Monday, January 02, 2017

Treasury ups war on farm subsdies

The following report appeared in the Sunday Times yesterday (extracts only).

'A “25-year plan for nature” calling for UK uplands to be allowed to revert to forests and wetlands and tough new restrictions on commercial fishing is predicted to spark a Whitehall battle when ministers publish it in the next few weeks. The plan is being driven by the Treasury’s natural capital committee (NCC), a group of economists and environmentalists tasked by the former chancellor George Osborne with helping to fulfil the Conservative Party’s election pledges to reverse 60 years of environmental decline.

At the heart of the plan is a key radical idea: that Britain’s natural assets, including mountains, rivers, fields and forests, can be given a monetary value and incorporated into the country’s national accounts. Each element of those natural assets, from fish stocks to the recreational value of mountains, can then be periodically revalued.

The NCC’s latest report says: “Despite only accounting for 0.7% of GDP, farming utilises 75% of total land area . . . and can produce large external costs to society in the form of greenhouse gases, water pollution, air pollution, habitat destruction, soil erosion and flooding. These costs are not reflected in the price of food. As a result, farming is responsible for net external costs to society that have been valued at £700m per annum.”'

Leaving aside the journalistic hyperbole, all this in consistent with the Treasury's targeting of farm subsidies which is nothing new.

What this is also about is the notion of paying farmers for providing so-called ecosystem services, an idea that is gaining traction. It is not my main area of expertise, but my hunch is that any scheme of this kind could well benefit upland farmers at the expense of lowland farmers who have obtained the biggest subsidies up to now. It might not also be good news for sheep farmers who are attracting increasing environmental criticism.

Without seeing the report, it is difficult to comment on it. What I do predict is that there are stormy waters ahead in 2017.

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