Sustainable Agriculture
A natural part of the structural
adjustment process ?
Sustainable Agriculture:
balance three main goals



Environmental health
Economic profitability
Socio-economic equity
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
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
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
The Dutch Manure Quota System
Regulation and markets to achieve
environmental outcomes
and
Sustain rural communities
The Dutch System of Manure Quota
Impact on human health
especially infants
Also reduced vitality and increase
stillbirth, low birth weight and
slow weight gain in livestock
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
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
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%)

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
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
1. Cattle and turkey
2. Goat, sheep, fox, nutria and ducks
3. 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
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
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
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
Trading in Manure Production Rights
1995: Nutrient Accounting System proposed





In 1995 quotas for pork and poultry cut by
30% in response to the development of lownutrient 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
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
Regional Differences
and Geographical
Restrictions on Trading








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
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
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
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
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
Low-till or no-till
Slide from Southwestern Minnesota from www.stolaf.edu
Soil Resources
Higher Soil Organic Matter
• Nutrients for crop growth
• Soil aggregation and porosity
• Stabilizes soil against erosion
% Soil Organic Matter
9
8
7
6
5
4
3
2
1
0
Conventional
Rotation
No-Till
Farm Type
Slide from Southwestern Minnesota from www.stolaf.edu
Soil Resources
Lower Soil Compaction

Soil Compaction at 6 in.
(psi)

Enhances water infiltration
Prevents rapid runoff and soil erosion
600
500
400
300
200
100
0
Conventional
Rotation
No-Till
Farm Type
Slide from Southwestern Minnesota from www.stolaf.edu
Soil Resources
Higher Soil Moisture
(samples taken during grain-filling period –
Aug./Sept.)
% Soil Moisture
25
20
15
10
5
0
Conventional
Rotation
No-Till
Farm Type
Slide from Southwestern Minnesota from www.stolaf.edu
Soil Resources
Higher Soil Invertebrate Populations
# Inverts / .0125 m
3
• Contribute to Nutrient Recycling
• Maintain porous soil (burrowing)
• Control crop pests
20.000
15.000
10.000
5.000
0.000
Conventional
Rotation
No-Till
Farm Type
Slide from Southwestern Minnesota from www.stolaf.edu
Water Resources
Lower Runoff Volume


mL Runoff / cm Rain

Porous soil structures
Cover crops (crop
rotation)
Crop residue (no till)
}
increase
infiltration
1400
1200
1000
800
600
400
200
0
Conventional
Rotation
No-Till
Farm Type
Slide from Southwestern Minnesota from www.stolaf.edu
Water Resources
Lower N Loss in Runoff

Crop Rotation – deep roots of
perennials take up nutrients
No Till – low erosion prevents
nutrient loss
0.6
N Flux (mg N / cm rain)

0.5
0.4
0.3
0.2
0.1
0.0
Conventional
Rotation
Farm Type
No-Till
Energy Use
Lower Fossil Fuel Use
2,500,000
2,000,000
Fuel
1,500,000
Pesticides
1,000,000
Fertilizer
500,000
O
-T
IL
L
N
O
TA
TI
O
N
R
C
O
N
V.
O
N
(C
V.
-C
(C
-S
)
)
0
C

Decreased fertilizer and pesticide use
Decreased machinery and fuel use
Energy Use (kcal/acre/yr)

Farm Type
Economic Productivity
Higher Corn and Soybean Yields

Higher soil fertility
Higher soil moisture
Yield (bushels / acre)

160
140
120
100
80
60
40
20
0
NV
O
C
Corn
(bushels/acre)
Soybeans
(bushels/acre)
S)
C
(
(
N
O
I
AT
T
RO
/A
O
C-S
-A
A)
L
TIL
NO
Farm Type
S)
C
(
Environmentally friendly production
Shade
grown
coffee
Environmentally friendly production

Plantations - the alternative to native
forest logging – sustainable production
‘seal of approval’
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
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
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
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

Water in Australiaanother example
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
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
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.
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
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
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
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
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
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
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
Have markets achieved objectives



Water moved to more efficient users
Water moved to higher valued users
Water consolidate into larger units
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
A sustainable Water Management
Framework
Access Entitlement
trading and leasing
Access
Entitlement
Planning Hierarchy
National Strategy
Water trading
and leasing
Water
Allocation
Use Right
Capacity trading
and leasing
State Plan
Farm Business
Catchment Plan
Local plan
Capacity
Entitlement
Farm Water
Management Plan