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.
KeywordsTechnical Progress Input Price Social Optimum Farm Income Output Price
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- 1.The process has been described and analysed in J. K. Bowers and P. Cheshire, Agriculture, the Countryside and Land-Use (London: Methuen, 1983).Google Scholar
- For the loss of semi-natural habitat see Nature Conservancy Council, Nature Conservation in Great Britain (London, 1984).Google Scholar
- For other aspects of social costs, see Countryside Commission New Agricultural Landscapes: Issues, Objectives and Action (London, 1977).Google Scholar
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- 7.Strictly speaking, such observations would give insight only to personal social welfare functions. Aggregation remains problematical under the Arrow impossibility theorem, unless one accepts the views of the new social contract theorists that, when determined in the correct manner, personal SWF’s will be identical. See, for example, J. C. Harsanyi, ‘Cardinal Welfare, Individualistic Ethos and Interpersonal Comparisons of Utility’, Journal of Political Economy, 63 (1955), pp. 309–21.CrossRefGoogle Scholar