xlviii Sustainable Agriculture and Food
are diffuse, or non-point, in nature. It is impossible for inspectors to ensure com-
pliance on hundreds of thousands of farms in the way that they can with a small
number of factories. Regulations are also used to eliminate certain practices, and
include bans on spraying of pesticides close to rivers and on straw-burning in the
UK, and the mandatory requirement to complete full nutrient accounts for farms,
such as in the Netherlands and Switzerland. A final use for regulations is the des-
ignation and legal protection of certain habitats and species, which are set at
national or international levels.
Economic instruments can be used either to ensure that the polluter bears the
costs of the pollution damage and the abatement costs incurred in controlling the
pollution. They can also be used to reward good behaviour. A variety of economic
instruments are available for achieving internalization, including environmental
taxes and charges, tradable permits and the targeted use of public subsidies and
incentives. Environmental taxes seek to shift the burden of taxation away from
economic ‘goods’, such as labour, towards environmental ‘bads’, such as waste and
pollution. Clearly the market prices for agricultural inputs do not currently reflect
the full costs of their use. Environmental taxes or pollution payments, however,
seek to internalize some of these costs, so encouraging individuals and businesses
to use them more efficiently. Such taxes offer the opportunity of a ‘double divi-
dend’ by cutting environmental damage, particularly from non-point sources of
pollution, whilst promoting welfare. However, many opponents still believe that
environmental taxes stifle economic growth.
There are now a wide range of environmental taxes used by countries in Europe
and North America. These include carbon and energy taxes in Belgium, Denmark
and Sweden; chlorofluorocarbon taxes in Denmark and the US; sulphur taxes in
Denmark, France, Finland and Sweden; nitrogen oxide charges in France and Swe-
den; leaded and unleaded petrol differentials in all EU countries; landfill taxes in
Denmark, the Netherlands and the UK; groundwater extraction charges in the
Netherlands; and sewage charges in Spain and Sweden. However, environmental
taxes have rarely been applied to agriculture, with the notable exception of pesti-
cide taxes in Denmark, Finland, Sweden and in several states of the US; fertilizer
taxes in Austria, Finland, Sweden and again several states of the US; and manure
charges in Belgium and the Netherlands (Ekins, 1999).
The alternative to penalizing farmers through taxation is to encourage them to
adopt non-polluting technologies and practices. This can be done by offering
direct subsidies for adoption of sustainable technologies, and by removing perverse
subsidies that currently encourage polluting activities. An important policy princi-
ple suggests that it is more efficient to promote practices that do not damage the
environment rather than to spend on cleaning up after a problem has been created.
Many governments provide some direct or indirect public support to their domes-
tic agricultural and rural sectors. Increasingly, payments are being shifted away
from being production linked, such as through price support or direct payments,
to being retargeted to support sustainable practices. Generally, though, only small
amounts of total budgets have been put aside for environmental improvements