Farm Incomes and the Benefits of Environmental Protection

The past few years have seen increasing recognition that post-war agricultural expansion in the UK under the aegis of agricultural support policies has incurred considerable social costs. These costs have taken a number of forms. On the one hand there have been the classic negative externalities of pollution, posing new problems for the theory and practice of pollution control because of the plethora of polluters and the wide area of land over which pollution has taken place. On the other there have been problems of the under-provision of public goods provided jointly with agricultural output. The reduction in landscape diversity, accessibility of agricultural land and reduced suitability for recreational activities fall under this head, as does the reduction in ecological diversity of the farmed environment appearing as loss of various types of semi-natural habitats and their associated plant and animal populations. The elements of agricultural change that have been identified as causing these costs have been increased intensity of land-use, involving a substitution of bought inputs (machinery and chemicals) for the services of land, specialisation and a shift in crop production from grass to arable.1 What factors have brought about these changes is only partially understood. Most commentators have emphasised the importance of the agricultural support package, but whether it is possible to attribute specific aspects of agricultural change to specific elements of policy is doubtful.