Public Goods for Public Money

“Public Goods for Public Money” has become a bit of a mantra, not just for me, but for a wide range of organisations and individuals fed up with one failed reform of the Common Agricultural Policy after another.

I was questioned yesterday by Daye Tucker (@RuralLeader) who argued that farmers provision of affordable food was a Public Good.

Now I am no environmental economist, but I can do no better than quote from a Wildlife and Countryside Link submission to Defra on the New Environmental Land Management Scheme proposals for Pillar 2 funding in the “newly reformed” CAP.

” Public Goods for public funding is a long established principle, and has been adopted by Government as a key guiding principle in its approach to CAP reform. In the context of environmental land management, this principle is inextricably linked to the need for a robust [regulatory] baseline, and the degree to which a certain priority can be described  as a public good will influence the point at which the regulatory baseline is positioned. Biodiversity is often cited as the most unambiguous public good.

Public goods can either be non-excludable or non-rival (or both).

Non-excludable goods are those where one person benefits from something, another is not excluded from the benefits it confers. Non-rival goods refer to a good that if consumed by one person, it does not reduce the amount available to others.

For example, a farm may produce both food and an attractive landscape. The landscape is a public good: anyone can enjoy it, and it does not get used up by people. The Food is not a public good – the farmer can choose who to sell it to and “exclude” other potential customers; once it is eaten it is no longer available to anyone else.

By definition, public goods are rarely marketable – the farmer receives a price for the food, but would struggle to charge people for enjoying the landscape. In fact in many instances market forces will reduce the supply of public goods because land management instead decide to produce marketable goods” – this is called Market Failure.

“There is a clear societal justification to use public funds to support private landowners to provide public goods – both for the societal benefits they bring, but also because normal market conditions will often act against them.”

The other point is that when society invests in public goods provision, this contributes to a sustainable economy – through environmental protection, but also socio-economic benefits for local communities, and production benefits for farmers.

I guess we will have to keep chanting this mantra for the next seven years now…..

About Miles King

UK conservation professional, writing about nature, politics, life. All views are my own and not my employers. I don't write on behalf of anybody else.
This entry was posted in agriculture, biodiversity, Common Agricultural Policy, European environment policy, public goods and tagged , , , , , , , . Bookmark the permalink.

2 Responses to Public Goods for Public Money

  1. Steve Hallam says:

    I presume that Daye (or should that be Dave?!) Tucker’s point is that using public money to subsidise the provision of essentials such as food, via the CAP, is a ‘good’ thing, and therefore should be treated as a Public good. As you point out this is simply definitionally wrong. But surely the point of the CAP is to increase farmers’ incomes, which results in food prices in the EU being higher than they otherwise would be? So by Tucker’s argument, should the CAP not be a public ‘bad’? Or have I missed something?

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