What does Europe need from agriculture? – Perspective from the Environment

Clairie Papazoglou , Head of European Division, BirdLife International

There is no doubt that farming is a key sector of our economy and our society. The main business of farmers is, and should remain, the production of sufficient, healthy and safe food that consumers are interested to buy. With recent reforms of the CAP and the gradual opening up of world market, farming has become more of a “normal” economic sector where farmers act as entrepreneurs responding to market demand. Farming remains, however, very different from other sectors of the economy because of its extraordinary level of externalities- the side effects, both positive and negative, entailed by the fact that farmers are responsible for the management of much of our land. The role of farmers as land stewards is absolutely essential for a whole range of environmental concerns, as well as for other societal concerns such as landscape, which is the basis for Europe’s thriving tourism and recreation industries. The relationship between agriculture and biodiversity in Europe is also a particularly close one. Agriculture has shaped the European landscape, with much of Europe’s biodiversity intimately dependent on (mainly traditional) farming practices.

The production of food and other market goods should be essentially oriented by a regulated market. In this, agriculture is not radically different from other industries. We need to ensure it produces (especially food) that is healthy, safe, of good quality and that the negative externalities of production, such as water pollution, are minimised. To achieve this, we need a range of tools. We need good and solid environmental legislation to enforce basic standards and a “do no harm” approach to land use. We need to increase the use of market based instruments (taxation of inputs, water charging, potentially tradable permits etc) to send farmers the correct economic signals. Investment is needed in advisory services, education, research, promotion etc, to allow both farmers and consumers to move towards more sustainable production and consumption. Targeted support is also justified for the conversion of farms to high environmental performance systems such as organic farming or for the jump-starting of radical improvement technologies that are still too expensive because of lack of scale. Finally, it is essential to ensure a level playing field for all producers (inside and outside the EU) by negotiating world wide standards on environmental performance. While we should not use the environment as a fig leaf for old style protectionism, the climate crisis is increasingly exposing the weakness of world trade rules that ignore the way production takes place.

While the above measures can help to transform competitive farming into a truly sustainable activity, there is a huge issue of the need to reward farmers for the delivery of public goods such as maintaining wildlife habitats. These public goods cannot just emerge as side effects of high performance, low impact, competitive farming. They require farmers to take specific actions that carry an extra cost, or to lower their productivity levels below the economic optimum. The provision of public goods has, therefore, to be remunerated by specific and targeted public payments. Ideally we should strive towards a “public goods market” where farmers and land managers are rewarded on the basis of actual delivery (auctions systems and other sophisticated tools should be further developed). In the medium term, agri-environment is the best tool we have. A specific European issue of great importance is the maintenance of those traditional extensive farming systems that deliver outstanding public goods but are often economically marginal. We have to accept that an outstanding portion of public goods is delivered by marginal high nature value (HNV) farmers that are not competitive on the market and sometimes can’t even become competitive. We need a comprehensive strategy for supporting HNV systems through a combination of targeted financial support and Rural development investment that aims at boosting competitiveness by playing on strength of HNV systems such as quality products, landscape and nature, identity and link to local or specialist markets, economic diversification.

Most analysts agree that we are entering an era of high commodity prices. This is good news for European farmers that are very well placed to reap the benefits. As already discussed, some sectors and areas will not be able, on their own to tap into these opportunities and will need special support. On the other hand, rising commodity prises are likely to drive Europe’s most productive lands toward ever increasing intensification, putting huge strain on ecosystems, biodiversity, soils and water resources. As European Agriculture is becoming ever more market driven, appropriate tools need to be put in place to address widespread market failures, be it the damage caused by competitive farming or the positive land management delivered by farmers that goes un-remunerated.

Climate change places further importance on improving the sustainability of agriculture and its value to wildlife. The quality of agricultural habitats will determine the ability of many species to move effectively between protected areas in order to follow their shifting “climate envelopes”, i.e. the areas with the climatic conditions appropriate for the species in question. At the same time, in times of climate change, only healthy and robust ecosystems will be able to deliver the services and products our society needs. Water stress is likely to become a major societal problem in vast parts of Europe. Furthermore, most of the adaptation strategies we need to enact, such as large scale floodplains restoration to mitigate the impact of increased floods and droughts, will require deep changes in the way farmers use the land. In the face of climate change we need to follow some basic strategies. We must improve ecosystem health in order to ensure that they can resist climate change. We need to conserve water, soil and biodiversity resources, also as an insurance against a potential future where food supply could become an issue. We have to minimise the emissions from agriculture (mainly due to livestock, fertiliser and soil carbon loss).

A climate related issue that merits special consideration is bioenergy. Farming should give its contribution to the production on renewable energy but this must deliver real emission savings, not increase pressure on other natural resources, and take into consideration the fact that land is the ultimate limited resource. We should incentivise farmers to diversify their income through small and medium scale production of all available renewable (solar, wind, biomass etc), within clear sustainability standards. We should strongly promote the production of bioenergy from waste streams (while preserving soil fertility etc). There is a strong case for the development of high efficiency biomass energy applications, mainly in heating and combined heat and power production, but these must be within a framework of strict sustainability standards and sound land planning policy. Bioenergy targets should not lead to the large scale displacement of existing agricultural production as that would inevitably lead to large scale conversion of carbon and biodiversity rich habitats in developing countries. On the other hand, we should immediately stop any support to inefficient and unsustainable bioenergy, particularly to most current biofuels which have now been shown to have environmental costs greatly outweighing their benefits in a majority of cases.

Concluding, the debate is not about “either” profitable agriculture and food “or” high environmental standards. European agriculture must be about both at the same time. Climate change will probably make Europe a breadbasket for the world, but this will only be possible if we have well functioning ecosystems, wise use of clean water and conservation of our soil.