional arrangements related to agricultural sector development, food security and climate change, including but not limited to, network maps of: interministerial coordination on climate change, agricultural research and extension and the seed sector. Evaluating institutional capacity to facilitate more integrated planning and collective action across institutions, the review will be accompanied by discussions and key informant interviews with relevant country institutions. Activity 2.2: Review of consistencies and contradictions between major agricultural and climate change policy documents including Poverty Reduction Strategy Papers (PRSPs), CAADP plans, NAPAs and NAMAs Review of existing national policies, including key policy instruments such as PRSPs, NAPAs, NAMAs, national climate change and food security strategies, where available, 22 assessing potential synergies or contradictions across these documents. The review will be accompanied by discussions and key informant interviews with relevant country institutions. Activity 2.3: Identification and costing of priority CSA options, based on outputs from Result 1.1 and input from in-country stakeholders This activity will first identify priority options, based on Result 1.1 and in consultation with stakeholders, and provide a rough estimation of the costs associated with priority action options. The costs estimates will be derived through information collected under Activity 1.2 at the household level, augmented by key informant interviews, and data from the investment cost database being prepared for the FAO “Agriculture towards 2050” analysis. Building on Results 1.2 and 1.3, priority and costed options for climate smart agricultural activities will be identified for inclusion in either a stand-alone strategic framework or roadmap, or as a component of a planned or existing document (National Adaptation Plan, a national Climate Change Strategy or an Agriculture Sector Strategy). Activity 2.4: Facilitated policy dialogue to prepare CSA strategic framework document Using the results of policy simulations, institutional mapping, policy analysis and analysis of climate financing mechanisms (see below) as a basis for discussion, the activity would facilitate policy dialogue between food security, agricultural and climate change policymakers and consultation with key stakeholders to develop consensus on priority activities to be included in country-owned strategic document on climate smart agriculture, which would also outline the technical, financial and policy challenges involved. Activity 2.5: CSA strategic framework document finalized, building on Result 1.2, 1.3 and Outputs 2.1-2.3, and input from in-country stakeholders. The Project will hold workshops and policy dialogue sessions to enable the completion of the framework documents. Indicative activities under Output 3: CSA investment proposals are formulated and possible financing, including from climate finance, is identified. Activity 3.1: Country-specific business model for linking climate finance to smallholder agriculture developed Development of a business model for linking climate mitigation and adaptation finance to the adoption of climate smart agriculture. The activity will undertake strategic analysis of the potential for linking climate finance to activities that support the smallholder sector, an assessment of the measurement, reporting and verification (MRV) costs associated with possible mitigation and adaptation financing options, and identification of potential institutional mechanisms to integrate adaptation, mitigation and food security financing channels. The potential for developing an agricultural NAMA or an agricultural component of a National Adaptation Plan (NAP) with mitigation co-benefits would be assessed. Activity 3.2: Development of investment project proposals Building on the work under 2.1, one investment proposal document for each country will be developed. Examples might include linking mitigation finance to insurance and safety net programmes or adaptation financing to support adoption of more resilient production systems. 23 Activity 3.3: Development of project Monitoring and Evaluation (M&E) and impactassessment mechanisms The investment proposals will include an impact assessment protocol and feedback mechanism to ensure that lessons learned from the Project are identified and disseminated to Project managers as well as other stakeholders. This activity will help ensure that lessons learned from early-action Project activities can be built on in developing a strong portfolio of projects in the future. Indicative activities under Output 4: Capacity for evidence-based planning, implementing and financing CSA is built. Activity 4.1: Construction of web-based knowledge-sharing platform to facilitate iterative learning across stakeholders Knowledge-sharing platform developed. One of the key goals of the initiation workshop will be to devise an iterative research and learning platform to facilitate communication between all Project stakeholders. In part this will be an interactive web-based site for information sharing. Activity 4.2: Support to national PhD and Master’s students on Project-related work In each country, the Project will establish strong collaborative links with leading research institutions and universities and will support one PhD and two Master’s students, who will contribute to Activities 1.2.1 or 1.2.3, as relevant. Activity 4.3: Training of agricultural and climate change policy-makers on issues of climate smart agriculture Short training courses and workshops, as well as visits amongst Project partner countries, will be implemented by the Project to build the capacities of key stakeholders in government and civil society. Activity 4.4: Support for agricultural policy-makers in attending national and international climate change policy processes The Project will support the participation costs of agricultural policy-makers to international and national climate change policy fora such as the UNFCCC COP. Activity 4.5: Preparation and dissemination of policy briefs on climate smart agriculture The FAO headquarters Project Team will develop briefing notes on current developments in international and national climate change policy making of relevance to agricultural policy makers in collaboration with national policy partners, and these will be disseminated through meetings, workshops, websites and other means. 3.3.2 Inception Phase The Project will begin with a six-month inception phase that will run concurrently with initial activities under Output 1: building an evidence base for developing and implementing CSA. During the inception phase, there will be extensive consultations with partner country policy 24 and research organizations to finalize and streamline the Project design and implementation plan. Below are detail activities under both the inception and implementation phases. Activities to be implemented during the inception phase The following activities are expected to be implemented during the Inception phase: a) Discussion with Government on possible Project coordination arrangements that will include: a National Project Coordinator (NPC) experienced in policy and technical issues related to climate change and agricultural development for 30 months, responsible for the overall coordination of country Project activities; precise identification of partner country counterparts (in addition to the NPC) who will be responsible for the Project; and assignment of office space by partner country Ministries of Agriculture to a Coordination Unit or the use of the FAO Office in-country, including in coordinating and facilitating Project activities; b) recruitment of staff for a FAO headquarters technical backstopping unit (Project Team) recruitment of a P5 Senior Economist, Food Security and Climate Change; recruitment of a P4 Project Technical Coordinator/M&E Expert; and recruitment of a P1 Project Operational and Administrative Coordinator. c) establishment of a FAO Interdepartmental Task Force (ITF) for the Project (including the Agricultural Development Economics Division, Agriculture, Natural Resources and Environment Division, Technical Cooperation, E&S, Legal Office and other relevant units); d) purchase of equipment by FAO (Computers, printers, internet connection) for Partner country Project Coordination Teams (Coordinators); e) preparation of the draft version of terms of reference and membership for the Project steering committees, by the FAO Lead Technical Unit in close collaboration with the national Project coordinator; f) establishment of a Project Steering Committee (one in each country); and g) Project launching workshops to bring together key stakeholders and finalize detailed planning of Project activities. Based on outcomes, Memorandums of Understanding (MoUs) or Letters of Agreement (LoAs) will be prepared and signed with relevant institutions. The MoUs or LoAs with organizations and partner entities will state the roles and commitments of each entity in the implementation of Project activities. 3.4 Sustainability A major focus of this Project is to build the knowledge, capacity and institutional structures that partner countries will need to implement climate smart agriculture over the long term. One of the main objectives of the Project is to establish better communication channels and capacity for planning across agriculture and environmental (climate change) ministries through the joint development of a strategic “roadmap” defining future collaborative actions required to achieve climate smart agriculture in partner countries. This strategy will then be implemented via the development of a set of investment proposals for climate smart 25 agriculture completed by the end of Project. Thus, the roadmap and operational investment proposals for climate smart agricultural activities will be identified and planned by people in national partner country government and civil society institutions, who will also be involved in their enabling and implementation. This should help to ensure the sustainability of the Project impacts. The Project will be initiated through stakeholder consultations in each of the partner countries to identify all relevant organizations, Projects and people working in areas relevant to climate smart agriculture. The Project will then work within these existing structures to enhance and extend capacities for creating linkages across institutions and policies. One of the selection criteria for partner countries was the interest and potential coordination capacity of the countries in implementing climate smart agriculture, and thus there are already several key policies and Projects in the selected countries that this Project will build upon. For example, a National Programme for Managing Climate Change in Malawi has already been initiated under the MoDPC and Ministry of Natural Resources, Energy and Environment. Making full use of existing and nationally-owned institutions, mechanisms and policy frameworks will also help to limit proliferation and parallel processes, thereby contributing to financial sustainability. One important role of the EC-FAO CSA Project will be to support the participation of the Ministry of Agriculture in national efforts to coordinate multisectoral climate change activities. In Malawi and Zambia, the Project will work closely with the ongoing development of climate smart investment plans under the CAADP for which a climate smart agricultural investment platform is under development. The Project includes mechanisms for the collection and sharing of information within and amongst the partner countries, as well as between the countries and international climate change and agricultural policy processes. One major vehicle for this is project M&E systems and the interactive Project web site. Another is the implementation of “dialogue” workshops involving local, national and international stakeholders across a range of disciplines and organizations. In order to enable proper monitoring and evaluation, it is important to explain for each Output: (i) what follow-up action is envisaged to ensure its sustainability; (ii) what resources, infrastructure, capacity, processes, etc. are in place to ensure continuity and by which institution; (iii) the contribution of its follow-up action to ensure the sustainability of project outcome; and (iv) its contribution to the foreseen impact and catalytic effects. An evidence base for developing and implementing policies and investments for climate smart agriculture is built in the three (3) partner countries Follow up action to ensure sustainability Resources/Institution Contribution of follow Contribution to s in place to ensure up action to overall project impact continuity sustainability Ownership of national universities and implementation of research through national MSc and PhD students ensures continued capacity and interest in developing evidence base required to support better policy-making National universities and the Masters and PhD students trained under the project Perhaps the main issue on sustainability of the evidence base is how it will be used – e.g. how effective will it be for In all three partner policy development? By countries research making a link between institutions are researchers and policyestablishing new makers at the national programs/curricula related level the project creates a to climate change and sustainable link for agriculture and the project effective use of the will work with them to evidence base as well as development of curricula conditions for its ongoing with National research expansion and partners to ensure improvement continued and relevant Building an evidence base is essential to achieving successful climate smart agricultural systems and this project will build not only the evidence base needed, but also the ongoing capacity to expand it in direct response to policy needs 26 training Country-owned strategic frameworks for climate-smart agricultural activities are formulated A permanent channel to new sources of finance (e.g. climate finance) are established to support strategic frameworks Project will help to build institutions required to open climate finance channels working with existing institutions for channelling finance to Partnership between Ministry farmers and accessing of Ag. and Ministry of ODA and/or GEF funds Environment in working on strategic framework Policies and institutions in enhanced through place to ensure continuity implementation of specific of the project vary by elements country but may include national policy instruments such as National Adaptation Plans or National Integrated Climate Change Policy Program Establishment of institutions and procedures for accessing climate finance to support smallholder agricultural systems is an essential component of achieving sustainable models of climate smart agriculture in countries The process of bringing together policy makers from agriculture, environment and other relevant areas to develop a unified (and somewhat detailed) strategy for coping with climate change in the context of agricultural development in and of itself, will create new capacities, and channels of communication required to achieve climate smart agriculture in countries Climate smart agriculture investment proposals are formulated and possible financing, including from climate finance is identified The most important follow up action here is to ensure these proposals get financed and implemented – essentially achieving this is envisioned as part of the project outcome – which guarantees that the next steps for achieving climate smart agriculture (e.g. actually implemented a financed project) takes place Climate finance institutions internationally are only now emerging – including Cancún Fund and other instruments managed by the World Bank. One of the main functions of this project will be to help build capacity to receive these funds at country level Accessing finance and implementing the investment proposals is an essential part of achieving a sustainable capacity to implement climate smart agriculture in countries The financing of the investment proposals developed under the project is a major step (and necessity) for achieving the project objective of enhancing country capacity to implement climate smart agricultural systems The investment and financing proposals developed during the project provide for continued capacity building to support implementation of climate smart agriculture National research institutions partnered with the project – as well as the national policy partners – e.g. staff in Ministry of Agriculture The ongoing ability to identify, plan and execute programs on climate smart agriculture is very important for achieving project sustainability Maintaining and augmenting the capacity in country to plan and implement climate smart agriculture systems is essential to achieving project impact – that country’s have the capacity to achieve climate smart agricultural systems Capacity for evidence-based planning, implementing and financing climate smart agriculture is built in the three (3) partner countries At the country level – there is likely to be a range of institutions involved – from Ministry of Finance through financing channels to small farmers via credit, safety net programs or fertilizer subsidy programs – any of these may serve as an institution for channelling climate finance 3.5 Risks and Assumptions The Project aims to assist countries to develop sound policies to address the twin challenges of food security and climate change in a coordinated way and to develop road maps for their 27 implementation. In this section, the risks are first considered related to the three main assumptions associated with Project impact and outcomes; this is followed by a discussion of risks related to Project activities. The three impacts and outcome risks are: 1. Impact Risk: Declining political commitment to climate change and food security, and unwillingness to address them in a harmonized way. Low-Medium risk. Potentially high impact. 2. Outcome Risk: Lack of engagement by relevant line ministries and staff, in terms of actively participating in capacity building for generating evidence-based climate smart agriculture strategies. Low risk. Potentially high impact. 3. Outcome Risk: Lack of demand/financing for carbon sequestration Projects. Medium risk. Potentially high impact. The Project has addressed Risk ‘1’ by judicious selection of countries for case studies – picking those with a genuine commitment to addressing the joint climate change and food security challenges and a willingness of relevant government ministries and other stakeholders to work together in solving problems. Specifically, contacts have been made with EC representatives as well as high-level officials in the agriculture ministries to obtain feedback on the Projects objectives, activities and organization. In addition, two members of the team have already visited two of the target countries (Zambia and Malawi), and have met with a number of key stakeholders both within the key line ministries and departments (e.g. agriculture, livestock, environment and meteorology), with the EC representatives and other donors investing in climate change and agriculture activities, with University and other research staff working on issues related to climate change and agriculture, and with relevant private sector representatives (e.g. private farmer organizations that promote adoption of sustainable land management practices). The country selection process also addresses Risk ‘2’, as contacts have already been established with key stakeholders in all three countries, and particularly in Zambia and Malawi where stakeholder meetings were held. Feedback from these meetings and from email communications will help us continue to refine Project activities so that these are relevant to ministries staff and other stakeholders. The Project also has a strong capacity building component to engage ministry staff, which will link to ongoing work by donors, including the EC, in capacity building of developing country stakeholders on climate change issues. Working within the existing policy and institutional frameworks in both the climate change and agricultural sectors within countries will reduce “overload” on ministry staff and resources. And finally, a process will be followed by which research activities are being integrated with the development of strategic policy documents and the development of investment proposals to reduce the risk that the evidence base is underutilized. Risk ‘3’ is real, given the financial pressures facing both developed and developing countries, however, the commitments to food security and climate change made at L'Aquila and Copenhagen, respectively, reduce the likelihood of occurrence. Next risks associated with activities required to meet Project objectives are considered. The first set of activities focuses on improving the evidence base beyond what is currently available in our target countries. The main risk is not being able to adequately generate sufficient information to develop the evidence base. To address this potential risk, existing household dataset for household information on barriers to adoption of CSA and other, similar, technologies have already been identified, and our major University partner for the 28 carbon sequestration work is Pete Smith at the University of Aberdeen who has well-known expertise in this area. In addition, summary statistics have already been generated from some of the existing household datasets; thus, key data gaps have preliminarily been identified within those that will be augmented with targeted data collection instruments. In particular, an “institutional-level” survey will be developed and implemented, with data collected in geographic areas that correspond to households in the datasets, so that these two levels of information can be combined. The second risk is that country partners do not actively contribute to developing the policy simulation model, which would limit the usefulness of simulation results. The third risk is that materials generated from the analyses and simulation model are available as useable inputs into policy processes. To address these two risks, it is foreseen to establish focal point staff in the relevant ministries with whom a working relationship will be established in order to ensure the analysis and modelling generate relevant information and that that information is then made available in formats that can be used as inputs into policy processes. Periodic workshops will also be held to obtain feedback from a wider range of stakeholders, and in tandem with the development of CSA strategic frameworks and CSA financing proposal development. Overall, this set of activities is believed to be low risk. The second set of activities focuses on developing country-level strategic frameworks for pursuing CSA. Preliminary conversations with a number of stakeholders in the target countries have resulted in strong support in achieving this objective. One risk expressed by country partners is that this work might be undertaken in isolation and thus not effectively integrated into the wide range activities concerning climate change and agriculture in partner countries. To mitigate this risk, stakeholders have been actively engaged from a wide range of ministries, to ensure that the agriculture sector specific strategic climate change frameworks developed are coherent with the national plans covering both agricultural development and climate change. Additionally, stakeholders in Malawi and Zambia were also concerned that this work also be consistent with, and supportive of, the CAADP process. The CAADP plan for Malawi was reviewed, and revised where necessary to ensure consistency; and communication has also been established with relevant CAADP partners at both country and regional level for Malawi and Zambia, Furthermore, an opportunity was identified to work with the World Bank to develop criteria for screening CAADP plans for CSA in regional investment plans. A second risk is that stakeholders do not actively participate in developing the roadmaps. As noted above, focal points in government ministries as well as workshops will address the risk of low stakeholder participation; and in fact, opportunities will be sought to hold workshops together with other stakeholders to minimize “workshop fatigue” and to maximize coherence across complimentary activities being pursued by other Projects. Another risk associated with this set of activities concerning costing out the various options. Relevant cost information will be collected where this is available at the household level; however, costs for certain options may not be readily available from these sources (e.g. agroforestry options that have not yet been adopted). Instead, it may be likely that cost data will need to be obtained from existing Projects that are implementing pilot activities; contacts have already been made with a number of such Projects and will continue to build a database of total Project costs, including inputs, capacity building and training, etc. The third set of activities focuses on identifying priority CSA activities within each country, and then developing a final investment proposal for a CSA investment, including identifying a 29 financing source, following the business model tailored to that source, and developing a protocol for Project monitoring and evaluation. As noted above, the main risk here is that the carbon emissions market collapses. A second assumption is that feasible financing mechanisms and instruments exist to reach smallholders; to reduce the risk that no feasible mechanisms/instruments exist, experiences of similar Projects in other countries are first being reviewed and secondly, the proposal development process itself will aim to ensure that such instruments can successfully reach smallholders. The fourth set of activities focuses on improving in-country capacity for undertaking evidence-based planning and implementation of CSA strategies and investments, including participating in international climate change policy processes. The main risk here is that national partners and stakeholders limit their active participation in knowledge generation and capacity building. To minimize this risk, the successful example of earlier Projects is followed, which have provided support for Masters and PhDs in relevant areas, and where students also actively contribute to Project activities. The participation of agricultural policymakers at international and regional climate change meetings will also be supported. Finally, as noted above, information on all other relevant stakeholders who are also involved in climate change-based Projects is actively being compiled so that capacity building materials and courses are complimentary to other exercises. 4. 4.1 IMPLEMENTATION AND MANAGEMENT ARRANGEMENTS Institutional Framework and Coordination The Project institutional structure consists of a Project Team located at FAO headquarters in the ESA division, country Project coordinators in each country, and partner research and policy institutions in each country. The institutional framework is shown in the chart in Appendix 4. The organizational structure and proposed Project Team reflect the three major components of the action: research, policy and institutional strengthening. Aside from the core Project Management/Technical Team described above, additional Project Team consultants for Coordination, Geographic Information System (GIS) and Investment/Financing are also foreseen. The policy component would use external consultants for the review of policy instruments and facilitated dialogue across ministries. Preparation of strategic frameworks for action and investment proposals would be nationally led and internationally supported. Close working arrangements with national staff and institutions would be the rule of thumb, in order to strengthen capacities for continuity and sustainability of action beyond the lifetime of the proposed Project. In each partner country the MoA is the main policy partner for the Project with close linkages to other relevant ministries (e.g. of Environment, Development Planning and Finance). In Malawi this is MAFS, in Zambia MACO and MLF, and in Vietnam MARD. In each case, the partner country will designate a department and staff person to be the focal point for the Project. In addition, each country will have a research partner institution. For example, these may include Bunda or Chancellor College in Malawi, University of Zambia or Copperbelt University in Zambia or an Agriculture Research Institute in Vietnam. Selection of the research partner institution will be done in consultation with the country policy partners. The Project will recruit a country Project coordinator for each of the partner countries. This staff person may be placed in the FAO representation in country or in one of the country partner 30 institutions. Final placement will be decided upon consultation with country policy partners and FAO country representations. ESA will establish an ITF at FAO headquarters involving relevant FAO Units and have regular meetings to review work plans and thematic reports and documents as required, monitor and provide guidance to the Project. 4.2 Strategy/Methodology The methodology for implementation is based on the notion of first establishing an evidence base for climate smart practices and constraints, which would involve assembling both existing data and collecting targeted new data. This data would inform: (i) policy formulation to overcome the constraints identified; (ii) the preparation of a strategic framework or roadmap of prioritized and costed action; and (iii) in the context of the strategic framework, the development of investment proposals and the identification of their financing. The reason for using such a methodology is to enable policy and strategy formulation to be based on country/agro-ecological regional-specific data. The strategic framework will in turn inform the preparation of the investment proposals. The methodology fully recognizes that national action is not starting from zero and can build upon ongoing activities at country level (for example, conservation agriculture programs in the case of Malawi and Zambia). It also fully recognizes the importance of and benefits that accrue from nationally led and owned efforts in the context of the proposed action. The organizational structure and proposed Project Team reflect the three major components of the action: research, policy and institutional strengthening. Aside from the core Project Management/Technical Team described above, additional Project Team consultants for Coordination, Geographic Information System (GIS) and Investment/Financing are also foreseen. The policy component would use external consultants for the review of policy instruments and facilitated dialogue across ministries. Preparation of strategic frameworks for action and investment proposals would be nationally led and internationally supported. Close working arrangements with national staff and institutions would be the rule of thumb, in order to strengthen capacities for continuity and sustainability of action beyond the lifetime of the proposed Project. The main means of implementation of the action involves compiling data, including from household and institutional surveys, as well as evaluation of this data and analyses of potential policies for which computers would be needed for data processing. The policy work may require some audio-visual equipment for presentations and showing simulations. Preliminary consultation with stakeholders has reflected a positive attitude to the idea of addressing food security and climate change together and seeking ways to maximize synergies and minimizing trade-offs across the multiple objectives, on which agriculture is expected to deliver. FAO will implement the Project in manner consistent with existing technical and policy support Projects being executed in developing countries. FAO ESA will take the lead for Project implementation, expanding the existing technical, policy support and administrative capacity of the unit to support Project level activities. 31 Activities will be carried out in three pilot countries. Criteria for country selection include: (i) importance of smallholder agriculture sector for food security; (ii) interest of key policymakers institutions to participate; (iii) a clear desire for better harmonization of policies on climate change and agriculture; (iv) availability of data; (v) links to other ongoing FAO work, including work on the transformation of smallholder agriculture and the design of social safety-nets; and (vi) links to ongoing or planned EC funded activities under GCCA or ENRTP. The final selection of countries was based on further consultation with the country governments concerned, as well as with EU Delegations, FAO Representations and other key in-country stakeholders. In the interests of generating regionally relevant results, and capturing economies of scale in travel and staff time, the final selection involved a maximum of two regions (e.g. Africa and Asia). Project implementation will be achieved through the establishment of partnerships and LOAs with a Lead Technical Unit and Lead Policy Unit in each country (See Figure 1). The Project involves significant staff time by both FAO ESA and partners in the selected countries. FAO ESA will develop capacity-building activities for country partners with external partners as well as through FAO-lead training activities. Country technical partners will be supported by FAO ESA technical staff to assist in the design of dataset development and economic analysis. In addition, the Project will support a PhD student from each of the pilot countries for work on the technical analysis that can also be used for doctoral research. This is a successful model of FAO collaboration that has been applied in previous ESA Projects. Country policy partner institutions will also be supported by capacity-building activities, as well as FAO staff support. 4.3 4.3.1 Inputs FAO Inputs To undertake Project activities using the above discussed strategy, FAO ESA will contribute significant staff time of the Project Director, the Senior Research Economist, other technical staff, the Senior Policy Consultant and the Project M&E Coordinator. FAO representation in partner countries will also contribute staff time. Information inputs that will be utilized include the existing data sets from previous FAO, World Bank LSMS, IFPRI and WOCAT Projects. The Project will implement targeted household and institutional surveys to complement the existing data, given the shortcomings of existing information base on climate smart agricultural practices and institutional settings that affect their adoption. Physical inputs required include computers for data processing and audio-visual equipment for presentations to disseminate results and develop capacity in partner country policy institutions. The ESA programme of work on building climate smart agricultural systems integrates regular and extra budgetary resources, including support from the Swedish International Development Agency (SIDA) as well as the MICCA multidonor trust fund. 4.3.2 Government Inputs In addition to the 62 percent of the budget which will be provided as a grant by the EC (EUR 3 300 000) as well as the 38 percent (totalling EUR 2 000 000) committed by FAO, governments of the three partner countries will provide a co-funding contributions to support the successful implementation of the Project. These contributions are estimated about 10% in 32 the budget. Government contributions, which will be decided during the inception phase, might include: (i) provision of office space for the NPC and allowance for support staff; (ii) commitment to Project objectives and its implementation; (iii) active membership in the NSC; and (iv) facilitation of links required with different public central and decentralized authorities, Non-governmental Organizations (NGOs) and the private sector. 4.3.3 Donor Inputs The maximum European Union contribution is EUR 3 300 000. The foreseen operational duration is 36 months as from the date agreed as stated in the signed Contribution Agreement. 4.4 Technical Support/Linkages As indicated above, Project technical support will be lead by a Senior Economist, Food Security and Climate Change for the research component, and a Senior Policy Adviser for the policy component. Consultants, both national and international, will assist in providing technical inputs to specific Project activities. Project activities will be carried out to the greatest extent possible within existing national and regional initiatives (e.g. NAPs, NAMAs, CAADP and COMESA) and linked to FAO activities and its field programme in support of regional and global efforts for sustainable agricultural development for food security and climate change adaptation and mitigation. The Project with FAO support, will seek all possible linkages and collaboration with relevant centres of excellence, international and regional organizations, particularly the AU/NEPAD agriculture-climate change framework programme, the World Bank/CAADP climate smart agriculture investment platform, COMESA programme activities on agriculture and climate change and European Union supported sustainable agriculture Projects in partner countries. 4.5 Management and Operational Support Arrangements As indicated above, the LTU and Budget Holder (BH) will be located at FAO headquarters, supported by an ITF to provide guidance, management and operational support to the Project, with linkages to relevant regional offices (FAO/Regional Office for Africa [RAF] and FAO/Regional Office for Asia and the Pacific [RAP]). Project operational support will be based entirely at FAO HQ; the role of the FAO/RAF and FAO/RAP will be advisory only. Partner-country ministries will appoint competent officers, knowledgeable and experienced in agricultural development to act as Project focal points to liaise with Country Project Coordinators as well as with the Project Team at FAO headquarters for the planning, implementation and monitoring of Project activities. The national focal points will be responsible for leading and coordinating in-country activities with the support of the technical and coordination arrangements outlined above. Partner-country ministries will establish and lead an NSC, headed by a high-ranking officer of the key-responsible institution/entity and including representatives of relevant ministries, institutions, organizations and the donor (EC). The NSC will meet at least twice a year to oversee and guide Project implementation. 33 5. BUDGET OF EACH PARTNER COUNTRY Consultants Contracts/LOAs Travel (international) Travel (local) Training/Capacity Building Expendable (stationary) Non-expendables (computers) Monitoring and Evaluation General operating expenses Euro € 165,000 € 383,333 € 16,333 € 10,000 € 162,000 € 5,550 € 3,969 € 12,500 € 11,000 Total Euro Total USD (1 euro=1.30 USD) € 769,685 $1,000,591 The budget is an estimate of the funding that will flow to the partner country, by major expenditure category. The budget will be revised upon the completion of the 6 month project initiation period. 34 6. MOTIVATION, PROJECT ACTIVITIES AND COUNTRY BUDGET FOR VIETNAM General Project Background Food security, climate change adaptation and mitigation intersect in the agriculture sector. The Project examines them together in order to capture multiple benefits and manage tradeoffs across these challenges. The Project would build an evidence base to support identification of: a) climate smart agricultural practices/technologies and barriers to their adoption by smallholder farmers b) policy and institutional options that could promote their uptake, including local institutional arrangements. c) investment proposals that cost and prioritize promising climate smart agricultural options, linking proposals to possible financing (ODA and climate) The project will analyze climate smart agricultural options to assess their contributions to food security and adaptation (with potential mitigation side benefits) in the Northern Mountainous regions of Vietnam. The analysis will rely on large scale household data from repeated surveys (as many years as possible from the same sample of households) with detailed information on agricultural practices at the plot level, socio-economic data and other income generating activities. These data will be merged with historical climatic data and mitigation potential of practices to assess the interactions of climate change with the costs and benefits of CSA practices and serve as a basis for the identification of policy and institutional options for the uptake of priority practices. An important component for building the evidence base, while building capacity, will be the project’s support for Masters and PhD student research in areas of relating o the tradeoffs and synergies between food security, adaption to climate change, and mitigation of GHG emissions. Faculties are encouraged to contribute as Co-Principal Investigators or supervisors. A call for student proposals will be advertised after project approval based on the detailed topics identified for analysis and research grants will be awarded after the selection process is carried out. The project will also support capacity building for MARD engagement in international negotiations affecting the agriculture sector (in particular agriculture at UNFCCC meetings). The project is being funded by the EC, with a budget of 1 million USD for each partner country over three years. The project is interregional and is also being implemented in Malawi and Zambia, which provides opportunities for the exchange of experiences and lessons learned. We are mindful that the budget is not large but the project is timely and could contribute to the achievement of MARD targets on agriculture and climate change. Regional Focus Vietnam is likely to be among the countries most affected by climate change, and its farmers are among the most vulnerable to climatic disruption, both in coastal areas and in the highlands. The choice of regional focus for the project is driven by two factors: 1. Regions where agricultural vulnerability to climate change is a key risk to food security for households; 35 2. Areas where suitable data is available to analyze barriers to adoption of climate smart practices and provide evidence-based policy advice. The first point tends to exclude areas where off-farm income from urban and non-farm sources is a major and increasing source of household income, since the focus of the project is on managing agriculture for food security under climate change. The second requirement will direct the project where there are data available on households and production decisions, and where there have been changes in adoption of new techniques (for which we could test drivers of adoption). With respect to these two criteria the FAO team believes that the Northern Mountainous region is the best candidate for inclusion in the project. In the Northern Uplands farming remains the most important economic sector and the population in this region is increasing. Currently, the Northern Uplands remains among the poorest regions in the country (29% poverty rate compared to 17% in the rest of rural Vietnam). Research indicates that in this area, food shortages and food insecurity due to climate shocks is already an issue (Fischer and Buchenrieder, 2010). Despite the challenging situation farmers face in the Northern Mountainous region, considerable improvements have occurred in the last two decades in terms of intensifying production, reforesting degraded lands, adopting new crop varieties, and diversifying into other crops. The contribution of a number of MARD’s institutions (NOMAFSI, CASRAD, and others) to these developments, are a valuable resource for the project objective to understand barriers to adoption of new practices. Given the resources available for the project and the factors mentioned above, we envision undertaking activities in a limited number of provinces in the Northern Mountainous area. Given also the need to rely on existing data we propose to focus on the provinces where household level data are available. Upon preliminary investigation we have found the following potentially useful data sources for understanding costs and benefits of CSA practices and potential barriers to adoption: (i) the Vietnam Access to Resources Household Survey (VARHS) led by the Central Institute for Economic Management (CIEM); (ii) The Agricultural Census, conducted by the GSO (2006 & 2011 forthcoming) (iii)The Vietnam Household Living Standards Survey, conducted by the GSO. In particular, the VARHS has been conducting detailed rural household surveys in 12 provinces of Vietnam every 2 years since 2006. The VARHS surveys collect detailed information at the plot level on land use rights, the types/varieties of crops cultivated, productivity, soil and water conservation infrastructure, expenditures on inputs; as well as detailed information on other income generating activities, access to agricultural extension services and credit, shocks and risk coping and social networks. The VARHS data set covers four provinces in the northern region: Lao Cai, Lai Chau, Phu Tho and Dien Bien. The data from 2006, 2008 and 2010 can be used to assess the costs and benefits of some CSA practices, though the number of observations per province is small. Based on the above consideration on data availability, the project is considering carrying out 36 the project in the three provinces of Lao Cai, Lai Chau, and Dien Bien. However, a final decision would be made once an in-depth analysis of the data is made. The possibility of working in other provinces such as Son La or Yen Bai should be taken into consideration based on the other sources of data for those provinces. The Northern Mountainous region has a considerable area of upland cultivation of maize on very steep slopes subject to soil erosion, and subject to landslides. With climate change the risks associated with soil erosion are likely to increase due to a higher frequency of extreme events. Relevant topics that could be analyzed by the project as part of a CSA approach are (i) sustainable land management practices for maize systems in the uplands and barriers to their adoption, and (ii) diversification of productive activities into other crops (such as coffee and tea) and the investments necessary for diversification to occur. Aspects of value chain improvement could also be considered in this context, especially production and marketing as they relate to Arabica coffee and higher value tea varieties. To conclude, the FAO project team believes the Northern Mountainous region has the right combination of relevance to the broader agricultural context, ongoing research by research institutions, and general data availability in order to ensure that the project delivers its desired impact, and we look forward to further discussions with MARD for finalizing the details of the planned project activities. Indicative Budget - From the donor: € 769,685 ($1,000,591) Country’s contribution: $ 100.000 Below is an estimate of the funding that will flow to Vietnam as a partner country, by major expenditure category. Agreements of collaboration with NOMAFSI and other in-country research institutions would fall under the Contract/LOA item. The funding of students is typically done through a partner institution to be decided in consultation with MARD. If for example VAAS coordinates and manages the call for student proposals and the selection process, then the budget for student funding would be transferred in its entirety to VAAS, who would then carry out all coordination and supervisory functions concerning students theses. Technical Coordinator & Consultants Contracts/LOAs [includes travel to field] Funding of students (4 MSc, 1 PhD) Travel (international) Travel (local) Training/Capacity Building Expendable (stationary) Non-expendables (computers) Monitoring and Evaluation General operating expenses € 165,000 € 263,333 € 120,000 € 16,333 € 10,000 € 162,000 € 5,550 € 3,969 € 12,500 € 11,000 Total Euro Total USD (1 euro=1.30 USD) € 769,685 $1,000,591 37 From its part, Vietnam will contribute an equivalent to US$ 100.000, including office space, computer and other working facilities, salaries and allowance for NSC and support staff. Details of this contribution will be decided during the inception phase, might include: 38