Discussions on the extent payments for environmental services (PES) might enhance the transition to sustainable agriculture

24 Sep

By David Holland

There has been some evidence that the extra cost to producing organically grown produce is not much more than producing non-organic produce. (Rukmana 2010) Over the years, consumers have realised that the food value of such produce is higher and tend to buy the produce for a higher price. (A short history of FAQ; Groves 2010) That said, there are many other environmental services that can be achieved through agricultural production. The preservation of clean water in a catchment system is one that has a great importance, particularly to downstream users of the resource. (“Catchment protection and improvement grants”)

But can paid environmental services go hand in hand with the production of food? At the margin, there often is some benefits for agriculture from conservation measures. The prevention of soil erosion through employing areas of native vegetation as wildlife refuges is one outstanding example. (Moll et al 2007; Rukmana 2010) However, historically farm incentives have been predominantly tied to production. Some have been aimed at building social structures, but few have worked to improve environmentally sustainable values. (Dogra 2010)

One reason is that sustainability is often difficult to understand and even harder to quantify.

Walter & Stutzel (2009b) have attempted to create a measure of sustainability that on the face of it is difficult. Rauscher & Momtaz (2014) have a much more simpler method by identifying sustainable indicators and subjectively scoring them from available data and aggregating the results from a score card.

However, policy makers have not succeeded in engaging in sustainability assessments and produce adequate policy to steer agricultural businesses to preserve the environment, except in the pursuit of economic gain, most of which would be in achieving more production or higher profits. (Dobbs & Pretty 2004)

Dobbs & Pretty (2004) also bring out an equity problem. If many farmers are already doing the sustainable practice and governments, in an effort to get more farmers to operate in a sustainable way introduce incentive, then those practicing should be paid. The problem may be that for the small amount of improvement in this one sustainability measurement, a lot of money could flow from a government’s budget. Also, incentive like this can alter business models and make the government’s money the reason for the business.  An example of this can be seen in the operation of some cattle stations in Australia, which are being paid to destock as part of the federal government’s carbon farming initiative scheme. (“About the Carbon Farming Initiative”)



“About the Carbon Farming Initiative”, Department of Environment and Energy, Australian Government, Retrieved from http://www.environment.gov.au/climate-change/emissions-reduction-fund/cfi/about, May 2017.

“A short history of FAQ”, Food and Agriculture Organisation of the United nations, FAQ,, Retrieved from http://www.fao.org/about/en/, May 2017.

“Catchment protection and improvement grants”, NSW Water, Retrieved from http://www.waternsw.com.au/water-quality/catchment/living/grants/cpig, May 2017.

Dobbs, T., & Pretty J. N. (2004). Agri-environmental stewardship schemes and ‘multifunctionality’. Review of Agricultural Economics, 26(2), 220-237, Retrieved from http://www.jstor.org.ezproxy.csu.edu.au/stable/pdf/3700832.pdf?refreqid=excelsior%3A1c52853b88127f608c261d31e57d3336, May 2017.

Dogra, B. (2010, March 29). Science is being forced to help commerce, The Statesman Asia News Network (Kolkata), Retrieved from Charles Sturt university library https://doms.csu.edu.au/csu/file/fdb86a3c-2111-4d97-9ba7-b164ce92defe/1/dogra-b.pdf, May 2017.

Groves, Don (2010 May 14), A doco which could make you sick!, Food Inc., Retrieved from http://www.sbs.com.au/movies/review/food-inc-review, May 2017.

Rauscher, Raymond Charles, Momtaz, Salim (2014), Sustainable Communities: A Framework for Planning – Case Study of an Australian Outer Sydney Growth Area, Retrieved from http://link.springer.com/book/10.1007/978-94-007-7509-1, May 2017.

Rukmana, N. (2010, March 27). Cirebon plans to develop organic farms. The Jakarta Post, Retrieved from Indoniesia Organics http://www.indonesiaorganic.com/indonesia-news/cirebon-plans-to-develop-organic-farms-west-java, May 2017.

Walter, C., & Stutzel, H. (2009b). A new method for assessing the sustainability of land-use systems: Evaluating impact indicators. Ecological Economics, 68(5), 1288-1300, Retrieved from http://www.sciencedirect.com.ezproxy.csu.edu.au/science/article/pii/S0921800908005259, May 2017.


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