Reducing Deforestation in Latin
America from Agricultural
Commodities
Concept Note, May 2012
UNDP Green Commodities Facility
i. List of Acronyms
COP
UNFCCC’s Council of the Parties
FAO
Food and Agriculture Organization of the United Nations
FCPF
Forest Carbon Partnership Facility
FIP
Forest Investment Programme
IFC
International Finance Corporation
GAP
Good Agricultural Practices
GHG
Greenhouse Gas
LAC
Latin America and the Caribbean
NAMA
Nationally Appropriate Mitigation Actions
NAPA
National Adaptation Programmes of Action
NCP
National Commodity Platforms
REDD
Reduction of Emissions from Deforestation and Forest Degradation, including Sustainable Forest Management, Enhancement of Carbon Stock and Conservation
REL/RL
Reference Emission Level/Reference Level
RTRS
Roundtable on Responsible Soy Association
SPS
Silvopastoral Systems
UNDP
United Nations Development Programme
UNEP
United Nations Environment Programme
UNFCCC
United Nations’ Framework Convention on Climate Change
UN-REDD
United Nations’ Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation
WWF
Worldwide Fund for Nature
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Executive Summary
The expansion of agriculture commodity production has been a leading driver of deforestation in many parts of Latin
America. The negative impacts have been particularly pronounced in two regions of major significance for climate
change and biodiversity conservation – the Amazon Basin and the Gran Chaco Forest, where cattle and soy production
have been the major causes of deforestation.
In Latin America there continues to be a fundamental policy and institutional disconnect between Reduced Emissions
from Deforestation and Forest Degradation (REDD) initiatives, which tend to be run by Ministries of Environment, and
the agricultural commodity sector and related product supply chains, which tend to be under the remit of Ministries of
Agriculture. As a result, farmers are, in general, currently not incentivized to reduce conversion of forests for agriculture. In addition, land use planning and the enforcement of environmental regulation, which are critical to the success
of REDD, are usually inadequate to regulate agricultural expansion or production practices.
However, major companies that source agricultural commodities from the region are becoming increasingly concerned
about sustainability issues and the greenhouse gas (GHG) footprint of their supply chains. Some of the leading companies are also committed to obtaining various forms of certification that demonstrate they are not sourcing commodities
from recently deforested land and are also reducing GHG emissions.
However, the existing certification systems and global commodity roundtables are not able to connect certificationbased market solutions with the associated governance that is needed to reduce deforestation at scale and address
“leakage” issues. Market based initiatives now need to be linked to the ongoing REDD efforts at a national level to ensure governance is connected to market solutions with more effective coordination to achieve REDD.
UNDP therefore proposes for this initiative to connect two of its major programmes - its governance role in United Nations’ Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation (UN-REDD) – and its
associated role as a Forest Carbon Partnership Facility (FCPF) Delivery Partner - and the pioneering role by its Green
Commodities Facility in the development of National Commodity Platforms (NCPs). This combination will bring a suite
of governance and market based interventions to change the way agricultural commodities are produced to reduce
their influence on deforestation.
This will allow a double benefit. On the one hand this initiative will facilitate engaging agriculture commodity supply
chain stakeholders in existing efforts to promote REDD readiness and to contribute to the elaboration of national REDD
strategies. This will include raising the visibility of REDD strategies and opportunities with existing beef, leather and soy
commodity sustainability forums that are promoting the adoption of good agricultural practices (GAP). And on the other hand it will work with national REDD programmes to complement sustainable agriculture initiatives to reduce deforestation and contribute to achieving national REDD targets. In practice this will mean aligning three major dimensions
previously disconnected yet imperative to achieve results:
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Ministries of Agriculture and Ministries of Environment
-
Public sector and private sector investment
-
Land use regulations and economic incentives
The approach is to link commodity production to REDD activities, plans and payments. The project will promote a
combination of support for improved agricultural practices, linked to land use planning and management in areas of
significant deforestation, policy development and reform, and improved monitoring and enforcement of regulations to
achieve REDD goals.
In order to ensure effective results, the initial focus will be on the cattle and soy sectors in Brazil and Colombia in the
Amazon Basin, and Argentina and Paraguay in the Gran Choco Forest.
UNDP has a comparative advantage in implementing such a project given its extensive experience in engaging with government agencies and the private sector. It is well known for being the neutral body that can facilitate public private
dialogue and inter-ministerial coordination. With its role in UN-REDD and its Green Commodities Facility UNDP brings
the additional technical expertise from both fields. UNDP’s National Commodity Platforms, which are recent innovations, will be particularly effective engagement mechanisms UNDP can set up at the national level.
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1. Current Status of REDD in Latin America
In Latin America the causes of deforestation and forest degradation are complex and interconnected, involving various
sectors of the economy and multiple actors. Historically the major drivers of deforestation in the region have been agriculture, logging, infrastructure development, oil & gas, mining, and more recently, biofuels.
Latin America has been a leader in efforts to support the reduction of greenhouse gas (GHG) emissions from deforestation and forest degradation, including sustainable forest management, enhancement of carbon stocks and conservation. These efforts have increased significantly in recent years, and some countries within the region are making significant advances in creating the regulatory and institutional capacity to address deforestation, and, in some cases, beginning to reduce deforestation rates. To date, the major focus of such efforts has been on: understanding the drivers of
deforestation and forest degradation, and analyzing past and ongoing efforts to reduce these; creating the necessary
legal and institutional frameworks, notably to address issues of carbon rights, land tenure – especially for indigenous
peoples – and payments for ecosystem services (PES); conducting forest inventories, and estimating the costs of achieving REDD; facilitating engagement processes with governments, the private sector, NGOs, CSOs, and other stakeholders, and identifying with national governments priority REDD actions, taking into account national conditions and circumstances. In addition, some NGOs and private sector carbon credit investors have also developed/are developing
pilot projects that seek to produce REDD carbon credits to sell to the voluntary forest carbon market.
Some of the major donor initiatives focusing on these issues are the United Nations’ Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation (UN-REDD), the Forest Carbon Partnership Facility (FCPF)
and the Forest Investment Programme (FIP).
The UN-REDD Programme is the United Nations’ Collaborative initiative on
Reducing Emissions from Deforestation and forest Degradation (REDD) in
developing countries. The Programme was launched in September 2008 to
assist developing countries prepare and implement national REDD+ strategies,
and builds on the convening power and expertise of the Food and Agriculture
Organization of the United Nations (FAO), the United Nations Development
Programme (UNDP) and the United Nations Environment Programme (UNEP).
The UN-REDD and FCPF programs have been designed the support the countries getting ready to engage in a future
REDD mechanism, following the content of the Cancun agreement. The UN-REDD and FCPF are presently supporting
the countries in Latin America and the Caribbean (LAC) in establishing:
1. A national forest Reference Emission Level/Reference Level (REL/RL)
2. A robust and transparent national forest monitoring system
3. A national system to provide information on safeguards, and eventually
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4. A National REDD Strategy which is based on a series of analysis and assessment and aims at addressing the specific drivers of deforestation and/or forest degradation. Its implementation framework must be clarified, explaining the role and responsibilities of each actors, as well as its sustainability and integration with other sector policies and strategies.
The technical issues are relatively easy to support. On the contrary, the definition of a REDD strategy is more challenging as: i) Reducing Emissions from Deforestation and forest Degradation (including enhancement of carbon stocks, sustainable forest management and conservation) requires tackling the main drivers of deforestation and, consequently,
changing the status quo between stakeholders, ii) REDD is about financial incentives, forest and governance, it explores
highly policy-sensitive topics and triggers discussions about land planning and benefit sharing mechanisms, and iii) its
cross-cutting nature presents complex challenges in term of sectoral coordination, effective engagement of heterogeneous stakeholders, and addressing competing interests into a coherent national REDD strategy.
2. Expansion of Agriculture Driving Deforestation in Latin America
The expansion of agriculture commodity production has been a leading driver of deforestation in many parts of Latin
America. The negative impacts have been particularly pronounced in two regions of major significance for climate
change and biodiversity conservation – the Amazon Basin and the Gran Chaco Forest – which are also, respectively, the
largest forest area globally and the second largest forest area in South America (after the Amazon Basin). This proposal
focuses on these two regions, and the two major drivers of deforestation and forest degradation there – cattle and soy
production.
There is a strong connection between deforestation and beef and soy production, with the typical pattern being that
beef production is the first major driver, with the producers financing the cost of forest clearing and initial cattle ranching by the sale of timber. Subsequently, soy producers tend to follow in the footsteps of the cattle industry to complete the process of deforestation and degradation. Then the cattle producers move further into the forest frontier,
repeating the cycle.
While soy farms cause some forest clearing directly, they have a
much greater impact on deforestation by purchasing and clearing
degraded forests, thereby displacing ranchers and slash-and-burn
farmers to further advance the forest frontier. Soy farming also
provides a key economic and political impetus for new roads and
other infrastructure development, which accelerate deforestation
by other actors.
Cattle
Beef production in Latin America has accelerated dramatically in the last 20 years, with several countries in the region
now being major global market players, notably Brazil and Argentina, with Mexico, Paraguay and Colombia demonstrating rapid growth rates. Cattle production is also the main driver of deforestation in Brazil, Mexico and Colombia
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and the second largest driver in Argentina and Paraguay. Brazil has been the largest cattle producer over the past 20
years, with cattle rearing accounting for approximately 70 percent of deforested land.
Soy
Argentina, Brazil, Bolivia, Paraguay and Uruguay are some of the largest soy producing countries globally. These five
countries combined have over 50 percent of total global production, and, with a combined total of 47 million hectares
planted, take up approximately 45 percent of the global soy production land area. Soy-related deforestation is the second most important driver of deforestation in Latin America, and is the main driver in Argentina, Bolivia and Paraguay
and the second largest driver in Brazil, in terms of hectares of deforested area. The expansion of soy plantations in the
Amazon saw tremendous deforestation in the late 1990s, thanks to the new strands of modified soybeans adaptable to
the tropical climatic conditions of the region. Some estimates of the percentage of deforestation due to large-scale and
small-scale farming, primarily soy production, in the Brazilian Amazon are 10 percent and 2 percent, respectively.
The Amazon Basin
As of 2004, deforestation from agricultural use in the Brazilian Amazon
was estimated to be occurring at a rate of nearly 20,000 square kilometers (2.0 million hectares) per year, largely due to the impact of cattle
ranchers and soy farmers. At that time, environmental and social scientists estimated that there were approximately 600,000 small-scale subsistence farmers in the Brazilian Amazon, and that they cleared about
0.6 million hectares each year to cultivate crops. The number of such
producers has likely increased significantly in the intervening years.
Large-scale commercial ranchers, though far fewer in number, were
thought to be responsible for the remaining 1.4 million hectares, or 70
percent, of deforestation each year. According to the Union of Concerned Scientists´ report ¨The Root of the Problem¨ (2011), since the
1990s, large-scale enterprises have been the main drivers of deforestation. The rates of deforestation have been highest in the states of Pará,
Mato Grosso, Maranhõa, Rondonia and Amazonas, where in 2009 the
rates were, respectively, 57.4 percent, 14.1 percent, 11.1 percent, 6.5
percent and 5.4 percent. While deforestation rates have dropped to
6,450 square kilometers between August 2009 and July 2010 - 67 percent lower than the average deforestation rate between 1996 and 2005
– they are still high and deforestation in the Brazilian Amazon is still an
enormous source of GHG emissions.
The rate of deforestation in the Colombian Amazon, which is approximately 47 million hectares and comprises 7 percent of the Amazon Forest, has also been significant. Between 2000 and 2005, approximately 94,200 ha were deforest
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ed. The current situation in the region suggests that tropical deforestation rates in the Colombian Amazon are substantially higher than those found in previous studies in the rest of the Amazon. Currently, the Amazonian departments of
Putumayo, Caquetá, Nariño, Meta, Cauca, and Guaviare face the most pronounced land use change and transformation
of their forests. Cattle ranching and agriculture are the primary causes.
The Gran Chaco Forest
After the Amazon Basin, the Gran Chaco forest is the largest ecosystem on the
American continent, stretching across large areas of northern Argentina, Paraguay, Bolivia and southern Brazil. It covers one million hectares, 61% of which is
located in Argentina.
Between 1990 and 2010, Argentina lost at total of about 5,393,000 ha, or 15.5%,
of its forest cover; this equates to an average annual loss of 269,650 ha per year,
with much of this area located in the Chaco. Similarly, between 1990 and 2010, Paraguay lost 16.9% of its forest cover,
or around 3.5m ha. Deforestation in Paraguay has inAn example of an improved production technique
that increases productivity to reduce pressure on
expansion into forests is the use of silvopastoral
systems (SPS) for beef, leather and dairy
production. SPS, which combine the use of trees
and plants within tropical livestock production
systems, are emerging in the region as a viable
means for reducing the expansion of cattle into
forests. The advantages of SPS include: increased
cattle growth rates and reduced production costs
due to the trees and plants providing an abundant
source of protein for cattle, shade and
temperature reduction; carbon sequestration;
reduced soil erosion and improved soil
management; improved water quality in rivers;
additional income to farmers from the sale of tree
products (mainly fruit); and, in the long-term,
income from high-value tropical wood species.
creased significantly in the last ten years as agriculture
production has expanded, mainly from soybeans and
cattle production. In an article from November 2009,
the World Land Trust claimed that the deforestation in
the Paraguayan Chaco is equivalent to over 1,500 football pitches a day. By the end of October 2009, some
265,000 hectares had already been lost, and Guyra Paraguay predicted that the 2009 figure would exceed
300,000 hectares.
3. Agricultural Commodity-Based
Efforts to Reduce Deforestation
There are increasingly recognized good agricultural
practices (GAP) which can increase productivity in a
sustainable manner and can help reduce pressure on
farmers to expand production. Additionally, major
companies that source agricultural commodities from
the region, and other tropical countries, are becoming
increasingly concerned about sustainability issues and
the GHG footprint of their supply chains. Some of the
leading companies are also committed to obtaining various forms of certification that demonstrate they are not sourcing commodities from recently deforested land and are also reducing GHG emissions. These initiatives now need to be
linked to the ongoing REDD efforts at a national level to ensure more effective coordination and results.
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Sustainable commodity production
There have been increased efforts by companies, national and state governments, and NGOs to apply these sustainable
commodity production practices. Global commodity roundtables, voluntary sustainable standards and certification
systems are valuable instruments to improve farm practices, and incorporate sustainability into commodity buying and
supply chain management. Certification systems have been set up to create standards that both implement GAP and
create access to new consumer markets seeking to buy agricultural products that are grown responsibly. Some of the
more prominent examples of such initiatives related to soy and cattle include the following:
 The Consumer Goods Forum’s pledge to mobilize their members’ collective resources to help achieve zero net deforestation
by 2020, acknowledging that the consumer goods industry,
through its growing use of soya, palm oil, beef, paper, etc., creates many of the economic incentives which drive deforestation
 The Roundtable on Responsible Soy Association (RTRS) Production Standards and the RTRS Chain of Custody Standard, which
include principles of environmental responsibility and good agricultural practices
Another example is the adoption of zerotillage and other more-sustainable farming
practices for soy production. The Brazilian
Farm Research Corporation (Embrapa),
states that "the use of so-called alternative
technologies, such as non-plowing farming,
could increase productivity in areas that
have already been cleared ... Proper use of
the area of the rainforest already cleared in
the Amazon could solve many problems: 20
percent of the area could produce 50 mil-
 The Brazilian Soya Working Group, which is identifying and developing key tools to implement a moratorium of illegal soy prolion tons of grains annually. The remaining
duction and sourcing
60 percent would be used to raise 100 mil The Brazilian Working Group on Sustainable Beef that has devel- lion head of cattle. And all that, without
oped principles, standards and common practices that it is pro- cutting down a single, additional tree or
moting to be adopted by its members and the beef industry burning so much as one hectare."
more broadly
 The International Leather Working Group’s recent decision to incorporate a requirement for “traceability” into
its guidelines for responsible purchasing; Group members include the makers of popular shoe brands, such as
Timberland, Nike, IKEA and Adidas
 The Rainforest Alliance’s Sustainable Beef certification standard, which was launched in 2010.
In addition, there are more local, site-specific initiatives that are beginning to gain traction. For example, a Brazilian
NGO, Aliança da Terra, has created a certification system to create the economic incentive for producers to maintain
their forest reserves, implement fire controls and conserve soils. As of 2009, 500 ranchers had signed up to participate
in this certification scheme, operating on over 6 million hectares in the states of Mato Grasso, Pará, Goias and Tocantins. More recently, Bertin and Alimentos SA – respectively Brazil’s 2nd and 5th largest beef producers, have begun marketing beef based on criteria established by Aliança de Terra.
Via the Roundtable of Responsible Soy (RTRS), a number of major agriculture commodity companies, including ADM,
Cargill and Nestle, are working to develop soy traceability systems, with some of these companies making commitments to increase the percentage of RTRS-certified soy in their supply chains (including Arla Foods, Lantmännen, Grupo
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Maggi, SLC Agricola, and APDC, Grupo Los Grobo, AdecoAgro and Aceitera General Deheza). Significantly, the Dutch
Government has recently committed to purchasing all soy imports as RTRS-certified by 2015, a total of 1,800,000
tonnes per year at current import rates.
At a national level Brazil, in 2006, implemented a soy moratorium that requires producers not to cultivate soy on land
deforested within the Amazonian biome and suppliers not to source soy from such areas. The moratorium was initially
implemented for one year, but has been renewed. More recently, there have been similar actions within the beef sector. In 2010, the governor of Mato Grosso State, extended the ban on soy to include beef produced on deforested land,
and urged others to join in the effort.
Similarly, Paraguay created the Zero Deforestation Law (Ley de Deforestación Cero) in 2004, which prohibits the conversion of native forests to agricultural areas or areas for human settlements in the Upper Parana Atlantic Forest
(UPAF).
In 2009, Argentina also passed the National Forest Law (Ley de Bosques) after more than 1.5 million citizens signed a
petition spearheaded by GreenPeace supporting this bill. The law will require each province to develop detailed maps
and to classify their forests before authorizing any more deforestation. Each proposal for deforestation will face an environmental study with a public audience of scientists, environmental groups and local community representatives.
There will also be an annual national conservation fund of $1 billion to assure that the law is being followed.
4. REDD-Focused Efforts to Engage with Agricultural Commodities
Some of the leading supporters of REDD, including UN-REDD, the World
Bank’s FCPF, and the associated Forest Investment Programme (FIP), are
all becoming more interested in engaging the agricultural sector to help
address commodity development as a driver of deforestation and forest
degradation.
In Brazil, the Amazon Fund, supported by the Government of Norway,
and more recently the German Government, is supporting a range of
projects, including the integration of forestry, agriculture and livestock
production, in the states of Acre, Pará and Mato Grosso.
Several bilateral donors are also increasing their support for innovative
approaches to address drivers of deforestation. For example, the Norwegian Government recently provided support to the Amazon Environmental Research Institute (IPAM), in partnership with World Wildlife Fund (WWF), Solidaridad and Forest Trends, to
promote programs with the soy, palm oil and sugar commodity roundtables to promote REDD. The UK’s Department
for International Development (DFID) is also in the process of issuing a major request for proposals to address the drivers of deforestation as these relate to REDD/REDD+.
While these developments are important and encouraging, there continues to be a fundamental policy and institutional disconnect between such REDD initiatives, which tend to be run by Ministries of Environment, and the agricultural
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commodity sector and related product supply chains, which are leading drivers of deforestation in the region, and tend
to be under the remit of Ministries of Agriculture.
Today, REDD readiness programs are engaging effectively with indigenous people and other forest dependent communities. But because REDD discussions are usually managed from the Ministries of Environment, the capacity to engage
effectively with other key stakeholders, such as private sector or ministries of planning, agriculture or infrastructure, is
often limited.
A specific support to engage more effectively with these other
ministries and the agriculture sectors is needed in order to be
able to tackle effectively all the drivers of deforestation.
Furthermore, REDD policies focus on the protection of forests
while agricultural policies focus on production outside forest
areas. As a result, farmers, in general, are currently not incentivized to reduce conversion of forest lands. In addition, land
use planning and the enforcement of environmental regulation, which are critical to the success of REDD, are usually inadequate to regulate agricultural expansion or production
practices.
5. Constraints and Gaps
The initiatives summarized above are leading the way to start tackling commodity expansion in order to reduce deforestation. However, there are numerous constraints that continue to hinder transforming commodity production to
reduce deforestation. Some of the more salient examples include the following:

Limited capacity, financial and logistical resources of local governments to monitor agricultural production and
enforce regulations to prevent illegal deforestation from occurring.

The risk of “leakage”. When a forest area becomes better protected and farmers stop deforesting that can lead
to the deforestation pressure being transferred to other forest areas. Such leakage can be both national and
international. For example, as efforts in Brazil to regulate soy and beef production are increasing, some companies are "exporting" their production of these crops to Paraguay, leading to increased deforestation there. In
this regard, insufficient land use planning at the landscape level combined with monitoring and enforcement of
regulations, maintains the risk that improved agricultural technology could lead to increased deforestation.

Ambiguity involving land tenure and generally weak capacity of land registries undermine efforts to conserve
forested areas, providing virtual open access to forests for agricultural producers and cattle ranchers.

To have a significant impact, tens of thousands of farmers may need to be trained in key geographic areas. Yet,
even some of the more promising approaches to agricultural extension, such as the farmer field school model,
typically reach many fewer farmers and also tend to be expensive, with costs as high as $50-100 per farmer for
a week of training. Given the limited capacity of Ministry of Agriculture extension systems to promote GAP to
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assist smallholder farmers to increase productivity on existing land, and the urgency of the situation, new systems for ensuring the financial sustainability of such training and/or new approaches to extension are clearly
needed.

Banks continue to lend to producers who act illegally on deforested areas but typically do not lend to smallholders who need capital to make investments to improve the sustainability of their production systems.
What is missing and needed
6.

Forums that engage effectively both Environment and Agriculture Ministries.

Incorporation of REDD into Agriculture Commodity initiatives and sustainable agriculture into REDD strategies.

Combined strategies for forests and adjacent farming areas.

Engaging the agricultural private sector in REDD initiative, and including REDD in sustainable agriculture
commodity roundtables and initiatives.

Initiatives that involve the agricultural sector in addressing such issues at a larger scale that current REDD
levels, including at the bi-national level, where relevant.

Large-scale landscape planning and management, including improved education about and enforcement of
environmental laws.

Initiatives that engage large-, medium-, and small-scale agriculture producers.
Rationale of this Proposal
The underlying rationale is that current efforts to engage the agriculture commodity sector in REDD initiatives are not
adequate to address what continues to be a major driver of deforestation and forest degradation in Latin America, and
that a more focused approach is required. The timing for such an approach is good, given the growing awareness within the agricultural commodity sector of the need to reduce the negative effects of its production systems and supply
chains on global climate change.
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UNDP sees combining regulations and incentives as necessary to reduce the threat of agricultural commodities to forests. Increased market demand for sustainable products is combined with strengthened national policies, land use
plans and regulations to protect forests along with REDD programs and payments that benefit farmers. This includes
supporting the following:
-
Farmers produce more on existing lands
-
Farmers are recognized and rewarded by the market and governments to produce their goods on non-forest
land
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Markets exclude products from recently deforested land
-
Forested land becomes too expensive for farmers to profitably use; this would occur through substantial fines
and penalties for intrusions into state and protected forest land
-
The government clearly designates remaining forest as protected or under a form of sustainable management
-
Private forest landowners are sufficiently incentivized to not convert to agriculture - such payments should be
equal to or greater than the opportunity cost of conversion or land sale
-
Ministries of Agriculture, with their substantial annual budgets, are engaged to support farmers and promote
sustainable production on existing lands, thereby reducing pressure to expand into forests.
7. Strategy
Goal
Reduce deforestation and forest degradation caused by the cattle and soy commodity sectors in the Amazon Basin,
focusing on Brazil and Colombia, and the Gran Chaco Forest, focusing on Argentina and Paraguay.
Approach
The approach is to link commodity production to REDD activities, plans and payments. The initiative will promote a
combination of support for improved agricultural practices, linked to land use planning and management in areas of
significant deforestation, policy development and reform, and improved monitoring and enforcement of regulations to
achieve REDD goals.
In order to ensure effective results of the proposal initiative, it will focus initially on the cattle and soy sectors in selected countries, with significant production of these commodities within the Amazon Basin and Gran Chaco Forest where
the policy environment and institutional capacity is likely to be more conducive to successful outcomes within the short
- to medium-term, namely: Brazil and Colombia in the Amazon Basin, and Argentina and Paraguay in the Gran Choco
Forest.
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The initiative will identify commodity supply chain actors that produce and or purchase commodities within the identified landscapes that are willing to adopt new practices linked to access to REDD finance, within the context of landscape planning and strengthened enforcement by government agencies. These elements together should produce an
effective combination of incentives for supply chain actors to change their practices and reduce deforestation.
Taking this large landscape-level approach, linked to a jurisdictional REDD/REDD+ methodology, should help to reduce
significantly the issue of “leakage” that often presents significant challenges to site-specific REDD projects.
This initiative will aim to connect the agriculture and REDD stakeholder involved in ongoing REDD initiatives and sustainable commodity supply chain initiatives by piloting and institutionalizing mechanisms that support the following:

Institutional coordination, notably between REDD and sustainable agriculture commodity supply chain initiatives

REDD payments that can serve as incentives to help prevent cattle and soy producers from converting forests
as they increase production

Inclusion of REDD objectives, approaches and programs into corporate sourcing policies and supply chain management. Supply chain management will then also assist with harmonizing such practices across producer
countries (e.g. soy and cattle in Brazil and Paraguay) to avoid REDD leakage issues within these commodity production areas.
In order to achieve this, the initiative will engage government to work with both large-scale and small-scale beef and
soy producers, focusing on areas where deforestation is occurring at a significant rate. UNDP believes that adopting a
comprehensive and integrated approach, with the full and active participation of the private sector and government
agencies involved in the commodity sectors and national REDD initiatives, is the key to achieving agriculture sector
transformation which will have an impact on REDD goals.
Outcomes and Activities
1.
Country-level Support for Commodity Production
i)
Strengthened land use planning to limit agricultural expansion into forests
The initiative will work at a landscape level to strengthen the effectiveness of land use planning to zone and limit agricultural expansion into forested areas targeted for conservation. Landscape planning will focuse on where the agricultural commodities can and cannot be produced - according to agreed principles, standards and practices - combined
with close monitoring and evaluation of compliance with these agreements.
To achieve this outcome, the initiative will develop the institutional linkages between REDD programmes, Ministry of
Planning, Ministries of the Environment and Ministries of Agriculture. By bringing the Ministry of Agriculture more into
the planning process it will help focus the Ministry on the issues at the frontier and help connect its extension services
to the challenges faced by farmers to comply with the land use plans.
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The land use planning will take into account national laws pertaining to conservation of forest. This will include protected areas, sustainable forest management areas, riparian strips and set-a-sides. For example in Paraguay there is a
law requiring 25% habitat set-a-side on farms. In the Chaco with 20,000 hectare farms this equates to 5,000 hectares of
dry forest to be conserved, which are currently being cleared. So land use on large farms will be an important component of forest conservation for landscape level land use plans.
The land use planning can also bring in the local government to assist in enforcement of the plans. The enforcement of
land use plans will contribute to reducing leakage and allow good agricultural practices and increased productivity to
occur without concurrent deforestation.
ii)
Support for National Commodity Platforms
The initiative will establish National Commodity Platforms based on UNDP’s innovative methodology (see UNDP
Platform Guidance Document). The Platforms will promote multi-stakeholder dialogue to promote sustainable commodity production at scale. The Platforms will be hosted in the Ministry of Agriculture and include participation of all
relevant Ministries. The Platform will be the vehicle to bring REDD into the agricultural arena. Currently, the existing
certification and international commodity roundtable initiatives are not playing this more intensive stakeholder engagement role at the national level.
The commodity platforms will help integrate leading agricultural commodity sector actors into ongoing national REDD
planning and implementation processes, and also to integrate REDD stakeholders into national initiatives to promote
sustainable commodity production and land use planning (see outcome i). Such Platforms will support more focused,
site-specific, and long-term facilitated dialogues for a broad array of actors, most probably a sub-set of those already
involved in national REDD and agriculture commodity supply chain forums, and those currently under-represented in
those, notably smallholder producers. The stakeholders involved will include: national and local governmental entities,
the private sector and industry associations, certification bodies, financial institutions, research institutes, indigenous
peoples, NGOs and civil society, donors, producers and representatives of rural communities.
UNDP will need to determine on a case-by-case basis whether the formation of new national commodity platforms is
warranted, or whether it would be more effective to utilize existing national REDD or sustainable agriculture initiatives
for this purpose. The initiative will also assess the benefit of setting up sub-national Platforms such as State or Provincial level.
iii)
Strengthened national extension systems
The initiative will work with government extension agencies to expand their focus beyond conventional agriculture to
promote GAP in priority landscapes at the agricultural frontier. The extension systems themselves will also be assessed
and systemic and institutional capacity strengthened. Private sector extension officers will be connected to and coordinated with Ministry of Agriculture extension services to provide farmers with more efficient public-private extension
services. Such training to be provided to farmers will include: GAP, REDD, watershed management and improved market access. The focus of such work will be in areas identified by national governments and other stakeholders for the
implementation of REDD activities.
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iv) Increased economic incentives for producers to reduce deforestation
To complement the land use planning and agricultural training the initiative will also work with the relevant institutions to provide an array of economic incentives to farmers to reduce their interest to expand into forested areas.
These will include:





Public policy based incentives such as subsidies on equipment and technology to improve their production
practices. This will be particularly relevant to sustainable cattle and the introduction of silvopastoral systems.
Increased fines for illegal activity in protected forest areas.
Water payments to producers connected to the conservation of forests in important upper watershed
areas
Connection of market buyers for certified products to producers, through the Platform. This can also include innovative marketing campaigns to promote “deforestation free” commodities.
Improved access by producers to credit facilities for loans to finance the costs of adopting GAP. This will
be done through developing partnerships with selected national financial institutions – both commercial
and government credit programmes. This will include training financial institutions on risks of financing
deforestation and economic benefits of certification.
2. Engagement of Cattle and Soy Supply Chain
Management for REDD
This component will engage major multinational companies and domestic buyers that purchase beef, leather and
soy from the selected countries in order to influence producer and processor activity. This engagement will build
on UNDP’s working relationships with a number of the major companies involved in these commodity sectors, such
as Cargill, ADM, Kraft, Nestle, Unilever, IKEA, Nike, Adidas,
etc. A central component of the proposed work will be to
ensure that smallholders in the selected landscapes are fully integrated into these purchase agreements and obtain
significant benefits as a result.
As part of this outreach, the proposed initiative will disseminate information on sustainable commodity production
and REDD to the participating companies, including existing UNDP corporate partners, and smallholders. The expectation is that the data generated will show increased costs from environmental degradation and security of supply and
other risks associated with deforestation, thereby encouraging corporate buyers to offer various incentives and support to producers in their efforts to shift to sustainable commodity production practices.
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In addition to changing their current, business-as-usual practices, the initiative will seek to assist participating companies, which will include commodity traders, processors and retailers, to develop corporate REDD policies, and ideally,
over time, to invest in supporting REDD projects and activities. To help promote these ideas, the initiative will hold several regional conferences, on at least an annual basis, to showcase the benefits and lessons learned by leading private
sector proponents.
As part of achieving this outcome, the initiative would hold a series of regional workshops, at least on an annual basis,
to highlight the issues and opportunities and to showcase examples of progress being made by various stakeholders.
3.
Knowledge Management on Agriculture Commodities for REDD
Knowledge regarding relevant GAP, climate-smart agriculture, improved agriculture extension services, commodity
certification, landscape planning and REDD activities in other countries and regions will be shared with participating
producers and other interested actors via the creation of a
website and web tools, such as open access wikis. These
sites and tools will be designed primarily to educate and
support government, producer association and private sector agricultural extenseion personnel and to reach smallholders. They will be developed and will be based on experience of other UNDP-supported community websites, an
example of which is provided in the box below.
In addition, the initiative will convene a regional workshop, involving cattle, soy and other relevant commodity supply
chain actors from Amazon Basin countries and Latin America more broadly to share the experiences and achievements
of the proposed activities and to help set the stage for the future expansion to include other countries and commodity
sectors in the region.
8. UNDP’s Comparative Advantage
UNDP is playing a leading role in the implementation of UN-REDD globally and in the region, including three of the focal
countries for this proposed initiative. This proposal will be implemented in close coordination UN-REDD, and seek to
complement its soon-to-be launched private sector strategy for Latin America.
In addition, in 2009, UNDP launched the Green Commodities Facility to scale up sustainable commodity production,
with government and private sector engagement. The Facility manages a global portfolio of national-level commodityfocused programmes and platforms that remove barriers and institutionalize systemic approaches and resources for
scaling up the production of sustainable commodities. This includes addressing environmental externalities within the
supply chain, strengthening financial sustainability for technical assistance, reforming policy to level the production
playing field and incentivizing sustainability through engagement of the private sector buyers of the commodities.
UNDP National Commodity Platforms under development include:
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
Pineapple-Costa Rica

Palm oil in Indonesia

Cocoa in Ghana and Cote d´Ivoire

Cocoa in Dominican Republic

Coffee in Colombia and Honduras

Dairy in Colombia
UNDP provides extensive support for other projects in the region, and globally, that have an agriculture and forestry
focus, including: CONAFOR/UNDP Forestry Project in Mexico, and the Biodiversity Coffee Project in LAC. UNDP is centrally involved in REDD efforts in Latin America and the Caribbean (LAC) by acting as Delivery Partner of the FCPF in several countries in LAC, and by working with other REDD initiatives, such as in Mexico (MRV project financed by Norway),
Guyana (GRIF) and other GEF funded projects. UNDP has a strong track record working with companies at the country
level, and can bring this expertise to connect the companies and their supply chain producers to REDD programmes.
One pilot project UNDP has developed is addressing deforestation from soy and cattle in Paraguay which is submitted
to the GEF for $5m funding. It is in partnership with Solidaridad. This can be co-financing for the project being presented here.
9. Timeframe and Indicative Budget
Proposed Timeframe:
5 Years
Indicative Budget:
US$40 million
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