AGRICULTURE GLOBAL PRACTICE NOTE Lesotho Climate-Smart Agriculture Investment Plan Lesotho’s agricultural system faces a growing number of climate-­ related vulnerabilities with droughts, floods, pests, and extreme temperatures occurring more frequently. In response, the Govern- ment of Lesotho is collaborating with the World Bank to integrate climate change into the country’s agriculture policy agenda through the Lesotho Climate-Smart Agriculture Investment Plan (CSAIP). AGRICULTURE GLOBAL PRACTICE NOTE—DECEMBER 2019  10076_Lesotho_Climate.indd 1 12/18/19 11:28 AM FIGURE 1  Projected impact of climate change on major Lesotho crops. 20 Percent change in yield 10 0 –10 Beans Maize Orchards Potato Sorghum Wheat Vegetables The Lesotho CSAIP aims to identify climate-smart Lesotho’s CSAIP is the outcome of a partnership agriculture (CSA) investments that offer the greatest between the Government of Lesotho and the World potential to transform Lesotho’s agriculture into a more Bank. The CSAIP represents a commitment by the World productive, climate-resilient, and low-emissions sector. Bank’s Food and Agriculture Global Practice under the CSA is an approach for transforming and reorienting Eighteenth Replenishment of the International Develop- agricultural systems to support food security under the ment Association (IDA18) to support the development of new realities of climate change. CSA comprises three country-level CSA strategies and investment plans. The pillars: increasing productivity, enhancing resilience CSAIP builds on existing strategy documents, including and adaptation, and reducing greenhouse gas emis- Lesotho’s Second National Strategic Development Plan sions from the agriculture sector compared to past (NSDP II), and Lesotho’s international climate commit- trends. The CSAIP provides evidence that shows that ments articulated in its Nationally Determined Contri- the adoption of CSA offers multiple wins: increased bution (NDC). Through a process that combines several productivity and incomes; enhanced food security and modeling approaches, and consultations with stakehold- dietary diversity; reduced impacts of climate change on ers in the public and private sectors, civil society, and agricultural produce; and improved commercialization, farmer groups, the CSAIP evaluates context-­ specific employment opportunities, and rural livelihoods. The opportunities for scaling up CSA in Lesotho. CSAIP shows that CSA can also reduce soil erosion, generate carbon sequestration, conserve biodiversity, The current agricultural production pathway in Lesotho and provide other public goods that accrue to society— focuses on extensive animal grazing and expansion of well beyond the farmers engaged in market transac- agricultural cropland to keep pace with food demand for tions alone. the population. The pathway is characterized by agricul- tural support for a monoculture cropping system dom- inated by maize. This pathway is largely unsustainable and depletes the land resources on which production relies on over time. The CSAIP offers two complemen- tary pathways for scaling up CSA in Lesotho. The first is the commercialization pathway that entails focusing on commodities for which the country has distinct compara- tive advantage like horticulture, potato, and aquaculture; developing the country’s irrigation to its full potential; and developing linkages that connect smallholders to export and domestic markets. The second pathway is the resil- ient landscape pathway, that combines modern scientific practices such as improved crop varieties with the tradi- tional Machobane farming system, a farming system that 2  AGRICULTURE GLOBAL PRACTICE NOTE—DECEMBER 2019 10076_Lesotho_Climate.indd 2 12/18/19 11:28 AM TABLE 1  Comparison of indicators under Commercialization and Resilient Landscape. Indicators Commercialization Resilient Landscape Net household income (US$ per year) 1,233 698 Increase in crop yields over historical (%) 60 70 Cropland area (ha) 132,247 153,482 Livestock production (ton) 38,849 45,765 Erosion control: Gross erosion (Million ton (Mt) per year) 39 35 Food availability1 (kcal/capita/day) 675 649 Export potential moderate none GHG mitigation: carbon balance, ton carbon dioxide −2,521,976 −26,228,494 equivalent (tCO2-eq) Job creation (number of stable jobs) 39,378 27,682 Economic internal rate of return, EIRR (%) 32 13 Carbon benefits (US$ million) 2−17 36−282 EIRR with carbon benefits (%) 32−34 16−73 Financial cost (US$ million) 208 268 Blue color indicates that a pathway performs better on an indicator; red color indicates otherwise. combines the use of crop rotation, relay cropping, and finance which can come from a variety of sources intercropping practices with the application of manure including the United Nations Framework Convention on and plant ash to conserve soil moisture and replenish Climate Change (UNFCCC) funding mechanisms, multi- soil fertility. The resilient landscape pathway primarily lateral and bilateral funds, national and regional climate focuses on investing in sustainable landscape and inte- funds, and private-sector investments. The resilient grated catchment management, and strengthening local landscape pathway is costlier for the public sector, but institutions to enhance landscape resilience, that is, the is also easier to implement. It is more tailored toward ability of the landscape to sustain desired ecological locally adapted technologies that the average small- functions, native biodiversity, and critical landscape pro- holder farmer in Lesotho can practice. cesses over time in the face of changing conditions and multiple stressors. Commercialization can be prioritized largely in lowlands and foothills—the fertile and most productive parts The commercialization pathway is often more prof- of Lesotho that are suitable for orchards, vegetables, itable; it requires larger farm sizes (greater than wheat, potato, and peas. Resilient landscape can be 2.5 hectares), takes up less land for the same amount emphasized largely in the highlands that are suitable for of production, creates more jobs, produces more food potato, wheat, peas, and orchards. The highlands would calories, and offers Lesotho the potential to export hor- also benefit from afforestation and farmer-managed nat- ticulture, potato, and vegetables. It also requires strong ural regeneration to restore and replenish less fertile market-­ oriented agricultural policies for it to be suc- land (Figure 2). cessful (Table 1). Furthermore, commercialization would require developing Lesotho’s agricultural value chains and ensuring the proper functioning of land markets. On the other hand, a resilient landscape pathway is often more effective in controlling land degradation and delivers about ten times more carbon benefits com- pared to commercial agriculture. Thus, compared to the commercialization pathway, the resilient landscape pathway could potentially benefit more from climate 1  This indicator measures food calories derived from national agricul- tural production. Lesotho’s major food calorie requirements are ob- tained from agricultural imports. AGRICULTURE GLOBAL PRACTICE NOTE—DECEMBER 2019  3 10076_Lesotho_Climate.indd 3 12/18/19 11:28 AM FIGURE 2  Lesotho Land Versatility Map. interventions implemented as part of a comprehensive, long-term input promotion strategy that encourages market development and private investment in fertilizer and other agricultural inputs, are vital. An example is the electronic input voucher system that local micro- finance institutions or agricultural credit cooperatives can use to qualify farmers for loans and issue cash or credit vouchers that can be used to redeem inputs such as seeds or fertilizers. Strengthening agricultural research and extension. There is a need to strengthen research and establish partnerships with international research institutes to develop high-yielding, stress-tolerant, climate-ready varieties. Agricultural extension services should be upgraded to catalyze the agricultural innovation pro- Agricultural cess; improve the CSA knowledge system; facilitate Versatility Index access to information, knowledge, and expertise; and Least versatile provide technical advice to farmers. Moderately versatile Versatile Highly versatile Building capacity to access climate finance. Lesotho faces a financing gap in the agriculture sector with low More versatile soils are more fertile, productive, and suitable for a capacity to access climate finance. Critical areas that variety of crops. need capacity development include identifying funding The effective scaling up of CSA in Lesotho will require gaps and needs; assessing public and private financing addressing a number of adoption barriers, including options; developing payment for ecosystem services limited implementation capacity, insufficient access to programs; developing bankable investment plans, proj- inputs and credits, and insufficient agricultural research ect pipeline, and financing propositions; and develop- (Figure 3). ing financially viable opportunities for effective private sector engagement. Some of the policy actions to support effective scaling up of CSA identified in the CSAIP include: CSA could bring about sustainable improvement in the lives and livelihoods of Lesotho’s smallholder farmers. Realigning agricultural support to promote CSA. It is Protecting smallholder farmers from falling into poverty vital that government policies and investments address in the event of climatic shocks and giving them the tools the demand and supply sides of inputs critical to CSA to thrive are important objectives in the partnership by building sustainable, private sector–led input mar- between the Government of Lesotho and the World kets. Market-smart subsidies, that is, time-bound Bank. FIGURE 3  Impact of factors on adoption of CSA in Lesotho. Limited implementation capacity (awareness, skill, Inadequate training, and education), 75% Research, 65% access to Land tenure markets, 54% issues, 54% Inadequate access to finance, Inadequate access to infrastructure including inputs and credits, 71% Public policy, 63% (roads, storage facilities, ICT), 54% Importance of factors for adoption was first rated as 1 = Very low; 2 = Low; 3 = Moderate; 4 = High; and 5 = Very high. Thereafter, scores for each factor were averaged over the number of stakeholder respondents and expressed as a percentage. Higher percentages indicate that it is more critical and urgent to address a factor for effective CSA implementation in Lesotho. Internet: www.worldbank.org/agriculture   Twitter: http://twitter.com/wb_agriculture 10076_Lesotho_Climate.indd 4 12/18/19 11:28 AM