Improve incentives for farmers to provide ecological goods & services


OTTAWA, Nov. 15, 2012 - Canada has an opportunity to recruit farmers to play a greater role in managing and protecting the rural environment, according to a Macdonald-Laurier Institute research paper. Unfortunately we are frequently squandering our own efforts to learn how to achieve this desirable goal through poorly designed policy experiments whose results are not properly measured and evaluated. As a result neither farmers nor Canadians are able to do as much as they might to enhance rural Canada's ecology.

The study, The Greening of Canadian Agriculture, notes that farmers are now recognized as a part of the largest group of private rural landholders who can influence environmental outcomes by providing ecological goods and services (EG&S).

"This shift creates a new legislative potential, whereby farmers can be encouraged to produce ecological goods and services," the paper, written by a team from the George Morris Centre, says.

According to the authors, policies that enhance the greening of Canadian agriculture have gained prominence in the past decade.

Election campaigns in Manitoba and Ontario during the fall of 2011 demonstrated that greening Canadian agriculture is top of mind for policymakers in Canada. Parties in both provinces called for expansion of EG&S programs such as existing ALUS (Alternative Land Use Services) pilot projects that protect wetlands and river bank areas.

ALUS, drawn from U.S. and European Union initiatives, intends to make the most of marginal spaces on farmland across the country, while leaving the better land on farms to food production.

The Ontario ALUS pilot program, launched with a handful of farms, now has more than 140 farm families enrolled. More than 1,000 acres of projects have been completed.

The paper examines incentives for rural environmental protection and enhancement under current policy and examines the extent to which experience in other countries, in the European Union, the United States, and Australia might help to illuminate Canada's challenges.

But the authors conclude most approaches used by other countries are either flawed or unsuited to Canada's circumstances. In particular they look at the EU's attempts to pay farmers to adhere to higher environmental standards than the minimum legal requirement. The very different ways in which Canada and the EU make payments to farmers, however, make Europe's experience of limited value here.

The authors also look at proposals to create a conservation plan for Canada to assess the currently existing natural capital (such as soil and water quality) and the rate at which that capital is being depleted. Such proposals normally include mechanisms by which those who degrade Canada's natural capital are forced to pay the cost of such degradation, giving them an incentive to preserve rather than destroy it. The absence of agreed valuations of natural capital, as well as important regional differences, are just some of the obstacles that would have to be overcome to make this approach work in Canada.

A Canadian proposal that attracts the authors' attention is one by The Manitoba Cattlemen (now called Manitoba Beef Producers) that focuses on the problem that economic incentives currently reward shifting wetlands and perennial green cover to agricultural land. The MBF proposal is for payments by governments to offset these incentives if governments and the public value these alternative environmental uses of the land.

Despite these interesting policy possibilities, however, the authors find that Canada possesses far too little information on which to base sound policy. Moreover, current Canadian programs designed to increase EG&S production are poor at measuring the effects and outcomes of their efforts. Programs now generally measure whether allotted funding was spent - not benefits arising from the initiative. Canada needs to get better at learning from its own policy experiments.

"Flexible, decentralized pilot initiatives, with a focus on follow up measurement, can establish over time which types of programs work best," the study adds.

The George Morris Centre's Claudia Schmidt, Al Mussell, Janalee Sweetland, and Bob Seguin are authors of The Greening of Canadian Agriculture, the latest paper in MLI's Hungry for Change Series.

The George Morris Centre (GMC) is an economic agri-food research institute based in Guelph, Ontario. The centre specializes in providing independent economic research to the agriculture and food industry. Research at the GMC focuses on five central research areas: Market Analysis, Economic Policy, Agribusiness Management, Economics of Food, Health and Sustainability, and Value Chain Management.

The Macdonald-Laurier Institute is an independent non-partisan Ottawa-based national think tank devoted to the development of Canadian public policy.

For further information, contact:

Tripti Saha
Communications Officer
Macdonald-Laurier Institute
613-482-8327 ext 105


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