Sustainable Agriculture

1. Sustainable Agriculture A natural part of the structural adjustment process ?

2. Sustainable Agriculture:balance three main goals • Environmental health • Economic profitability • Socio-economic equity

3. Commodity agriculture • Agriculture is incorporated into an global and corporate-controlled food system • Driven by twin goals of productivity and efficiency • Maximizing profitability by balancing 1) land 2) labor 3) capital and 4) management

4. Why the change • Industrial Agriculture now creates multiple problems - threat to the environment - threat to natural resources - threat to the quality of life for farmers and rural communities - and the society as a hole

5. Approaches to change • Government can regulate and set standards – code of best practice • Let the invisible hand of the market do the job • Post industrial approaches – people driven solutions

6. The Dutch Manure Quota System Regulation and markets to achieve environmental outcomes and Sustain rural communities

7. The Dutch System of Manure Quota Over-application of manure effluent can result in runoff and ponding of water on the soil surface. Both activities can lead to surface and ground water contamination. Bacteria and nitrate are the two most dangerous pollutants in drinking water Impact on human health especially infants Also reduced vitality and increase stillbirth, low birth weight and slow weight gain in livestock

8. Holland: The Environmental Problem in Animal Agriculture: Between the early 1960s and the mid 1980s: • Pigs increased by 10 million (450%) • Poultry increased by 50 million (125%) • Consequently, a manure surplus developed of + 19% • The EU standard of 50mg of nitrate pr liter of groundwater was exceeded on 60% of agricultural land • First warning sounded in the 1970s

9. 1st Policy Action: A Moratorium • the Interim Law for Restriction of Pig and Poultry Farms (November 1984). • No new farms in the worst affected areas • Restrictions on expansions on existing farms (10%) It was not enough: • the number of pigs went up with 7.5% per year from 1983 to 1987 • Eutrophication of surface and ground water became of international concern (cut nutrients into North Sea by 50%)

10. The 3 Phase Plan Phase I: 1987 – 1990 • The Manure Law (Phosphate control) • Manure quota and book-keeping system • The Soil Protection Act • Application rates and timing of land application Phase II: 1991 – 1994 • The Environmental Management Act • Guidelines on ammonia and cattle farming under the Nuisance Act Phase III: 1995 – 2000 • Markets for manure quotas established

11. Overview of the Quota System • Manure production rights limited to 125 kg of phosphate per hectare • Farmer grandfathered a ‘reference amount’ • Based on inventory of animals and standards for manure production for 3 animal categories • Cattle and turkey • Goat, sheep, fox, nutria and ducks • Swine and poultry • Difference between phosphate intake through feed and output through meat, egg etc • Established phosphate deficit and surplus farms • Deficit farmers could continue to expand • Surplus farmers needed additional registered manure production rights for expansion

12. Trading in Manure Production Rights 1987 – 93 : • transfer of manure production rights restricted to land transfers: • Part of transfers of whole farm • With marriage and heritage • With annulment of lease contract • Expansion only by buying land • However, If buying additional land the associated ‘reference amount’ would first fill the gap on existing land. • Expansion of animal production therefore limited to new farms on cropping land

13. 1994–97: Relaxed trading • These restrictions limited investment • Manure production right renamed manure quotas 1) land based and 2) non-land based quotas 1) 125 kg of phosphate per ha of land 2) diff. between land based quota and the animal based reference amount • Both 1 and 2 made animal specific • Only non-land based quotas were tradable

14. 1994–97: Relaxed trading • Reference amount adjusted for improvement in feed quality • The difference between reference amount and adjusted reference amount made non-tradable • Quota cut by 25% when traded • Could only trade from animal category 3) to 2) to 1), not in reverse order – restrict expansion in swine production

15. Trading in Manure Production Rights

16. 1995: Nutrient Accounting System proposed • In 1995 quotas for pork and poultry cut by 30% in response to the development of low-nutrient feed, • 1997 further problems with swine fewer, policy move to reduce swine quotas by further 25% by 2000 - farmer protest • 1 Jan 1998 NAS and building regulation introduced and the 30% abandoned • 1 Sept 1998 pork quotas reduced to reflect 90% of herd as part of the aim to reduce herd by 25% by 2000 • Quota buy-out program for the swine sector

17. 1998 Nutrient Accounting System • Farmers challenged 10% reduction in court. In 2000 the Court upheld decision but exempted the planned 15% reduction in 2000 • Nutrient accounting for phosphor and nitrate • Nutrient surplus subject to a high tax to encourage farmers in surplus regions to truck manure and spread it on grain farms in deficit region • Building requirements for new buildings to reduce ammonia emissions • Condition for purchase of extra quota: improvement for buildings to reduce ammonia emission

18. Surplus: manure production in excess of 125 kg of P2O5/ha Deficit: less than 125 kg Surplus region: small intensive farms Deficit region: larger farms with little experience in confined livestock production Trade allowed within regions And from surplus to deficit In surplus regions expansion also required purchase of ammonium rights – these only tradable within counties Reduce willingness to expand in surplus regions Regional Differences and Geographical Restrictions on Trading

19. Evaluation: • Price of quota: Great variation between regions, animal categories and over time • Volume of trade • very low 1.5% of total quota the first year • By 1997 accumulated to 8.1% and 9.5% for surplus and deficit regions respectively

20. Evaluation: • Reasons for low trade: • Administrative procedures; buyers had to demonstrate adequate manure disposal plan. During first year 37% of plans rejected. Therefore high transaction costs (as much as 17% of price) • Policy uncertainty • Initially many had excess quotas (10-25%, gave high numbers for reference amount calculations). Impact on demand and price • Restrictions between regions and categories impeded trade • The 25% retirement rule increased the willingness to accept

21. Evaluation • Geographic pattern of trade • Encouraged farmers in surplus region to sell land and quota and set up in deficit region • Encouraged exit adjustment • Environmental effectiveness • Animal numbers and nutrients emission have been reduced – but why and by how much? • Especially pork farmers have not been convinced of the environmental benefits • Dynamic Effects and Innovation • Incentive to development of methods to reduce emission. Especially nutritional development in the pork industry

22. Post-industrial approaches Less input intensive farming methods Focus on value and quality • Civic agriculture • Organic farming • Alternative agriculture • Biodynamic farming • Ecologically grown • Local food systems • Community supported agriculture The Environmentally friendly producer and consumer - Eco-labeling • Shade grown coffee • Plantation timber Fair Trade not Free Trade

23. Low-till or no-till Slide from Southwestern Minnesota from www.stolaf.edu

24. Soil Resources Higher Soil Organic Matter • Nutrients for crop growth • Soil aggregation and porosity • Stabilizes soil against erosion Slide from Southwestern Minnesota from www.stolaf.edu

25. Soil Resources Lower Soil Compaction • Enhances water infiltration • Prevents rapid runoff and soil erosion Slide from Southwestern Minnesota from www.stolaf.edu

26. Soil Resources Higher Soil Moisture (samples taken during grain-filling period – Aug./Sept.) Slide from Southwestern Minnesota from www.stolaf.edu

27. Soil Resources Higher Soil Invertebrate Populations • Contribute to Nutrient Recycling • Maintain porous soil (burrowing) • Control crop pests Slide from Southwestern Minnesota from www.stolaf.edu

28. Water Resources Lower Runoff Volume } • Porous soil structures • Cover crops (crop rotation) • Crop residue (no till) increase infiltration Slide from Southwestern Minnesota from www.stolaf.edu

29. Water Resources Lower N Loss in Runoff • Crop Rotation – deep roots of perennials take up nutrients • No Till – low erosion prevents nutrient loss

30. Energy Use Lower Fossil Fuel Use • Decreased fertilizer and pesticide use • Decreased machinery and fuel use

31. Economic Productivity Higher Corn and Soybean Yields • Higher soil fertility • Higher soil moisture

32. Environmentally friendly production Shade grown coffee

33. Environmentally friendly production • Plantations - the alternative to native forest logging – sustainable production ‘seal of approval’ Forest clearing project sponsored by the Indonesian government.

34. Fair trade – not free trade FairTrade Mark –Banana from Haiti an independent guarantee that disadvantaged producers in the developing world are getting a better deal

35. Civic Agriculture Smaller scale, locally oriented enterprises Direct marketing offers farmers the advantage of: High value products: organic grown, specialties grass fed free range Cut out of middle-level handlers pick-your-own, farm stands growers marked, e-mail orders, consumer participation in production Craft-style products Better land management practices Healthier soils and animals A community connection about food production

36. Trends in: Direct sales • 1992 - 86.000 farmers in US mainland reported direct sales • 1997 – 97.000 farmers in US mainland reported direct sales • 5% of all farms with sales totaling US $ 500 million, but less than 1% of all agricultural sales

37. Demographic characteristics • Farmers in areas in and around metropolitan areas can benefit • Farmers in areas with a population of affluent, well-educated urban consumers 13% of all farms in Northeast 3.1% of all farms in the South 4% of all farms in the Midwest

38. Water in Australia- another example

39. Historical context • Policy legacy resulted in over allocation of water and development of unsustainable land • Mechanisms needed to • facilitate and encourage a reallocation of resources to more efficient and higher valued producers in more sustainable locations • provide water for ecosystems

40. Council of Australian Governments Following international trends in 1994 CoAG introduced a reform package: • Pricing • Water entitlements • Water Trading • Formally recognizing the environment • Institutional reforms • Consultation and public education Part of an IGA on a National Competition Policy and related reforms

41. Council of Australian Governments 2003 review identified three shortcomings • uncertainty over the long-term access to water was still hampering investment; • Current water market arrangements are preventing markets from reaching their full potential; • concern over the pace of securing adequate environmental flows and adaptive management systems.

42. 2004 National Water Initiative • Clear, secure and nationally-compatible characteristics for water access entitlements defined as a perpetual share of the consumptive pool • a transparent, statutory-based water planning process defining the consumptive pool and the process of allocating water • statutory provisions for environmental and other public benefit outcomes

43. 2004 National Water Initiative • returning currently over allocated or overused systems to environmentally sustainable levels of extraction • progressive removal of barriers to trade in water • assignment of risk arising from future change in the availability of water for consumption • address future adjustment issues that may impact on water users and communities

44. The Murray Darling Basin • 1996 Cap on water use at 93/94 level • 2002 Living Murray process • 2004 IGA on addressing overallocation as the first step to provide 500 GL for six sites • Water Sharing Plans – NWI no guidelines as to how to share the cost of this

45. State legislation and policy • South Australia 1997, NSW 2000, Queensland 2000 – New Water Acts: • Separation of land and water • Separation of ownership and use of water • Planning processes • Water markets • Environmental issues • But absolutely inconsistent across states

46. State legislation and policy 2004 - Victoria White Paper: • Introduce the separation of land and water – max 10% of total entitlements of source • Share based entitlement • Non-tradable site use licenses linked to land • Some channels need to be closed – compensation for loss of land value • New tradable low security license against 20% reduction in pool for the environment

47. State legislation and policy Victorian White Paper continued: • Channel capacity entitlement • Separate capacity charge – better economic signals • Government committed to provide the initial water for environmental flow • Promise to consider supporting communities suffering from export of water out of districts

48. State legislation and policy • Generally changed allocation practice • Transferred most risk management from water authorities to irrigators • Water markets looked upon as one of the main instruments to alleviate impact of new policy paradigm by both Federal, State and Basin

49. Have markets achieved objectives • Water moved to more efficient users • Water moved to higher valued users • Water consolidate into larger units

50. Conclusions • Change in policy paradigm in Australia aggressive due to the extend of the impact of past policies • Transferred most risk management to irrigators • Reductions in entitlement inevitable in most catchments • Water markets relied upon to manage this process