The document discusses trends, current situations, and policy options for reducing rural poverty in the São Francisco River Basin region of Brazil. It provides an overview of population trends, poverty levels, agricultural practices, water availability, and other driving forces in the region from 1991 to present. The presentation then examines problems like persistent poverty, water conflicts, and environmental impacts. It proposes that public policy could help manage agriculture, reduce poverty, and models the impacts of potential policy options like water pricing and restrictions. Data sources, economic models, and knowledge pathways are also referenced.

1. The São Francisco River Basin:
Trends, Current Situation, and Policy
Options for Reducing Rural Poverty
O ti f R d i R lP t
Steve Vosti
&
SFRB Team
February 2008 UCD/Embrapa

2. Presentation Overview
• Trends and Driving Forces
– Population, Poverty, Agriculture, Market Structure
• P bl
Problems
– Persistent poverty
– ‘Local’ water conflicts
– Environmental flows
– Deviations from ‘average’
• Role for Public Policy Action
– Managing agriculture
– Reducing persistent poverty
– ‘What If’ Scenarios
• Water pricing
p g
• Water use restrictions
• Data Sources, Hydro-Economic Models, Value Added to CP
• Knowledge Pathways and Impact Pathways
UCD/Embrapa

3. Policy Instruments that Can Affect
Productivity and Profitability
• Assets and Asset Quality
– Land, water, financial capital, market access,
knowledge
• Relative Prices
–I
Inputs
t
• water
– Products
UCD/Embrapa

4. Three Worlds of the WDR 2008
Source: World Development Report 2008 UCD/Embrapa

5. Changing Market Structure
UCD/Embrapa

6. Soil Types and Distance to Market
UCD/Embrapa

7. Population
Total Population 1991 2000 Change % change
Change in the
1991-2000
Total for SFRB 14,059,006 15,723,771 1,664,765 11.84% SFRB
Alagoas 668,980 705,851 36,871 5.51%
Bahía 2,712,391 2,897,898 185,507 6.84%
Distrito Federal 1,601,094 2,051,146 450,052 28.11%
Goiás 147,656 173,079 25,423 17.22%
Minas Gerais 6,971,994 7,885,366 913,372 13.10%
Pernambuco 1,568,446 1,591,141 22,695 1.45%
Sergipe 229,819 260,180 30,361 13.21%
Rural 1991 2000 Change % change
Population 1991-2000
Total for SFRB 4,445,920 3,691,016 -754,904 -16.98%
Alagoas
g 409,421
, 400,418
, -9,003
, -2.20%
Bahía 1,579,751 1,442,275 -137,476 -8.70%
Distrito Federal 85,205 89,647 4,442 5.21%
Goiás 50,576 37,650 -12.926 -25.56%
Minas Gerais 1,256,533 809,764 -446,769 -35.56%
Pernambuco 842,515 700,970 -141,545 -16.80%
Sergipe 124,703 131,202 6,499 5.21%
UCD/Embrapa

8. Aging of the Rural SFRB Population
Shifting Demographic Profile
12.00
12 00
10.00
ipios
Proporti of Munici
8.00
6.00
ion
4.00
2.00
0.00
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
26%
27%
28%
29%
30%
31%
32%
33%
34%
35%
55+ Dependency Ratio -- 1991 55+ Dependency Ratio -- 2000
UCD/Embrapa

9. Agriculture in the SFRB -- 1991
UCD/Embrapa

10. Agriculture in the SFRB -- 2004
São Francisco River Basin Harvested Specialty
Harvested Grains Crops, 2004
2004
Petrolina
Harvested Area (ha) Harvested Area (ha)
at Município Level at Município Level
None None
1 - 2,000 1 - 2,500
Montes Claros 2,001 - 5,000 2,501 - 10,000
5,001 - 10,000 10,001 - 50,000
10,001 - 20,000 50,001 - 200,000
20,001 - 431,441 200,001 - 401,980
Sete Lagoas Scale 1:9,000,000
Ribeirao das Neves 0 50 100 200 300
Belo Horizonte
Betim Kilometers
Divinopolis
Lambert Azimuthal Equal Area
Projection, WGS-84.
Map by J A Young, 12 September 2007
UCD/Embrapa

11. Frequency Distribution of Corn Production
(in tons/ha)
60
Changes in Yields
g
40
ount
Co
20
0
1 2 3 4
Unweighted Yields in 1991
Frequency Distribution of Corn Production
(in tons/ha)
60
Count
40
20
0
0 2 4 6
Unweighted Yields in 2004
UCD/Embrapa

12. Water Availability
UCD/Embrapa

13. Water Productivity in Corn
y
UCD/Embrapa

14. Water Productivity
UCD/Embrapa

15. Water Conflicts in the SFRB
Source: ANA 2007
UCD/Embrapa

16. Poverty in the SFRB
UCD/Embrapa

17. Extreme Poverty in the SFRB
2003 Rural Extreme Poverty-
Poverty
Poverty Rural Poverty Rural
% of % of
Rural Rural
Absolute Pop Absolute Pop
Total for SFRB 1,012,095 28% 345,677 9%
Alagoas 163,307 41% 70,400 2.6%
Bahía 328,313 23% 139,941 9.7%
Goiás 7,792
7 792 21% 2,846
2 846 7.5%
7 5%
Minas Gerais 178,006 22% 43,214 5.3%
Pernambuco 258,004 37% 53,484 7.6%
Sergipe 48,635 37% 19,603 14.9%
UCD/Embrapa

18. Spatial
Distribution of
Rural Poverty
UCD/Embrapa

19. Spatial Clusters of Rural Poverty in the SFRB
Cluster 1
Cluster 3
Cluster 2
Not Significant
Low - Low
High-High
High-Low
Low-High
UCD/Embrapa

20. Water-Poverty Links: A Visual Inspection
UCD/Embrapa

21. Possible Water-Poverty Links
y
UCD/Embrapa

22. Next Steps for Small-Scale
Farmers?
• Scale Economies Loom Large
• Shifting Product Mix Will Likely Be Required
• Such Shifts Will Require Private Investments
• Capital, knowledge, market development
UCD/Embrapa

23. Some Types
of Variability
Matter
Greatly
Yield Variation Price Variation
UCD/Embrapa

24. Effects of Alternative Policy Options –
A Quick Look Using LUS Analysis
Q g y
UCD/Embrapa

25. A Basin-Wide View of the Effects of
Agricultural E pansion
Agric lt ral Expansion
Petrolina
Barreiras
Paracatu
Rio Paranaiba
UCD/Embrapa

26. A Basin-Wide View of the Effects of
Agricultural Expansion, cont.
g p ,
Value of Total Output Total Increase in Employment
(2006 R$) (person-months/year)
Barreiras R$ 36,523,637 2,347
Petrolina R$ 192,853,884 14,302
Paracatu R$ 41,988,915
$ 7,401
Rio Paranaiba R$ 3,675,946 192
Barreiras
Petrolina
P li
Paracatu
Rio Paranaiba
UCD/Embrapa

27. A Basin-Wide View of the Effects of
Baseline
Agricultural Expansion, cont.
g p ,
8000
.
6000
Discharg (m3 s-1)
4000
2000
ge
0
1 2 3 4 5 6 7 8 9 10 11 12
Month
Baseline
B li
8000
.
6000
Discharge (m3 s-1)
4000
2000
0
1 2 3 4 5 6 7 8 9 10 11 12
Month
UCD/Embrapa

28. What Happens If Policymakers Say ‘No’ to
Increased Irrigation
10% Reduction 20% Reduction
P e rc e n t C h a n g e in Ir rig a te d L a n d fro m a 1 0 % R e d u c tio n in P e r c e n t C h a n g e in Irrig a te d L a n d fro m a 2 0 % R e d u c tio n in
W a te r A v a ila b ility W a te r A v a ila b ility
0 0
1 1
-1 -2
-2 B o n fin o p o lis d e M in a s B o n fin o p o lis d e M in a s
U nai -4
Unai
-3 C a b e c e ira s C a b e c e ira s
-6
6
-4 C ris ta lin a C ris ta lin a
F o rm o s a F o rm o s a
-8
-5 B ra s ilia B ra s ilia
-6 -1 0
-7 -1 2
30% Reduction 40% Reduction
P e rc e n t C h a n g e in Irrig a te d L a n d fr o m a 3 0 % R e d u c tio n in P e rc e n t C h a n g e in Ir rig a te d L a n d fro m a 4 0 % R e d u c tio n in
W a te r A v a ila b ility W a te r A v a ila b ility
0 0
1 1
-2 -2
-4 -4
B o n fin o p o lis d e M in a s B o n fin o p o lis d e M in a s
Unai -6
-6 U nai
C a b e c e ira s -8 C a b e c e ira s
-8
C ris ta lin a -1 0 C ris ta lin a
-1 0 F o rm o s a F o rm o s a
-1 2
1
-1 2 B ra s ilia B ra s ilia
-1 4
-1 4 -1 6
-1 6 -1 8
UCD/Embrapa

29. Changes in Crop Allocation Associated with
a 10% Reduction in Water Availability (%)
C r i s t a li n a
B o n f i n o p o li s d e M i n a s c it r u s c it r u s
c o ffe e c o ffe e
3
c o rn c o rn
c o tto n 2 c o tto n
1 .5 d r ie d b e a n s d r ie d b e a n s
1
1 g r a in s g r a in s
0
0 .5 h o r t ic u lt u r e h o r t ic u lt u r e
1
m ani c
io -1 m ani c
io
0
o r c h a r d f r u it s -2 o r c h a r d f r u it s
-0 .5 1
o th e r te m p o ra ry o th e r te m p o ra ry
-3
-1 o th e r p e rm a n e n t o th e r p e rm a n e n t
-1 .5 r ic e -4 r ic e
-2 soybeans -5 soybeans
sugar sugar
-2 .5 -6
v e g e t a b le s
l v e g e t a b le s
l
Unai F o rm o s a
c it r u s c it r u s
c o ffe e c o ffe e
3 10
c o rn c o rn
2 c o tto n c o tto n
0
d r ie d b e a n s 1 d r ie d b e a n s
1
g r a in s -1 0 g r a in s
0 h o r t ic u lt u r e h o r t ic u lt u r e
1 -2 0
m a n io c m a n io c
-1
o r c h a r d f r u it s o r c h a r d f r u it s
-3 0
-2 o th e r te m p o ra ry o th e r te m p o ra ry
o th e r p e rm a n e n t -4 0 o th e r p e rm a n e n t
-3
r ic e r ic e
-4 soybeans -5 0
soybeans
-5 sugar sugar
-6 0
v e g e t a b le s v e g e t a b le s
UCD/Embrapa
C

30. Changes in Water Use Associated with a
10% R d ti i W t A il bilit (10%)
Reduction in Water Availability
B o n fin o p o lis d e M in a s C r is ta lin a
c it r u s c it r u s
c o ffe e c o ffe e
0 0
c o rn c o rn
1 1
-2 c o tto n -5 c o tto n
d r ie d b e a n s d r ie d b e a n s
-1 0
-4 g r a in s g r a in s
h o r t ic u lt u r e
c t -1 5 h o r t ic u lt u r e
c t
-6
m a n io c m a n io c
-2 0
-8 o r c h a r d f r u it s o r c h a r d f r u it s
o th e r te m p o ra ry -2 5 o th e r te m p o ra ry
-1 0 o th e r p e rm a n e n t o th e r p e rm a n e n t
-3 0
r ic e r ic e
-1 2 -3 5
soybeans soybeans
-1 4 sugar -4 0 sugar
v e g e t a b le s v e g e t a b le s
U nai F o rm o s a
c it r u s c it r u s
c o ffe e c o ffe e
0 3
c o rn c o rn
1
-5 c o tto n c o tto n
2
d r ie d b e a n s d r ie d b e a n s
-1 0
g r a in s g r a in s
1
-1 5 h o r t ic u lt u r e h o r t ic u lt u r e
m a n io c m a n io c
-2 0 0
o r c h a r d f r u it s o r c h a r d f r u it s
1
-2 5 o th e r te m p o ra ry o th e r te m p o ra ry
-1
o th e r p e rm a n e n t o th e r p e rm a n e n t
-3 0
r ic e r ic e
-2
-3 5 soybeans soybeans
-4 0 sugar sugar
-3
v e g e t a b le s v e g e t a b le s
UCD/Embrapa

31. What Happens If Policymakers Charge for Water?
(20% Increase in Water Prices)
Bonfinopolis de Minas
p Brasilia
citrus
it citrus
it
coffee coffee
0.8 1
corn corn
0.6 cotton cotton
0.5
0.4 dried beans dried beans
0.2 grains 0 grains
horticulture 1 horticulture
0
-0.5
-0.2
02
-0.4
R1 manioc
orchard fruits -1
manioc
orchard fruits Crop Allocation
other temporary other temporary
-0.6 other permanent -1.5 other permanent
-0.8 rice rice
-2
-1 soybeans soybeans
-1.2 sugar -2.5 sugar
vegetables vegetables
Bonfinopolis de Minas Brasilia
citrus citrus
coffee coffee
0 0
corn corn
-1 cotton -2 cotton
dried beans dried beans
-2 -4
grains grains
-3
-4
4
horticulture
manioc
-6
-8
8
horticulture
manioc Water Use
orchard fruits orchard fruits
-5 other temporary -10 other temporary
other permanent other permanent
-6 -12
rice rice
-7 soybeans -14 soybeans
-8 sugar -16 sugar
vegetables vegetables
Bonfinopolis de Minas Brasilia
citrus citrus
coffee coffee
0.5 2
corn corn
cotton cotton
0 0
dried beans dried beans
grains -2 grains
-0.5
horticulture horticulture
-4
-1
manioc
orchard fruits
other temporary
-6
manioc
orchard fruits Employment
Emplo ment
other temporary
-1.5
other permanent -8 other permanent
rice rice
-2
soybeans -10
soybeans
-2.5 sugar sugar
-12
vegetables vegetables UCD/Embrapa

32. What If It Doesn’t Rain? f1= large, div+
f2= large, div-
(40% Reduction in Rainfall) f3= medium, div
,
f4= small, div
% Changes in Land Allocation
pasture corn dried beans soybeans limes vegetables orchards wheat sorghum
80
60
40
20 f1
0
f2
-20
f3
-40
-60 f4
-80
-100
-120
corn dried beans limes vegetables orchards wheat
0
-5
% Changes in -10
f1
-15
Total Water Use f2
-20
f3
-25
f4
-30
30
-35
-40
UCD/Embrapa

33. What If It Doesn’t Rain? f1= large, div+
f2= large, div-
(40% Reduction in Rainfall) f3= medium, div
,
f4= small, div
Changes in Applied Water, by Source
f1 f2 f3 f4
60000
40000
20000
0
-20000
sw
-40000
40000
gw
-60000
-80000
-100000
-120000
-140000
f1 f2 f3 f4
0
-10
10
-20
-30
-40
% Changes in -50
50
Farm Profits -60
-70
UCD/Embrapa

34. What If It Doesn’t Rain? f1= large, div+
f2= large, div-
(40% Reduction in Rainfall) f3= medium, div
,
f4= small, div
Changes in Use of Hired Labor , by Crop
dried
pasture corn beans soybeans limes vegetables orchards wheat sorghum
80
60
40
20 f1
0
f2
-20
f3
-40
-60 f4
-80
-100
-120
f1 f2 f3 f4
10
0
-10
-20
-30
-40
-50
% Changes in Hired Labor -60
-70
Use, by Farm Type -80
-90
UCD/Embrapa

35. Knowledge Pathways and Impact Pathways
Min. of Ag. Agents of Change
Embrapa CPWF
Embrapa
ANA Research Centers BFPPolicy
Central
Policy
y g
Water Mgmt. Policy
y
OECD ‘Placeholders’ ‘Placeholders’ ‘Placeholders’
‘Pl h ld ’
Policy
‘Placeholders’
IEB -- NGOs
Policy
‘Placeholders’
Placeholders
Embrapa HQ
Policy Core Team IPEA
‘Placeholders’ •Research Policy
•Training
g ‘Placeholders’
•Outreach
Research Collaborators
Brazilian Embrapa Research NGOs Farmers International
Universities Centers • Cooperatives Research
• Brasilia • Savannah Community y
• Petrolina •Coastal zone
• Minas Gerais •Corn and sorghum
• Ceara •Semi-arid
UCD/Embrapa

36. Muito Obrigado!
UCD/Embrapa