THE IMPACT OF PRODUCTION SUBSIDIES ON THE
ENVIRONMENT: FOUR CASE STUDIES
1. Increased pressures to produce more livestock
from a given area of land have come from a range of sources including
changes in technology, the structure of farming and consumer demands.
Increased stocking densities, however, have been dramatically
accelerated by the support payments for cattle and sheep under
the Common Agricultural Policy (CAP) livestock regime.
All direct sheep and cattle subsidies are paid on a headage basis,
thereby encouraging increased stocking as farmers try to maximise
income from subsidies. For example the number of breeding ewes
in the uplands of England increased by around 35 per cent between
1980 and 2000. Overgrazing is the principal environmental concern
in the uplands and is widespread across a range of habitats. The
impact of overgrazing on the quality of upland habitats is illustrated
by the condition of upland Sites of Special Scientific Interest
(SSSIs). There are 1.1 million ha of SSSI in England, of which
448,000 ha is in the uplands. A higher proportion of upland SSSI
(67 per cent) is in unfavourable condition compared to lowland
SSSI (33 per cent) and considerable investment in these will be
required if the Government is to meet its PSA target. Most upland
SSSIs require agricultural grazing, but at significantly lower
stocking rates than those adopted by conventional commercial upland
2. Addressing the impact of the CAP on upland
habitats will be a key factor in achieving the Government's Public
Service Agreement (PSA) target for SSSIs, which aims to have 95
per cent of SSSIs in favourable condition by 2010.
3. Substantial losses of lowland unimproved,
species-rich grassland in England have occurred over the last
50 years. The main causes of the losses have been the post-war
intensification of agriculture. Species-rich grasslands have either
been improved by a combination of ploughing and reseeding with
high yielding strains of rye grass, under-drainage, the use of
herbicides and inorganic fertilisers or conversion to arable.
4. It has been estimated that 97 per cent
of lowland unimproved grassland was lost between 1930 and 1984
in England and Wales.
More recent studies have shown that losses have continued in the
last two decades of the 20th Century. In the Peak District, comparison
of data from the mid-1980s and mid-1990s showed a 76 per cent
loss or decline in the conversion value of species-rich grassland.
In Worcestershire, 6 per cent of species-rich neutral grasslands
per annum were lost or damaged between 1980 and 1991/92.
5. Agricultural intensification over the
last 50 years has been driven by a combination of technological
advancement in farming supported by grants and national and European
policy that has commodity support as prominent feature. These
include livestock subsidies based on headage payments and price
support for products such as milk and arable regimes involving
price support and more recently area payments.
6. These regimes have encouraged overall
increases in agricultural production in both the livestock and
arable sectors and an increase in the area under arable cultivation
at the expense of permanent grassland. In addition shifts in the
nature and type of farming systems have occurred, particularly
specialisation. Although the impacts of production subsidies on
the environment are extremely complex, there is no doubt that
they have led to an overall impoverishment of biodiversity in
the farmed countryside.
7. Despite the increased greening of European
agricultural policy in the last two decades, losses of species-rich
grassland have continued although an increasing issue for remaining
areas is neglect as maintenance of biodiversity value of species-rich
grassland is dependent on continuation of low-intensity grazing
and mowing regimes.
8. By encouraging farmers to increase stock
numbers and increasing the need for more productive and intensively
managed grassland and fodder crops or by providing area based
subsidies for producing arable crops with no environmental conditions
on the receipt of support, the current support system provides
an incentive to maximise fertiliser and agro-chemical inputs beyond
economically optimal levels.
9. Research by the Home Grown Cereals Authority,
has shown that using integrated farming systems pesticide and
nitrogen use could be substantially reduced compared to conventional
systems (30 per cent less cost and 18 per cent less active ingredient
for pesticides and 20 per cent reduction in nitrogen) without
any reduction in the economic viability of the system. Nitrate
loss from agricultural land to surface groundwater is a significant
proportion of average application rates and high nitrate concentrations
in surface and groundwater means that some drinking water supplies
cannot be used without additional pre-treatment or blending. The
contribution of agriculture to the problem of water quality is
becoming proportionally greater as discharges of nitrogen and
phosphorous from point sources, principally sewage treatment works,
is addressed under the Urban Waste Water Treatment Directive.
10. Addressing the agricultural sources
of diffuse water pollution that will enable the Government to
meet its PSA targets on River Quality Objectives, SSSIs, UK Biodiversity
Action Plan targets and environmental targets under the habitats
and Species Directive and Water Framework Directive will require
a comprehensive strategy of measures. Removing production related
subsidies would, however, remove the underpinning incentives that
encourage maximisation, rather than minimisation, of fertiliser
and agro-chemical use.
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