Strategies for Transforming Landscapes_22022021_English_VF.pdf

This presentation is made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of this presentation are the sole responsibility of INVEST, implemented by DAI, and do not necessarily reflect the views of USAID or the United States Government.

STRATEGIES FOR TRANSFORMING LANDSCAPES IN MEXICO

Communities as Agents of Sustainable Change

February 2021

Feb 2021 2

Collaboration

Optimizing communities’ wellbeing and livelihoods through a landscape and market approach.

Objectives of reducing deforestation and GHG (greenhouse gas) emissions.

Activity Objectives Identified by USAID Mexico The project team identified a landscape approach as a methodology for achieving the combined objectives of community wellbeing, GHG emission reduction, reducing deforestation, and collaboration among diverse stakeholders.

1. Interested stakeholders come together for cooperative dialogue and action in a multi-stakeholder platform.

2. They undertake a systematic process to exchange information and discuss perspectives to achieve a shared understanding of the landscape conditions, challenges and opportunities.

3. This enables collaborative planning to develop an agreed action plan.

4. Stakeholders then implement the plan, with attention to maintaining collaborative commitments.

5. Stakeholders also undertake monitoring for adaptive management and accountability, which feeds into subsequent rounds of dialogue, knowledge exchange and the design of new collaborative action.

6. Success is catalyzed by good governance and access to adequate and sustainable finance and markets.

Key Elements to Achieve Integrated Landscape Management

Source: The Little Sustainable Landscapes Book

Landscape regeneration is an opportunity to increase productivity and restore eco-social health

Source: SVX Mexico

Landscape potential

Social capital

Biodiversity and

Ecosystem services

Rule of Law

Productive Diversification

Financing and

Potential Markets

Traditional knowledge

Enabling Conditions

Local Governance

Valuation of ecosystem services

Development of community enterprises

Culture of Association

Gender equity and inclusion of young people

Biodiversity Conservation = improved livelihoods

Public Awareness of Deforestation

Mexican Context: Potential & Conditions of a Sustainable Landscape

Feb 2021 USAID Landscape Focus Groups 6

Recommended Ingredients for Managing Complex Change

USAID developed a consultation process during February 2021. Consultation included meetings with USAID partners, other donor agencies and 5 focus groups with a variety of stakeholders to inform its new Activity.

– Chiapas Focus Group

– Selva Maya / Calakmul Focus Group

– Oaxaca Focus Group

– Focus Group of global organizations operating in a landscape approach.

– Market Catalysts Focus Group

Focus Groups

Feb 2021 USAID Landscape Focus Groups

Feb 2021 USAID Focus Groups 2021 8

Focus Groups’ Recommendations

Challenges Identified in the Landscapes Market failures Government failures Governance

Illegal activities Financing Market Access

Intermediaries retain most of the value

Illegal trafficking of drugs, arms, and people

Atomized vision by production chain.

Lack of coordination of PP in the landscape

Lack of trust between the parties

Structural barriers to access to financing for ejidos and communities

Incentives that promote land-use change

Women and youth excluded from participation, construction, and decision-making

Lack of accessibility of producers to markets and logistics and distribution challenges

Dependence on subsidies and little local business and finance capacities.

Weakening of the governance bodies of ejidos and communities due to a pandemic.

Insecurity + Climate

Change and ecological risks

Markets

Shared understanding and public policy influence

Effective implementation Finance

Governance and Multi Stakeholder platform Monitoring

Business strengthening of all cooperatives and community companies to meet corporations’ requirements.

Generate multi-scale territorial interventions to invest in a systemic way, serving value chains with easy access to markets.

Change agents that remain in the territory in the long term, to generate transformations at the landscape scale

Creation of resilient funds and strengthening of Non-Banking Financial Institutions to improve rates for final borrowers

Governance but with a focus on the involvement of women and youth

Generate direct impact and indicators to measure progress at the landscape scale

Encourage associativity in the form of community owned enterprises to achieve common objectives, economy of scale, skills, and potential.

Integration with the private sector, since the public approach seeks a community company covers a significant extension of the value chain, which is unrealistic and achievable.

Long-term vision, against project vision, considering all process.

Design adequate financing and reduce structural barriers for ejidos, communities, women, and youth in a differentiated and intentional way.

The organization and local governance provide a fertile ground that allows systemic interventions and promotes climate and social resilience.

Valuation of ecosystem services and specify the link between Biodiversity Conservation and GHG mitigation.

Coupling incentives with technical assistance towards business development to achieve added value and biodiversity conservation.

It is essential to change the incentives and direct them effectively to offset the opportunity cost towards land use for agricultural and livestock activities.

Generate strategic alliances between the three levels of government, civil society, and the private sector.

Blended finance needed:

No single layer of finance would work for whole landscapes: Interweaving dedicated grants + subsidies + debt + capital + Purchase Orders.

Capacity building must come from the recognition of traditional knowledge, also promoting the exchange of experiences between producers

Design training processes in a way that is not dependent on technical assistance. It should be designed to catalyze but also to give independence.

Common Findings among all Focus Groups

USAID Focus Groups 11

• Development of local leadership and business capacity takes time and trusting relationships thus working with local partners is fundamental.

• Youth engagement is an urgent challenge due to intergenerational transition of land ownership, illegal activities and migration.

• Women are disenfranchised mainly due to lack of land ownership and unpaid labor.

• Community enterprises offer the opportunity for women and youth to take ownership in the landscape, even if they do not have access to land.

Key Finding: Local Governance, Including Women and Youth

Ph ot os o f

PN

U D

C O

N

AN

P

Feb 2021 USAID Focus Groups 12

Key Finding: Integrating Biodiversity and Communities

● Communities value biodiversity and ecosystem services as the basis for thriving life. “Biodiversity is everyone’s life insurance”.

● This implies incentives to think beyond linear supply chains of commodities going towards diversification of landscape value-added products and services.

● The focus groups mentioned strength of local governance and long term grassroots organizations as key assets.

● Most recommended structure: Collaborative community enterprises.

● Communities want to be agents of their own change: more bottom-up decision making and co-designing interventions with them instead of just being consulted as beneficiaries could be a driver and a powerful incentive for transformative change.

• Focus group participants voted that they would allocate the most investment towards assets that add value to products cultivated in the landscapes.

• “Transforming local community leaders into businesspeople needs constant development and we need fair and trusted partners to provide business capacities.” Community Leaders in Southern Mexico.

• Distributing the ownership and benefits of the companies that have the value added margins within the communities is a space for social justice and women and youth inclusion.

• Blended finance needed: No single layer of finance would work for whole landscapes:

Interweaving dedicated grants + subsidies + debt + capital + (prepaid and long term) purchase orders.

Key Finding: Financing and Productive Markets How to create more wealth within the landscapes through landscape management?

Feb 2021 USAID Focus Groups

Association, scale and access to markets + finance are linked

Individual Producers Access to philanthropy and subsidies

Cooperatives and Community Enterprises

Access to concessionary finance

Distributors and Market Access Points Greater access to commercial finance, differentiated markets, e-commerce.

Association + Added Value = Scale

Game-changing Finance Upfront capital or pre-paid and long term purchase orders from private sector investing in the transition to more sustainable practices .

Landscape investments focused on restoring ecosystems fall within the spectrum of regenerative investments:

Source: The Holistic Investment Spectrum. Laura Ortiz Montemayor. 2017.

• Local sourcing of inputs reduces costs and risks. Is there an opportunity for packaging materials with leftover scraps of local processes?

• Develop competitive products that can tackle different market segments (the differentiated retail markets versus wholesale and bulk markets).

• Accessibility of products in the stores is a much more effective investment than marketing and packaging investments.

Key Finding: Financing and Productive Markets How to add value to commodities and raw material within the landscapes?

Benefits of Combining a Landscape approach + Market focus

Beyond supply chain’s lineal sourcing:

• Environmental benefits

• Risk management benefits

• Information efficiencies

• Resilience for natural capital and social capital

For the Farmer, diversified income stream means:

• Resilience against certain crop losses

• More stable and diversified cash flow

• Higher income overall

• Long term social and health benefits of maintaining forested lands

The rancher in the traditional model has an NPV (net present value) of $767 MXN per hectare per year (20 year model) while the forest grazing model had a NPV of $15,174 MXN per hectare per year, including the cost of the rancher’s labor.

This model mentioned the importance of complementary income such as the income from the sales of honey, which represent 36% of income for the forest grazing cattle rancher in the first few years after the transition of her ranch.

Source: Opportunities for Functional Restoration of Landscapes in Oaxaca. IUCN. 2020.

Example: Comparative of cash flow for the forest grazing cattle ranching compared to traditional extensive cattle management.

Feb 2021 19

Recommendation:

Build on Good Governance Platforms that Exist within the Landscapes

USAID Landscape Focus Groups 2021

• Landscapes have some local capacities and leadership and may need support that can gradually decrease by developing and strengthening these local capacities.

• Seek to design with the intention that most leadership and budget stays in the community and local organizations can incentivize an allow for the path to self-reliance more effectively.

• The focus groups asked for local leadership and the power of the communities to co-design and manage the projects that affect their landscape.

Accountability and transparency of resources can improve.

Accountability and transparency

Le ad er sh ip G overnance

Resources

Ownership

Recommendation:

Design by and with the Community or “Nothing for me Without Me” According to the transformative finance principles:

1. Projects are primarily designed, governed, and where feasible owned by communities

(beyond consulting for their prior informed consent).

2. Investments add more financial value than they extract.

3. The financial relationship fairly balances risks and returns among all stakeholders.

Examples of this principles where the invested capital is accountable to the local communities can be found in the impact investing funds of:

• Buen Vivir Fund that partners with local indigenous groups

• Grupo Paisano Fund in Mexico

• And CyclEffect Fund

Source: Real Impact, Morgan Simon. 2017.

https://thousandcurrents.org/wp-content/uploads/2018/03/BVF-infographic-FINAL-1.png https://www.uv.mx/redssss/files/2014/03/Grupo-Paisano.pdf https://www.cycleffect.earth/

• A corporation’s supply chain originates in the landscape as raw material or commodity, yet companies’ finances consider the landscape as an externality. The corporations’ payroll, benefits and insurance mostly only cover marketing and finance teams, not last-mile producers, let alone their climate risks.

• Producers currently bear all risk in sustainable transition practices:

climate, health, livelihoods, opportunity costs among others and are reluctant to make the transition to sustainable landscape practices without a guaranteed market.

• If corporations want better sustainable products they should bear most of the risk of the sustainable transition as well (certifications, capacities, resilient last-mile infrastructure).

The business and investment case for this transition ultimately benefits the corporations that sell these products at a profit the most.

Feb 2021 21

Recommendation:

Private Sector or Corporations should Contribute more “Skin in the Game”

USAID Focus Groups 2021

“We must all bleed equally” Representative of Large Corporation

● Long-term vision, against project short term vision, considering all local process (Community Leader, Focus group Chiapas).

● Governance process with a focus on engaging women and youth actively and effectively.

● Community-led interventions are more successful long term because they create buy-in and trust.

● Participation in the added value of the product (the community partially owns the companies that process landscape products).

● Some projects and ejidos are already advanced in good governance practices; including that base in any activity is key while also continuing to strengthen governance.

● Consideration of normative and programmatic issues and international commitments for interventions. 22

Components of a Successful Landscape Intervention in Mexico

Ph ot o o f

PN

U D

C O

N

AN

P

According to the Focus Group Participants

Profitability

Many projects need support to evolve beyond grants

Profitability Added Value and

Enterprise capabilities allow for healthier margins.

From productive projects towards investability and a distributive exit Productive

Conservation Projects Scalable Market consolidation, diversified clients, recurrent sales.

Certified impact.

Investable Access to more diverse finance and better conditions due to market power and track record.

Distributive Exit Distributed ownership can increase income + asset base for communities.

Opportunity for women and Youth

Feb 2021 USAID Focus Groups 2021 24

Annexes

1. List of consulted stakeholders

2. Summary tables by focus group

3. Bibliography

CHIAPAS SELVA MAYA /

CALAKMUL

OAXACA GLOBAL

STRATEGIES

MARKET

CATALYZERS

USAID

PARTNERS

AMBIO LOOM Capital PNUD Fomento Ecológico Citibanamex

Neek Capital/ Tierra de Monte

CCMSS

Educampo The Nature Conservancy

FINDECA ALCOTT Group México

CCMSS Rainforest Alliance

FMCN Walmart Foundation WRI PEPSICO International

IBERO USFS

Conservación Internacional México

YAAX Financiera Nacional de Desarrollo

Reforestamos México

Obio PRONATURA

TOKS Alianza Selva Maya CEPCO WWF México Lacteos del Potrero WRI/PRONATURA Ganadería Regenerativa

CONAFOR GAIA Techno Serve Omni Credit/ Anónimo Café

La Mano del Mono Nuup Fomento Ecológico Citibanamex

Biodiversity Finance Group

Maxiterra

El Buen Socio Obio Nestlé World Resource Institute

Athelia/MIROVA ECOSTA Yutu cuii Commonland

Foundation

LANDSCAPE

ASSETS

(CHIAPAS)

ENABLING CONDITIONS CHALLENGES SYSTEMIC INTERVENTION

Local acknowledgment Conservation projects to favor people’s well-being

Generate empowerment processes within the community to transform women's private and public sphere participation.

Change-makers agents involved in the medium and long-term to create landscape scale transformations.

Biodiversity, supporting conservation targets and the way local communities manage them

Make the relationship between human nature and links with productive activities visible.

Review each segment of the production chain where producers can be strengthened. Link to companies, develop overall conditions understanding.

Carry through goal-directed actions on gender and youth involvement.

Social Capital Men focus on productive economic actions, women have financial insights but are also more objective on sustainability and are open to experimenting and exploring adaptive management.

Lack of coordination in public policies that generate perverse incentives.

Generating strong chains through the promotion of governance and knowledge of other successful experiences can help maintain actions in the long-term (knowledge and collective consciousness).

Social capital and long-term processes experience in the state.

Diagnostics cannot continue; actions must be implemented .

Joint projects between state and municipal governments to maintain them in the long-term.

Encourage associativity to achieve common objectives like economy of scale, skills, and potential.

Community enterprises have a high dependency on subsidies and little connection to markets.

Make indirect impact and crate indicators to measure progress at the landscape scale.

Private sector integration. The general approach seeks a community company to cover a significant value chain section, unrealistic and unreachable.

The capacity development should recognize traditional knowledge and promote experiences exchange among producers.

Design courses and consultancies that do not depend on technical assistance. It must be designed to catalyze but also to give independence.

LANDSCAPE

ASSETS (SELVA

MAYA)

ENABLING CONDITIONS CHALLENGES SYSTEMIC INTERVENTION

Local capacities Diversified use resource Market and government failures generate perverse incentives and foster an opportunity cost to benefit land-use change

Create multi-scale territorial interventions to invest with a systemic approach, covering value chains with easy market access.

Traditional knowledge

Promote the strengthening of local governance Women and youth lack decision-making spaces and acquire financial credits or other resources due to limited land access

Long-term vision refers to a process vision beyond the project and considerations of each project's value cycles.

Ecosystem services It is necessary to start from the ejidal and communal structure. It is desirable to lead them towards a healthy market scheme that includes the community's worldview.

Structural barriers for ejidos and communities to access financing, both from the first and second-tier banks.

Design adequate financing and seek to reduce structural barriers.

For ejidos, communities, women, youth in a differentiated and goal-oriented way.

Social and natural capital

The need to enable the joint vision of the landscape between actors and sectors.

Government programs such as "Sembrando Vida" (sowing life) and Tren Maya (Mayan train) are megaprojects with a significant impact on the landscape.

Create links between government, civil society and local communities.

Bring to the discussion and buy-in from design to implementation.

Organize the land use of the landscape, avoid competition between ecosystem and economic services.

The link between the social, private, and public sectors, through participatory planning processes from the local level, recognizing preconditions, such as market failure.

Transfer technical service from production to ecosystem services.

The main focus must be on the communities, not on the GHG. GHG reduction will be an external benefit if these programs are well managed.

To have community trust, it is vital to recognize failures and have the capacity to solve them with a systemic approach.

Recognize the value of ecosystem services and their relationship with productive activities.

There must be a better articulation between programs and public policy in the landscape.

For policy failures, it is essential to change incentives and address them effectively.

Collaborative creation of incentives to improve the production chain and production systems

Pair incentives with technical assistance towards business development to achieve added value to demonstrate that the standing forest is worth more than sorghum /corn.

Constant follow up is needed to transform ejidatarios into entrepreneurs

LANDSCAPE ASSETS

(OAXACA)

ENABLING

CONDITIONS

CHALLENGES SYSTEMIC INTERVENTION

Remarkable community governance Diversified use of landscape resources.

Market and government failures, which generate perverse incentives and foster an opportunity cost to benefit land-use change.

Business strengthening for cooperatives and community companies, to cover requirements of the self-services.

Traditional knowledge Consolidate interventions through local Governance platforms.

Women and youth lack decision-making spaces or access to financial credits or other resources due to limited land access.

Creation of resilient funds and strengthening of IFNB to improve rates for final borrowers

A large number of ecosystem services and diversified use of the territory in productive activities (milpa, wood, ecotourism)

Institutional development of the community enterprise to reach a more significant number of markets.

Structural barriers for ejidos and communities to access financing, both from first and second-floor banks

Design adequate financing to seek a reduction of structural barriers for ejidos, communities, women, youth in a differentiated and goal-directed way.

Community forest management as an example of the integration of various values: Governance-markets-ecosystem services

Local organizations and governance create a great environment to implement systemic interventions that promote climate and social resilience.

Competitive products launch in different market segments. There should be products that can compete with supermarket products.

Accessibility kills marketing.

Diversity of financing mechanisms.

Systemic Change in previous links.

More equitable distribution of benefits-oriented to the producers

Feb 2021 USAID Focus Groups 2021 29

Bibliography

● Mexican Fund for Nature Conservation, Findeca and BID LAB (2019). EmFoCo y Desarrollo: Financiamiento a Empresas

Forestales Comunitarias.

● Mexican Civil Council for Sustainable Forestry (2020). Unión de Ejidos Chinanteca Zapoteca, UZACHI.

● Lush Cosmetic (2020) A journey towards regenerative supply chain.

● Scherr, Sara & Belleld, Helen & Gregory, Josh & Mardas, Niki & Oakes, Nick & Buck, Louise & Heiner, Krista & Lentini, Marco &

Sarkar, Sunita & Reed, James & Ackermann, Klaus & Hack, Matthias & Lange, Andreas & Wallrapp, Corinna & Richter, Frank & Bakarr, Mohammed & Calmon, Miguel & Zagt, Roderick & Aguilar, Leida & Bogeza, Robert. (2015). The Little Sustainable Landscapes Book: Achieving sustainable development through integrated landscape management.

● Horn, S. van der and Meijer J. (2015), The Landscape Approach, The Hague: PBL Netherlands Environmental Assessment Agency.

● National Forestry Commission (2017), National REDD+ Strategy.

● National Institute of Ecology and Climate Change and Secretary of Environment and Natural Resources (2018). Sixth National

Communication and Second Biennial Report to the United Nations Framework Convention for Climate Change.

● Ethan Soloviev (2018) Regenerative Agriculture Continuum.

● International Union for Conservation of Nature (2020).Opportunities for Functional Restoration of Landscapes in Oaxaca.

● Sarukhán, J., et al. (2017). Capital natural de México. Síntesis: evaluación del conocimiento y tendencias de cambio, perspectivas de sustentabilidad, capacidades humanas e institucionales. Comisión Nacional para el Conocimiento y Uso de la Biodiversidad (CONABIO), México

● CONABIO, CONANP, PNUD. (2020). Conservación, restauración y conectividad: la biodiversidad de México ante el cambio global. Síntesis y mensajes clave. Comisión Nacional para el Conocimiento y Uso de la Biodiversidad - Comisión Nacional de Áreas Naturales Protegidas, Semarnat - Programa de las Naciones Unidas para el Desarrollo, México.

● Simon, Morgan (2017) Real Impact: The New Economics of Social Change.

https://www.emfocoydesarrollo.org/ https://spark.adobe.com/page/Hkb2fUYj6h9Il/ http://www.terra-genesis.com/lush-case-study/ https://www.researchgate.net/publication/305315812_The_Little_Sustainable_Landscapes_Book_Achieving_sustainable_development_through_integrated_landscape_management http://www.enaredd.gob.mx/wp-content/uploads/2015/08/Estrategia-Nacional-para-REDD.pdf https://cambioclimatico.gob.mx/sexta-comunicacion/introduccion.php https://medium.com/@ethansoloviev/regenerative-agriculture-continuum4346f78dde3e https://portals.iucn.org/library/node/49259 https://www.biodiversidad.gob.mx/pais/capitalNatMex.html https://www.researchgate.net/publication/342276818_CONSERVACION_RESTAURACION_Y_CONECTIVIDAD_LA_BIODIVERSIDAD_DE_MEXICO_ANTE_EL_CAMBIO_GLOBAL_-_Sintesis_y_mensajes_clave