Food and Fertilizer Technology Center - publications

Jun. 01, 2002

Integrating Agricultural and Environmental Policies

While the growth in Asia's agriculture has made a major economic contribution, it has also contributed to the region's environmental problems. Resource degradation _ soil erosion, water depletion and loss of soil productivity _ is undermining the sustainability of agriculture. While this is a global trend, it is very marked in Asia, where agriculture is based on the intensive cultivation of small land holdings.

This seminar was held to discuss the impact of modern agriculture on the environment, and how harmful effects can be mitigated by appropriate policies. Paper presentations discussed conservation policies and strategies, the cost of implementing these, and the development of sustainable agriculture for small farms in Asia. All participants were agreed on the importance of maintaining public sector research and development.

Public Sector Investment Essential

Integrating environmental and agricultural policies is likely to require a lot of public investment. Funding cannot be left to the private sector and commercial market forces. This is because improved agriculture of this kind is based on improved management. Good farm management, by its nature, must fit available resources and a changing market situation. It is therefore highly location specific. As a result, the costs of developing agricultural technologies tend to be high, while the returns are low. This makes it an unattractive investment for the private sector.

Integrated pest management (IPM) is a good example. Although IPM systems may use some commercial inputs, they are based mainly on the skilled management of biological inputs combined with improved cultural practices. There has been little incentive for the private sector to develop improved IPM systems, because there is little commercial profit from them. In all countries, most of the research into IPM, and the development of IPM systems, has been done by the public sector (government research institutes and state colleges).

Policies Which Encourage Farmers to Protect the Environment

It is clear that traditional price support programs, by encouraging more intensive agriculture, have often caused pollution and the degradation of natural resources. What are needed instead are policies aimed specifically at preserving the desirable by-products of farming, such as traditional rural landscapes. Such policies are likely to be different from current ones, and may benefit different farmers.

A major policy goal must be to give farmers an incentive to follow environmentally friendly agricultural practices. These may include taxes on inputs, price supports for goods produced by selected agricultural techniques, or income supports paid to farmers who carry out conservation practices. Another possibility is that farmers should be made to pay for any environmental damage they cause, whether this is pollution or depletion of environmental resources. Another approach is direct controls, such as requiring livestock producers to install waste treatment plants.

Most governments tend to prefer direct controls. However, monitoring and enforcing them can be difficult and costly. Also, since environmentally friendly agriculture tends to be based on efficient management of resources, the results may not be easy to evaluate by inspection e.g. short-term observation may not reveal whether a particular farmer is using pesticides or IPM to control crop pests. For direct controls to have any meaning, they must restrict farmers' choices. For this reason, they may limit the ability of farmers to meet environmental targets in the most efficient way.

Whatever regulations or incentives are chosen, they are likely to be costly and to involve funding by central government, probably using funds earned by other sectors. Since urban people are often in a majority, the extent to which they may be willing to subsidize the rural environment will depend on the perceived benefits, both practical and spiritual.


It is clear that the integration of environment and agricultural policies cannot be left simply to market forces. Indeed, it is the operation of market forces, with their focus on reduced production costs and higher yields, which have produced the environmentally damaging intensive monoculture seen in much of the world today.

If agriculture is to protect the environment, rather than damage it, Asian societies must give farmers an incentive to farm in ways to conserve the environment. Farmers must also be provided with the technology, so they can do this while earning a good income. Public sector research and development will be essential. The widespread success of IPM systems, most of which were developed by the public sector, show the potential of this approach.

It seems that the extent to which various countries will implement sustainable agriculture will depend on the agreement reached among special interest groups on how much they are willing to pay for it. Asia might benefit from the experience of the EU, a community of relatively wealthy countries with advanced agriculture and high farm incomes compared to most of Asia. A major problem in its reforms aimed at integrating agricultural and environmental policies is the cost of administering its regulations. Any policies based on complex regulations, or payments for which farmers must qualify according to complex procedures, are likely to have a high administrative cost in relation to the direct benefits received by farmers.

The integration of agricultural and environmental policies will cost money. The budget of any government is limited, and there are many competing demands for available funds. Agricultural economists should demonstrate the efficiency of investing in the environment. If investment into environmentally sound agriculture can be shown to be economically effective, this would be a big incentive for governments to adopt policies which would channel more funds into this area.

International FFTC Seminar on Integration of Agricultural and Environmental Policies in an Environmental Age

Held at the Korea Rural Economic Institute (KREI), Seoul, on

August 20-25

No. of countries participating: 9 (Indonesia, Japan, Korea, Malaysia, Philippines, Taiwan ROC, Thailand, United Kingdom, USA)

No. of papers: 15

No. of participants: 25 plus observers

Co-sponsor: Korea Rural Economic Institute (KREI)

Index of Images

Figure 1 Paddy Fields Retain Water and Replenish Groundwater

Figure 1 Paddy Fields Retain Water and Replenish Groundwater

Figure 2 Flooding Becomes More Common When Paddy Fields Are Used for Roads and Buildings

Figure 2 Flooding Becomes More Common When Paddy Fields Are Used for Roads and Buildings

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