DEBATE: Should we subsidise farmers for providing ‘public goods’, like protecting the environment?

Severe Flood Warnings In Place For The UK
We could reward farmers for public goods like flood prevention, planting trees to reduce carbon emissions, or biodiversity (Source: Getty)

Should we subsidise farmers for providing ‘public goods’, like protecting the environment?

Warwick Lightfoot, director of economics at Policy Exchange and lead author of Farming Tomorrow, says YES.

Brexit presents a big opportunity to improve the way we support farming and put the consumer at the heart of food policy. The EU’s Common Agricultural Policy has, at great expense, reduced agricultural productivity by lessening competition and supporting inefficient farmers.

That’s why it was so exciting to hear Michael Gove say that he wants to redirect future farm subsidies towards protection for natural and public goods, and increasing R&D to boost innovation and the sector’s long-term productivity.

Agriculture dominates land use in the UK, yet causes many unsustainable environmental outcomes. We need a new policy which provides an incentive for more sustainable practices, and increases the ecosystem services provided through land management to ensure we leave the environment in a better state than we found it.

If we reward farmers for public goods like flood prevention, planting trees to reduce carbon emissions, or biodiversity, we will all benefit.

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Chloe Westley, campaign manager at the TaxPayers’ Alliance, says NO.

Government interventions and subsidies almost always create “public bads”, by making life harder and more expensive.

Take the EU’s Common Agricultural Policy: its tariffs, subsidies, and regulations mean food prices are a fifth higher than they would be under market conditions.

Renewable energy subsidies increase the average household’s annual energy bill by nine per cent.

And childcare – which is heavily subsidised in the UK – is far more expensive for families than in countries like Australia, Canada, and Sweden.

It’s time for politicians to recognise that their meddling, even in the pursuit of “public good”, is having a negative effect on society.

I was encouraged by Michael Gove’s speech, where he announced some welcome reforms to the EU’s appalling land subsidies. But I would urge him to go even further, and put forward a long -term vision whereby competition and innovation drive our agricultural sector, not bureaucrats.

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City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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