5.2.3 Impact

Editor: Will Melling Writers: Bence Borbely, Trevor Chow, Tom Nott, Yang Zuo

5.2.3 Impact

There would be immediate and dramatic improvements from applying a ‘Pay-to-Pollute’ principle to the ELMS. The economics of agriculture would be transformed and the use of fertilisers, pesticides, herbicides, and antibiotics in agriculture significantly reduced over the long-term. Farmers would use substitutes- working with nature and halting the decline of carbon in the soils. Crop rotation, mixed-farming approaches, which produce manure for fields, and greater efforts to prevent the loss of the now more valuable soils would all feature more strongly187 . These changes, along with the financial rewards for transitioning to sustainable farming methods, both with Tier 1 payments and reduced input costs, would remove the externalised advantage over intensive agriculture over organic and less intensive methods. The livelihoods of farmers would be improved, not harmed. As the NFU detailed, if the total budget could be preserved, there would be considerable sums available for encouraging investment and improving competitiveness188. The ‘Pay to Pollute’ principle would therefore not cost anything to economy in aggregate, revenue would go to rewarding farmers for good practice, some of which, in the form of Tier 2 and 3 payments, could go to repairing past damage and enhancing natural environment. Beneficiaries would be the less chemical-intensive farmers and more marginal farmers- such as the small family mixed farms of lowlands and uplands. They would have more to offer to the public good because they have retained a better environment and would be rewarded accordingly189 .

There would be direct beneficiaries from making polluters pay. The gainers would include water and sewage treatment companies and hence water customers since water quality in the rivers and the aquifers would be less polluted and less costly to treat190. Improvements to soil, water, and air quality, with all the benefits and public goods these provide, would be incentivised and provided at minimum cost to the taxpayer and with no harm to livelihoods. Again, this is a case for a genuine win-win-win: positive environmental outcomes, leaner and more profitable farm business operations, and the increased long-term viability and productivity of UK agriculture.

5.3 Recommendations

● Farmers should not be paid to provide ‘air quality’ as a public good. This is because as a non-excludable and difficult to measure good, it would be very difficult to demonstrate farmers provision of it.

187 Dieter Helm, Green and Prosperous Land: A Blueprint for Rescuing the British Countryside (Harper Collins 2019) pp216 188 National Farmers’ Union, 'Arrangements for English Agriculture and Horticulture outside the European Union. Policy options, circulated to members' (National Farmers' Union, 2016) pp15 189 Dieter Helm, Green and Prosperous Land: A Blueprint for Rescuing the British Countryside (Harper Collins 2019) pp90 190 Dieter Helm, Green and Prosperous Land: A Blueprint for Rescuing the British Countryside (Harper Collins 2019) pp198

Editor: Will Melling Writers: Bence Borbely, Trevor Chow, Tom Nott, Yang Zuo

● However, there should be tough regulation on any existing practices which cause significant air pollution. These include activities like burning waste (see ‘Regulation’ section of the paper’). ● The cost of using ammonia should also reflect the air pollution caused by its use, following the ‘Pay to Pollute Principle’.