Green Business Rising: Market-based environmental initiatives may be an idea whose time has arrived - Private Agro-Environmental Management - Statistical Data Included

Choices: The Magazine of Food, Farm and Resource Issues, Fall, 2001 by David E. Ervin, Frank Casey

Programs that allow last minute adjustments because of limited knowledge of the future effects of present economic and environmental decisions and actions will improve overall cost-effectiveness. Producers will also benefit from the flexibility to design, test, and implement -- with possible assistance from public agencies, third-party non-profit groups, or certified private consultants -- new green technologies and marketing strategies appropriate to local physical and economic conditions.

Institutional Innovations

Improved coordination in the delivery and administrative systems of the multi-layered federal, state, and local resource conservation programs decreases producers' transaction (search and negotiation) and administrative costs. One possibility is private contracting to bundle together several programs aimed at restoring or conserving environmental amenities. A contract of this type might be termed a Resource Stewardship Agreement (RSA).

The private sector can assist with RSA design, administration, and monitoring. Several states presently use staff funded by non-profit groups to implement conservation programs. In Oregon, the Oregon Wetlands Joint Venture Initiative funds a position within the State Natural Resource Conservation Service to process WRP applications. Similarly, crop consultants could represent several producers interested in designing agreements for an area or a watershed protection plan.

* The traditional delivery public agency roles are needed if unilateral and bilateral BEM initiatives are to grow. Technical advice and funding for production systems and monitoring remain essential, and public agency capacity in education and training should extend to integrated production -- environmental systems that reduce waste and afford green marketing opportunities. Reducing producer uncertainty concerning potential regulatory penalties in the early stages of BEM will foster cost-effective private investments. Public agencies can use various options for providing regulatory certainty in return for managing environmental goals and implementing environmental quality standards.

Alternative market institutions that help producers capture the full social benefits of their environmental management investments require investigation as well. One of the most crucial attributes of institution building is providing producers and consumers with timely and credible information about opportunities to sell environmental services such as wildlife hunting and viewing. Government agencies can assist in the development of such market institutions.

Technology Research and Development

Agro-environmental services often suffer missing market incentives for two different reasons. Some benefits extend geographically beyond the farm boundary, as with reductions in sediment and nutrients. Other benefits, such as the preservation of biodiversity, fall mostly to future generations. Public investment in developing production systems that reduce environmental wastes and public risk is essential to capture long term social benefits. The new R&D orientation requires increased public funding and an ongoing effort to enhance adoption of BEM in agriculture, and to respond to demands for agro-environmental services.