Wednesday, 29 January 2014

"Farmers urged by WWF to do more to prevent flooding"

From the BBC:

Farmers getting public grants should be forced to capture water on their land to prevent floods downstream, environmentalists have said.

Green group WWF said farmers should get subsidies only if they agreed to create small floods on their own land to avoid wider flooding in towns and villages.

The average family pays £400 a year in grants to farmers. Farmers' leaders rejected the idea but said they would support incentives to farmers to prevent flooding.

WWF is already working with eight farmers on the young River Nar in Norfolk in an experimental project to restore upstream rivers to their original state.

Rivers have been squeezed into straight, fast-flowing channels over hundreds of years to hurry rainwater off fields. But that has contributed to flooding of prime agricultural land downstream. Fast-flowing rivers also carry silt which causes rivers to clog up.

The greedy so-and-so's!

They want compensation to compensate them for no longer getting subsidies for causing flooding on other people's land.

As ever LVT will sort this out. Farmland subsidies are negative LVT and so ought to be abolished anyway.

I observe that assessing the value of farmland is a lot trickier than assessing location values in developed, urban areas, but we could just reinstate Agricultural Rates to all non-forestry land at a token figure of about £20 per acre per year, regardless of whether the annual value is £10 or £100, and see what happens.

The point being, that farmers/landowners will stop farming the least productive bits of land, they can plant trees on these instead to do a bit of tax-free forestry, and if the land won't even support that, they can leave it as flood plain or allow other enthusiasts/landowners further downstream to reinstate 'natural' woodland.

The good news is that the bits which the farmers will stop using first are precisely the least productive bits - i.e. the least accessible bits (steeper slopes) and the most-likely-to-flood bits (right next to streams and rivers) and those are the best areas to reforest (helps soak up rainwater) or leave au naturel (flood barrier).

As a quid pro quo, we could apply the same tax exemptions which forestry gets to actual farming. Forestry incurs by and large no CGT, IHT, income or corporation tax on profits and is VAT-zero rated - and gets relatively little in the way of grants.

We might as well go further and exempt farmers and forestry businesses from Business Rates on their outbuildings or from having to deduct PAYE from their workers' wages (fair's fair).

Job done. Whether £20 per acre is the right amount, we will have to wait and see, the optimum cut-off amount might well be higher than that.


DBC Reed said...

Monbiot is not keen on the "chemical deserts" of East Anglia.As the drainage of the Fens in the 17th century lay down the pattern for stopping upstream flooding and straightening rivers ( and the increasing Dutch influence that helped on the "Glorious Revolution"),this revisionist attitude casts a lot of English History in a different, rather complicated, light.

Barnacle Bill said...

To me this is another example of how this government manage, whether by stealth or outright propaganda, to shift the focus/blame from their policies to other groups.
They managed to demonize benefit claimaints whilst the bankers exscaped scot free.
Now infighting between the greens and farmers over flooding. When really the lack of investment and leadership at Environment Agency should be in the spotlight.

Mark Wadsworth said...

DBC, Monby goes a bit far sometimes, methinks. Food is good.

BB, the EA/govt have screwed up on all fronts, they subsidise beahviour likely to cause flooding, they cut back on flood defences and then they bail out the insurance industry.

Kj said...

MW: farmland isn´t necessarily more difficult to assess than urban land. Lots of farmland, maybe as much as half, including pasture, is rented, and rents are widely known. But I like the idea of a minimum rent. It´s sort of an externality fee. And making agriculture, all the way up to the customer, tax-free, is a good swap from subsidies. Maybe people will realize the benefits of not taxing productive activity, there is certainly wide agreement left and right of the benefits of low taxes on the film industry.

Kj said...

I see the renegade ecologist is up to the flooding issue as well. I quite like the rewilding idea, if you can do it on large enough areas to sustain animals like wild horse, bisons and such.

Bayard said...

"They want compensation to compensate them for no longer getting subsidies for causing flooding on other people's land."

Can't see where it says that. Environmentalists are saying that the subsidies should be conditional on farmers doing certain things and the farmers, hardly surprisingly, are saying they already have enough to do.

The problem is not the current set-up, but years of "incentives" to do environmentally harmful things in the past. Anyway, most of this current fuss about flooding has been sparked by the floods around Muchelney in Somerset, where the water table is only a foot below the ground, even at the height of summer. There the problem is entirely due to the silting of the River Parrett at Langport. Downstream of Langport, the levels have exactly the same problems of faster-flowing rivers feeding them, run-off etc but are not flooded.

Having said that, I agree that farming subsidies should be abolished. Almost all of them simply allow farmers to sell their produce at a lower price and remain in business: it's the supermarkets that benefit.

Mark Wadsworth said...

Kj, what I meant was valuing farmland is not as easy as urban developed land, you need to know about soil types and flood risk and all manner of stuff.

Plus there is the argument that farmers generate their own land values by looking after the soil etc etc.

B, but you are still basically agreeing, just the long way round?

Kj said...

MW: not when there are market rents available. Do you need to look at what view there is, or what sort of neighbours live next door when you value urban developed land?

Mark Wadsworth said...

Kj, yes, farmland has rental values and those can be established.

But if would take a non-expert like me years to value every bit of farmland in the UK. It only took me two days to set up a system to value all residential land.

But I suppose it could be done by filtering out the lowest value land first (by charging a flat £20 per acre, £50 per hectar), and then charging a slightly higher rate for the best land (growing vegetables and fruit).

But as Adam Smith said, LVT for urban land makes good sense but LVT for farmland would not only raise very little money but there is a risk of discouraging farmers' efforts to improve the land.

Kj said...

MW: sure, it´s an important bit that. You value according to the rental value of poorly managed land of the same class (classifications of soils, topographics and all that are usually well documented already by farming agencies), i.e. the potential without any management efforts. It´s not more far-fetched than valuing urban land, and a Good Thing to take out this lower portion of land-prices that would otherwise be mortgaged and prohibiting new entrants. If not bringing in much revenue.

Sobers said...

The amount paid out to UK farmers in direct agricultural subsidies is c.£1.5bn.(This doesn't include payments that are for specific environmental schemes). There are 63m people in the UK, so that works out at roughly £24/head. So a family of four would be paying £100/year, not £400.

Mark Wadsworth said...

S, actually UK farm sub's are closer to £3 bn, but I take your point and I did wonder about that.

I can only assume that's a UK household's average notional contribution to total EU farm sub's, or some such maths fail.

(26m households x £400 = UK's contributions to EU budget, most of which goes on farm sub's).

However, if the BBC trips itself up and gives us evidence against the EU and against rent-seeking landowners, I'm happy to nod it through :-)

DBC Reed said...

It may be that the history of the Fenland is more complicated than more food hooray !, the onward path of progress whoopee!They built more cathedrals than anywhere in England pre Vermuyden so the agriculture must have been quite productive. And the locals tried to stop the river straightening and got called the Fen Tigers.They also hated the new class of super rich prairie farmer,hence the 19th century Littleport and Ely riots which appear to have been people going round beating up the rich.
Also all the alluvial soil that was uncovered by drainage schemes has disappeared ,often on the wind as I discovered while being caught in a veritable "duster" on the road out of Norwich a few years ago.Hence the chemical desert description by George M.

Sobers said...

The Regional Payments Agency are the govt body who pay out the farm subsidies. Their accounts are here:$FILE/RPA%20Annual%20Report%20and%20Accounts%202012-13%20v1.0.pdf

On page 101 it details that they paid out £1.7bn in payments to farmers.

Their own budget is £191m for 2012/13, detailed here (pages 15 and 16):$FILE/RPA%20Business%20Plan%202012-13%20final%20.pdf

Thus the direct cost of agricultural subsidies is c. £1.9bn/yr. DEFRA may well spend another billion faffing around with environmental payments and grants for rural businesses etc, but the actual cash cost of pure farm food production subsidies is less than £2bn /yr, or £30/head.

Mark Wadsworth said...

S, OK, but you agree that it comes to about £3 bn all in, once you include Scotland and NI.

And your much earlier contention that the Rural Payments Agency does not have detailed maps on who claims what for where turns out to be baseless.