Land use policy and public goods

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This week a group of organisations that work on environmental, agricultural, land use and rural policy are hosting a conference to discuss how best to design policies that incentivise the provision of public goods. ‘Land use’ simply means the way that land is managed and how it is used to produce desired goods and services. This blog will outline why Brexit means that this is a key time for land use policy, what public goods are and the focus of this conference.

Both environmental and farming groups have cited Brexit as an opportunity to design new agricultural and land use policies that suit the domestic context in the UK and in Scotland.

For example, in an open letter to Michael Gove, the UK Secretary of State for the Environment, Food and Rural Affairs, a coalition of environmental and health groups stated that the “Agriculture Bill presents a once in a generation opportunity to secure public goods for society”.

Similarly, in written evidence to the UK Parliament on the Agriculture Bill, the National Farmers Union Scotland (NFUS) stated that “A future agricultural policy that fits the needs and profile of Scottish agriculture, and all that it underpins, is the real prize that can be secured from the UK’s withdrawal from the European Union”.

Public goods

Much of the discussion concerns incentivising farmers and other land managers to provide public goods. In a land-use context, public goods include:

  • flood protection
  • water purification
  • carbon sequestration (where carbon dioxide is removed from the atmosphere and the carbon is stored, often by new tree growth)
  • biodiversity enhancement
  • landscape value
  • recreation opportunities.

SPICe will be publishing a research briefing later this week on the topic of public money for public goods.

Public goods have two characteristics, they are:

  • Non-excludable. Their benefits cannot be confined to those who have paid for them.
  • Non-rival. Consumption by one person does not restrict consumption by others.

Public goods are therefore subject to a problem where people can consume them without paying for their supply. This means that it is difficult or impossible to supply them for a profit, and causes their under-supply.

Land Use and Environment Conference

In light of this, a range of rural and environmental research organisations have put policies that reward public goods at the heart of this year’s Land Use and Environment Conference, taking place 28-29th November. A group of organisations organise this biennial event to discuss important and upcoming aspects of land use policy. This year, the conference is being organised in conjunction with a meeting of the Cross Party Group in the Scottish Parliament on Rural Policy 2018-19, which will take place at Dynamic Earth on the evening of 28 November 2018.

One of the criticisms that has been made of the Common Agricultural Policy (CAP) by the Scottish Rural College (SRUC) and other groups – the current financial support system for agriculture – is that the Pillar I payments, which make up three-quarters of the CAP budget, reward farmers and landowners just for having land, instead of rewarding them for any benefits they may provide. In the Conference Background, the organisers say:

“it is important to remember that most – if not all – of the questions being asked about how best to use public funding to obtain public goods have been around for a long time. What Brexit has done is to bring those questions more to the forefront of a much greater number of people’s minds. In particular, it is now being recognised that any funding that goes to land managers in the future is going to have to be argued for – and justified – against other calls on public funding such as health and education.”

Rather than discussing the justifications for including public goods as a focus for any new agricultural support policies, the conference is centred around how best to implement such policies:

“This conference will seek to help inform and shape the debate about how best to reward farmers, foresters and other land managers for delivering public goods from their land management practices. In particular it will provide a forum to help develop thinking of practical implementation on the ground and what that means for policy development.”

Policies on public goods after Brexit in England, Wales and Scotland

There are policy commitments in England and Wales to incentivise the provision of public goods after Brexit. Under the UK Agriculture Bill, introduced to the UK parliament in September, England will replace the CAP with an Environmental Management Scheme that pays land managers for the provision of public goods. Wales’s proposed Land Management Programme will also have a public goods aspect.

There are currently no proposals for agricultural policy in Scotland after the end of the transition period in 2024, as set out in the Stability and Simplicity consultation. One of the key recommendations from the final report from the Scottish Government’s Agriculture Champions, appointed by the government in 2017 to advise on the development of a strategy for the sector, is that:

“Stewardship of the countryside should be a key part of future policy. The policy priorities to be supported must cover purely public goods such as wildlife and carbon sequestration for which there is no market mechanism, at least at present, but can also include joint public-private benefits – such as reducing waste and improving soils which are good for the individual business as well as the environment and society.”

With Brexit fast approaching, Scotland has an opportunity to set its own land use and agricultural policy agenda. Organisations that are influential in this area, including Scottish Natural Heritage, the Scottish Environment Agency and the SRUC, are involved in this event. This conference, in association with the Cross Party meeting, therefore may reflect the direction of travel for land use policy after the UK exits the EU.

Nick Harvey, RCUK PhD Intern, SPICe