Urbana, Illinois
November 16, 2007
Paying farmers to protect the
environment is an idea worth exploring, said a
University of Illinois
agricultural economist who co-authored a new
United Nations Food and
Agricultural Organization (FAO) report on the topic.
"Carefully targeted payments to farmers could serve as an
approach to protect the environment and to address growing
concerns about climate change, biodiversity loss, and water
supply," said Gerald Nelson, who co-authored the report that is
part of the FAO's annual publication, The State of Food and
Agriculture 2007 (http://www.fao.org/docrep/010/a1200e/a1200e00.htm).
"However, payments for environmental services are not the best
solution in all situations. And, if and when used, significant
implementation challenges remain."
Environmental services by farmers could include such things as
water purification and climate change mitigation. Farmers are
not generally paid for these services and no market exists for
them.
"These services generate a benefit to somebody other than the
person who produces them, but no compensation takes place for
their provision, so they tend to be under-provided," he
explained.
Farmers can take three types of action to increase the amount of
environmental services they provide. First, they can change
their current production practices. Second, they can change the
way they use the land, changing to uses that provide more
environmental services.
"Third, farmers can choose NOT to make a change motivated by
market forces," he said. "For example, they can choose not to
convert forested uplands to annual crop production.
"There is no one best way to increase the amount of
environmental services farmers supply--it depends very much on
the specific circumstances facing each farmer."
Farmers can provide better environmental outcomes, but they need
incentives to do so, according to Nelson's report.
"Payments for environmental services represent one way of
increasing incentives to adopt improved agricultural
practices--and even to offset pollution generated in other
sectors," he noted.
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