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
land clearing 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. 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 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.