Global Environment Facility
Proposed Project Concept And Request For A PDF Block B Grant
Country and eligibility: Uruguay ratified the Convention on Biological Diversity (CBD) on May 11, 1993, and the UN Framework Convention on Climate Change (UNFCCC) on August 18, 1994.
Project: Integrated Ecosystem and Natural Resources Management in Uruguay
GEF Focal Area: Multi-focal area (biodiversity and integrated ecosystem management)
Operational Program: OP#12 Integrated Ecosystem Management (OP#12) and Agro-biodiversity (OP#13)
Project Cost: US$ 35 million
Financing (tentative): GEF US$ 5 million
IBRD US$ 15 million
Government of Uruguay US$ 15 million
Requesting Agency: World Bank
Executing Agency: Ministry of Agriculture, Livestock and Fisheries
PDF Block B Request: US$ 335,500
PDF Co-financing: US$ 600,000 (Government of Uruguay, FAO and IBRD through PRENADER I)
Block A Grant Awarded? No
Project Structure
Project objective
The objective of the combined IBRD/GEF project is to promote the adoption of integrated production systems in agricultural and livestock landscapes to increase productivity within a context of holistic ecosystem and natural resources management while conserving soils, water, rangelands, and biodiversity. IBRD will finance the productive and competitive components related to agricultural crop production and livestock development. The GEF component will finance the incremental costs required to restore or improve the capacity of the productive rural landscape to maintain and improve ecological processes and conserve biodiversity. From the perspective of generation of global benefits, the project will promote the adoption of multiple-use land use practices that conserve biodiversity outside protected areas within a framework of integrated ecosystem management. Specific project objectives include:
a) To conserve natural resources and biodiversity by developing appropriate technologies for increasing productivity of agricultural systems (crops, pastures, livestock) while ensuring biodiversity conservation (financed by IBRD and GEF)
b) Promote the adoption of production systems to conserve soils, reduce grazing impact, reduce erosion risk and enhance the efficient use of water resources (surface and groundwater) (financed by IBRD)
c) Understand the carbon sequestration potential of various land-use practices and delineate a strategy to promote carbon sequestration in Uruguay’s productive landscapes (financed by GEF)
d) Promote awareness about biodiversity conservation in the productive sectors and build capacity at the institutional and landowner level for holistic management of natural resources, integrating biodiversity conservation in productive landscapes (financed by IBRD and GEF)
e) Develop the management tools required to achieve efficient and sustainable natural resources management, including the development of new policy and legislation tools when required (IBRD and GEF)
f) Provide assistance to landowners to attain the efficient use of water, soils, pastures, and the conservation and sustainable utilization of biological diversity to increase agriculture and livestock production while ensuring the conservation of natural resources (IBRD and GEF).
Global Significance
Uruguay is located in the confluence of two major phyto-geographic domains: Amazonian, and Chaco. Broadly speaking and under natural conditions, the country’s habitats are dominated by grasslands, interspersed with a mosaic of other habitats, especially marshes, spiny woodland (“espinal”), gallery forest, and in some cases large bodies of standing water (“esteros”). The relative importance of these habitats and the clear dominance of the grassland (“pradera”) ecosystem is shown in Table 1.
Table 1
Principal Natural Habitats and Land Use in Uruguay[1]
Habitat Type / Extension (ha) /Percentage
Savanna, currently rangelands / 14,000,000 / 79.4Natural Forest / 600,000 / 3.5
Wetlands and other Aquatic Ecosystems / 1,145,397 / 6.5
Permanent Agriculture / 920,000 / 5.2
Urban and Infrastructure / 300,000 / 1.7
Plantation Forests / 400,000 / 2.2
Other / 256,103 / 1.4
TOTAL / 17,621,500 / 100.0
The country is biologically unique from a global ecoregional perspective: According to Dinerstein et al. (1995)[2], most of the country belongs to the “Uruguayan Savanna” ecoregion, which also extends to parts of Argentina and Brasil. Because this ecoregion is one of the few “savanna” ecosystems in the world, it is very important from a global representativeness point of view. For this reason, these authors consider this ecoregion to be of “bioregionally outstanding” value. According to the Dinerstein et. al classification, other ecoregions represented in the country include the Humid Chaco and the Brazilian Atlantic Coast Restingas.
The specific habitats present in Uruguay do not occur in isolation from each other. They are interspersed among themselves, and with a series of localized geographic features which include rocks, hills, small ravines and a highly branched hydrological network; it is this “mosaic” pattern that defines the uniqueness and importance of the ecoregion from a biodiversity perspective, and, under natural conditions, allows it to maintain its species diversity. The following are the main ecosystems present in the country:
· Savanna. It includes an heterogeneous herbaceous community (2000 species, of which 400 are graminidae), whose diversity is determined by the relative complexity of the soils. There are also various legumes with importance from a range management perspective, as well as shrubs.
· Native Forests. Including various distinct types, among them gallery forests (along rivers and other water courses), ravine forests (which appears in patches and benefits from specific micro-climate conditions), “bosque Serrano,” palm forests (including the important and endemic “Butia” association covering 70,000 ha), “monte de parque,” “algarrobal,” and litoral spiny forests (“monte espinoso del litoral”).
· Wetlands. Primarily located in the southeast of the country, especially in the Laguna Merin watershed and the coast of Rocha.
· Coastal Ecosystems. Uruguay has productive coastal ecosystems with an important associated wildlife. These occur along the two main coasts of the country, the River Plate coast (460 km), and the Atlantic coast (220 km).
At the species level, there are ca. 1,200 species of vertebrates, including 580 fish, 41 amphibians, 62 reptiles, 434 birds, and 111 mammals. Of the 111 species of mammals historically present in the country, four have already become extinct, and an additional 5 are in danger of extinction. Under Birdlife International’s Endemic Bird Areas classification[3], Uruguay contains remnants of the original “Argentine Mesopotamian Grasslands,” which includes 3 restricted-range species (all of the genus Sporophila), one of which is in critical condition, another endangered, and the third near threatened. From a botanical perspective, Uruguay has over 2,500 species of which the great majority are herbaceous species or shrubs corresponding to the dominant savanna ecosystems.[4]
Project Background and Threats
Livestock production (primarily cattle and sheep) has been the main pillar of the rural economy during the last several hundred years. Due to a historic lack of stimulus for investment, the sector has been slowly loosing its productivity with the resulting extensification at low densities and the consequent loss and alteration of natural habitats. The original savanna ecosystem with associated forests (a product of rich soils and a temperate climate) has thus been heavily altered and with it, the natural features of the landscape have most likely changed substantially.
This alteration has had effects at two levels:
(i) Localized effects, which include a change in the composition of species (primarily grasses) due both to invasion of exotic species, such as introduced grasses, and to the selective effects of grazing which favors certain species over others and thus alter the natural competitive forces that are present in its absence. In addition, grazing causes soil compaction, which also distorts the ecological forces present in the absence of grazing.
(ii) Ecological effects, which are larger-scale changes resulting from the alteration (due to range management practices) of flooding patterns, fire cycles, and natural successional cycles, which in turn create a savanna ecosystem different from its original natural condition, with the consequent change in species composition and dominance patterns.
Extensive livestock production systems in natural grasslands in Uruguay confront a potential trade-off: on the one hand farmers seek increasing productivity levels and therefore, introduce exotic grasses and legumes and apply fertilizers in the natural rangelands. These practices result in higher livestock productivity levels and consequently increased farmers income. On the other hand, alterations of the natural rangelands represent a clear threat to preserving native species and reducing biodiversity. Sustainable technologies are therefore needed to contemplate increased productivity and biodiversity conservation within a framework of market competitiveness.
Another major alteration of natural habitats (directly or indirectly associated with range management practices) has been the loss of native forests, with the consequent loss of biodiversity habitats, biological corridors, and ecosystem services. Fortunately, both main habitat types (savanna and native forests) are fairly resilient and, unlike many tropical habitats, they can be the subject of restoration efforts that can be cost-effective and feasible in time.
Erosion has also altered natural habitats. Currently, thirty percent of all the agricultural land suffers from some form of erosion. Nevertheless, soil erosion seems to strongly depend on the appearance of periodic heavy rain episodes (associated with El Nino), with the resulting damage being heavily correlated with the type of land-use present, which is minimal under permanent forest.
In the crop/livestock production systems, the dairy production systems, and the rice based systems, natural grasslands have been displaced almost entirely. In addition, the farming practices used in the 1950s and 1960s resulted in severe soil erosion and soil degradation. Although the current agronomic practices trend to increase soil organic matter levels, recovery rates are slow. There are clear opportunities to accelerate the soil recovery rates in these systems through the adoption of integrated management practices including the use of no-till agriculture and the inclusion of productive pastures in rotation with annual crops.
Wetland loss and degradation has also occurred in a substantial magnitude, due to a variety of factors, including the expansion of rice cultivation which both replaces the habitats and degrades them through heavier chemical inputs that result from the application of fertilizers and pesticides. This effect has been particularly important in Los Bañados del Este.
Finally, invasion by exotic species (both animals and plants) has also caused impacts. For example, since the 1960s, the growth of the ranching sector has been promoted via the introduction of “improved” grasses and fertilizers – with the consequent ecological impacts already discussed. Fortunately from a biodiversity perspective, of the 16 million ha. that are appropriate for livestock production (90% of which is currently under exploitation), an estimated 91% of the area is still covered by natural grasses.
Government Strategy
There are various characteristics unique to the country that have determined the historic land-use patterns and their impacts on the natural environment. In addition to the already-mentioned importance of ranching for the economy, additional factors include the low population density, the early disappearance of indigenous communities, the very high urbanization rate (90% of the population currently lives in cities), and the very high proportion of lands under private ownership. These characteristics have prevented Uruguay from developing a “Protected Area System” of similar characteristics to those of other Latin American countries. Indeed, the existing protected areas have been created in an ad-hoc manner, primarily following an opportunistic approach, and under the protection of various distinct laws. The existing areas are therefore administered by the public organism that owns the land, whether it is the MGAP, MVOTMA, SEPAE, Municipalities, etc.
As a result, Uruguay lacks a traditional system of protected areas, and the existing areas cover only 283,000 ha, equivalent to 1.6% of the national territory. In order to correct this situation, a law that creates the National System of Protected Areas was passed in 2,000, although its implementation has not yet taken place due to the lack of the complementary regulations and the required institutional arrangements.
Native forests are protected under law, but this legal protection, although necessary, is not a sufficient condition to ensure that native forest ecosystems recover their ecological functionality. This functionality requires the existence of contiguous areas of a minimum size, the maintenance of habitat quality, the proper configuration of forest patches in biological corridors, etc. Furthermore, there is a lack of effective incentives for reforestation with native species, which given the losses already occurred, is a pre-requisite for the recovery of these ecosystems.
At the macro-level, the National Biodiversity Strategy (NBS) has been recently prepared and approved within the context of the Convention of Biological Diversity as explained below under section “project rationale.” It contains the principal recommendations and instruments for the implementation of the CBD in the country and is the result of a participatory process. About 125 delegates representing 58 institutions from the public and private sector (Ministries, local governments, educational and research institutions, NGO’s, farmers associations, etc) and from the University, between others, attended the thematic workshops during the period of the project.
The specific themes covered in the NBS are:
a. Conservation in situ,
b. Conservation ex situ,
c. Research, Capacity Building and Information Exchange,
d. Education and Public Awareness,
e. Environmental Impact Assessment,
f. Development Policies and Access to Genetic Resources.
Recommendations under each theme reflect the knowledge and experience of the stakeholders that participated in the elaboration of the strategy, and support the main strategic directions of the proposed project, with emphasis on in situ conservation, research, capacity, and information exchange, and education and public awareness, as explained in detail in section “Project Rationale” below.
Independently of any sector-specific measures, however, it is clear that the future of biodiversity in Uruguay cannot be analyzed in isolation from the government policy regarding rural development, and ranching in particular. Thus the important opportunity and the critical importance of combining this GEF project with the IBRD loan under preparation (second phase of the ongoing PRENADER project).
Currently, the government ranching strategy (through MGAP) has three main pillars: (i) sectoral growth based on productivity increases, (ii) equitable sharing of the costs and benefits of this growth, and (iii) conservation of natural resources. Over the long term, the strategy prioritizes diversification, increase in productivity, product differentiation, product value-added, and increase in quality. The fate of Uruguay’s biodiversity is intimately linked to this sector, and it is thus critical to develop and implement a biodiversity policy that can be effectively applied within that context. This policy context provides an excellent departing point or “baseline” for the GEF project.