The 60-year-old set-aside scheme in America has distorted the land market by artificially reducing available land and raising its price, according to Professor David Ervin of Oregon State University*. The UK and EC should learn much from the US set-aside experience and avoid the mistakes, he says.
Control of surplus production in the US is diluted because farmers sensibly enrol their least productive land, intensify other inputs such as fertilisers, and may also bring new land into production.
The persistence of “set-aside schemes” encourages land saving productivity innovation, such as pesticides, and drains the public treasury for rents or other support. The US set-aside scheme was introduced in the 1930s as a short-term measure.
Experience in the US shows that even rudimentary targeting schemes improve the achievement of conservation objectives. “Left to their own choice, farmers will understandably divert those lands with the lowest profit potential or those that yield the conservation values most important to them. Such a process is not likely to yield the highest social conservation value to the taxpayer.”
If land can remain in profitable production and achieve the conservation uses, farmers and society are denied those benefits by diversion. Control of surplus production and its cost is much better pursued through price policy, Ervin believes.
* Countryside (The newspaper of the Countryside Commission) June 1994. David Ervin is Professor of Agricultural and Resource Economics at Oregon State University.
