The effects of government policy in rich countries
Section D
Government policies have frequently compounded the environmental damage that farming can
cause. In the rich countries, subsidies for growing crops and price supports for farm output
drive up the price of land. The annual value of these subsidies is immense: about $250 billion,
or more than all World Bank lending in the 1980s. To increase the output of crops per acre, a
farmer's easiest option is to use more of the most readily available inputs: fertilisers and
pesticides. Fertiliser use doubled in Denmark in the period 1960-1985 and increased in The
Netherlands by 150 per cent. The quantity of pesticides applied has risen too: by 69 per cent in
1975-1984 in Denmark, for example, with a rise of 115 per cent in the frequency of application
in the three years from 1981.
In the late 1980s and early 1990s some efforts were made to reduce farm subsidies. The most
dramatic example was that of New Zealand, which scrapped most farm support in 1984. A
study of the environmental effects, conducted in 1993, found that the end of fertiliser subsidies
had been followed by a fall in fertiliser use (a fall compounded by the decline in world
commodity prices, which cut farm incomes). The removal of subsidies also stopped landclearing
and over-stocking, which in the past had been the principal causes of erosion. Farms
began to diversify. The one kind of subsidy whose removal appeared to have been bad for the
environment was the subsidy to manage soil erosion.
Academic Reading sample task – Matching headings
In less enlightened countries, and in the European Union, the trend has been to reduce rather
than eliminate subsidies, and to introduce new payments to encourage farmers to treat their
land in environmentally friendlier ways, or to leave it fallow. It may sound strange but such
payments need to be higher than the existing incentives for farmers to grow food crops.
Farmers, however, dislike being paid to do nothing. In several countries they have become
interested in the possibility of using fuel produced from crop residues either as a replacement
for petrol (as ethanol) or as fuel for power stations (as biomass). Such fuels produce far less
carbon dioxide than coal or oil, and absorb carbon dioxide as they grow. They are therefore
less likely to contribute to the greenhouse effect. But they are rarely competitive with fossil fuels
unless subsidised - and growing them does no less environmental harm than other crops.