Agriculture and Environment: Soybeans

Better Management Practices: Government Subsidy Programs

Once better practices have been identified, they should be encouraged.

One way to do this is to make the adoption of BMPs one criterion on which government base producer payments or subsidies. Making such payments contingent on compliance with the adoption and implementation of BMPs would insure that the payments achieve concrete results that are better for society as a whole as well as producers.


In the United States, this could be done through the existing Conservation Reserve Program; in the European Union it would fall under the Common Agriculture Policy (CAP). Brazil could link credit for rehabilitating degraded or abandoned land to the guarantee that BMPs would be adopted and used by producers.

Subsidies to encourage adoption of BMPs
Many countries already make some subsidies and producer payments conditional on specific activities required of producers. Pressure could be applied to help insure that there is political will to link improved practices with such payments. It is also possible that BMPs could serve as the basis for a labelling system, spurring consumer preference and perhaps resulting in slightly higher payments to producers.

Soybeans example
For example, certified non-GM soybeans already command a premium on U.S. markets and are virtually required for market entry in Europe and Japan. Organic soybeans command an even higher premium. Government-sponsored conservation programs could be more effective if they linked government support to proven conservation results that also make production systems more sustainable over time.

If subsidies are going to be a socially meaningful part of agricultural policy rather than just a transfer payment or an overall price support, then they should at least guarantee a variety of public goods. Broadly, positive environmental impacts would fall in this category.

The model adopted in the US
This approach is not without precedence in the United States and other countries. In the United States, for example, producers have been required to comply with a range of different conservation programs in order to receive benefits. Such programs have been responsible for the following:

  • The increase of conservation tillage since 1989,
  • The continuation of the carrot-and-stick approach that producers have known since the 1930s,
  • The development of criteria used to determine subsidy payment eligibility,
  • The rationale for continued federal incentive payments to producers after 2002, and
  • The tightening up the administration of the program each year.

With the exception of the first item, however, the actual on-the-ground results have been far less than might have been hoped.

Credits

Extracts from "World Agriculture & Environment" by Jason Clay - buy the book online from Island Press

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