Set aside: act now, think later…

Following a Swedish proposal and widespread support in the Agriculture Council, the Commission announced the intention to set the level of compulsory set aside at 0% for the 2008 harvest. This is bad news for Europe’s wildlife and suggests a disappointing level of commitment to environmental sustainability on the side of the EU and its Member States. It also seems like a textbook case of ill conceived decision making.

There is no dispute on the fact that set aside was not introduced for environmental purpose, and that with decoupling of subsidies and high commodity prices, its supply control objective is no longer justified. However, a mounting body of evidence is suggesting that set aside has brought significant incidental benefits to the EU’s beleaguered biodiversity by ensuring a vital “breathing space” for species driven off most of our farmland through relentless agricultural intensification.

If the EU is serious about its commitment to stop the decline in biodiversity, current set aside should be substituted with a purpose tailored environmental tool, rather than scrapped. The Commissioner has publicly acknowledged the issue and promised to look into it as part of next year’s “health check”, but the recent announcement suggests that we may be causing the damage first, thinking about the problem later. Birds attempting to nest next spring are likely to face entire regions with hardly any suitable habitat. The consequences will be seen before the long term solution is even suggested.

The sad history of the CAP’s environmental impacts would suggest more caution and analysis. Unfortunately, it seems that the wish to please parts of the farming lobby is much stronger than the wish to ensure the survival of threatened species. For the moment the recipe seems to be “act now, think later”

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2 Replies to “Set aside: act now, think later…”

  1. It is worth noting that set aside has been under threat recently from the rule which allows farmers to grow energy crops (usually rape seed) on set aside land. There is a very similar situation in the United States where farmers are taking land out of the Conservation Reserve Program in order to grow corn as a raw material for producing ethanol as a fuel for cars and trucks.

  2. The issue Ariel raises in this post illustrates well the trade-off between food/fuel and environmental uses of farmland in Europe. At low levels of input use and intensity, food/fuel and environmental goods are probably complementary – increasing the production of one increases the production of the other. However, beyond a certain point (which is certainly passed in the intensively farmed regions of Europe) these goods become substitutes. Greater output of food/fuel can only occur at the expense of environmental goods, and vice versa.

    When the demand for food/fuel appeared to be fragile, paying for environmental goods seemed a good way of meeting both rural policy objectives (such as maintaining farm incomes) as well as environmental objectives. With rising demand for food/fuel (some, but not all, stoked by public subsidies for biofuels) leading to higher prices, the cost of meeting environmental objectives has suddenly increased. It is not surprising if the quantity of these goods demanded by the public would fall as a result.

    The problem, of course, is that we don’t know if we were in a social equilibrium before the recent price increases with just the right relative amounts of food/fuel and environmental goods being produced, because environmental goods are not valued at conventional market prices. Farmers’ production of environmental goods depends, in part, on governments’ willingness to set aside tax revenue to pay for these goods, and environmentalists will argue that the amounts to date have been insufficient.

    Ariel is right to argue that a purpose tailored environmental instrument is a better approach to protect biodiversity than to depend on the unintended consequences of an agricultural policy supply management instrument. This, in turn, requires that there be agreement on the Commission’s expected proposal to at least double the rate of compulsory modulation in the Health Check, because modulated funds are the only way to increase Pillar 2 spending before 2014. The rise in farm prices and farm incomes will make it easier to argue that funds should be shifted from income support payments under Pillar 1 to agri-environment schemes under Pillar 2. But firm evidence of the European public’s willingness to pay a higher price for environmental goods such as biodiversity would also be helpful in order to win this debate.

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