Select Committee on Agriculture Appendices to the Minutes of Evidence


Annex D

LEGITIMACY OF "GREEN BOX" PAYMENTS: IMPORTANT CAVEATS TO ENSURE ENVIRONMENTAL PROTECTION

  1.  Some countries are calling for explicit proof of societal value to cross-check the scale of environmental payments. We would caution that while such approaches have merit in principle, economic valuation of biodiversity is technically fraught, that sustainable development principles go beyond the economic value given by the current generation. The best measure of "value" is this country's commitment to biodiversity protection as agreed in the Biodiversity Action Plan.

  2.  Some are arguing that environmental payments will only be legitimate if very tightly specified and focussed on environmental outcomes. We support such an approach in principle but warn that it is not feasible for the whole programme to be specified in this way because of problems relating to the landscape scale dependency of environmental benefits, transaction costs, burden of risk problems and scientific specification problems. The rules must allow for some elements to be related to a "looser" specification based on agricultural inputs.

  3.  The above point means that the Government should not support any agreements which discount legitimate payments simply because they specify a particular type of agricultural process.

  4.  Because of the joint product issues discussed above, legitimate environmental payments must be allowed even where they have indirect effects on production levels.

  5.  The "legitimacy" rules must allow environmental payments to cover the cost to farmers of producing the environmental benefits and, where necessary to achieve the environmental benefits cost effectively, the cost of keeping vulnerable farmers in farming. Either the green box rules (annex 2, paragraphs 1 and 6) or amended blue box rules must allow for such payments. The legitimacy of such payments at the necessary scale could be constrained by the current trade distortion rule (annex 2, paragraph 1) and the type of production rule (annex 2, paragraph 6). In addition, annex 2, paragraph 6 needs to allow legitimate payments (for example, based on historic area) which may have some indirect effect on production levels.


 
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