6. Conclusions
This paper has examined the role of government in providing (environmental) extension services to rural New Zealand. In the past, interventions have been based on: the belief that it was in the public interest to raise agricultural production and export; the premise that there were community-wide benefits from environmental conservation efforts; and that government was the body best able to bear the costs and risks of conservation schemes.
In comparatively recent times government has replaced this approach, at least at central government level, by a more tightly defined "economic" rationale which limits intervention to providing public goods and correcting externalities where collective action is demonstrably more effective than private alternatives.
This does not mean that government should not be involved in providing funds for environmental policy initiatives, but rather it tightens the basis for intervention. Coase provides a sound platform for considering such interventions, which seek to persuade farmers to act in environmentally sustainable way using their own resources, rather than give farmers direct assistance. In this way government would provide indirect assistance (through fostering the right approach, providing information, spreading education and some forms of technology transfer) rather direct assistance (subsidies for planting trees).
The indirect assistance would be specifically required to target environmental off-farm benefits so that the benefits are captured by the community either regionally or nationally. Furthermore, these benefits would have to be measured using an economic approach and set along side the costs. If the CBA was positive government involvement would be directed at "structural" assistance, which sought to build-up the infrastructure to support farmers who would be providing the on-farm expenditure required to put in place environmental sustainable farm management plans. As mentioned in Appendix A it is desirable that any environmental policy initiative should be voluntary.
As Figure 1 demonstrates the key to developing a structural indirect assistance package are the relationships between government and farmer, local government and farmer, and central and local government. Building up social capital may be one way of reinforcing these links through a variety of techniques, such as educational material, practical advice, and regular contact between all interested parties.
Policymakers will have to take into account the special characteristics of farming that separate it from other activities in the economy. Most importantly it is the scale of farming operations and externalities that could occur as a result of that large scale.
This requires that policy needs to be flexible and may be delivered differently in different regions depending on the environmental issues being addressed, the social and cultural make-up of the region and past history of interventions. Above all policy devised must take into account how the overriding financial and economic farming imperative interacts with farmer willingness to continue making improvements to the land that are consistent with government environmental policy objectives.
Policies will also have to be flexible enough so as to take into account different environmental problems in different regions, different ways of delivering educational material and transferring technology, and different behavioural response from farmers (other than you would of thought from economic first principles). By gaining a better understanding of how farmers react, policymakers will be able design more efficient policy that will achieve objectives at lower costs.
Contact for Enquiries
Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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