Analysing the regional and national economic consequences of moving towards sustainable farming systems within the UK
This thesis is an attempt to estimate the regional and national economic consequences of a wholesale move to sustainable agricultural systems in the UK. The study reviews definitions of agricultural sustainability, and draws a distinction between sustainable and organic farming systems. Farm-level definitions of sustainability are developed for all the main farm types encountered in the UK, and key indicators with targets are developed to assess and monitor any move towards sustainability. Linear Programming models are constructed, for 23 representative UK farm types under conventional and sustainable farming scenarios, to estimate the farm-level impacts of the adoption of sustainable farming at some point in the future. The farm-level models are aggregated to regional and national levels to estimate the likely changes in UK agricultural production of a more widespread adoption of sustainable farming practices. The wider economic effects of these changes at the regional and national levels are then examined by the use of output, income and employment multipliers. The study found that the biggest financial losses were predicted to be on intensive livestock farms, and in the more productive agricultural regions in the East and the South. Losses in net farm income were greatest on pig and poultry farms on which incomes fell to 33% of the conventional incomes, specialist dairy incomes fell to 47%, and on mainly dairy farms they fell to 58%. Average incomes on cropping and large LFA farms fell only slightly to 97% of the conventional scenario, whilst incomes on small LFA farms rose slightly to 102% an on mixed lowland farms they increased to 119% of the conventional scenario. The aggregated results project a fall in total net farm income for the UK to 85% of that under conventional farming. However, the total net farm income for Scotland would rise, whilst the biggest losses would be projected for Wales and Northern Ireland. Agricultural output was projected to fall by £2.42 billion, leading to an indirect fall of £1.58 billion in the farm supply industries, and a further induced fall of £1.68 billion in household spending, totalling a net loss of output of £5.66 billion. There would be a negative direct effect on household incomes however of £167 million, with indirect losses of £84 million and induced losses of £565 million. Direct employment in agriculture was also projected to fall by 28,830 FTEs, which would lead to an indirect loss of 31,740 FTEs in industries supplying farming, and induced losses of 30,292 FTEs in the wider economy leading to an overall loss of 90,862 FTEs. Gains in direct agricultural employment were however projected for the South East of England, and the West of Scotland. The North West of Scotland being the only region, where there would be a net overall increase in employment. Nationally sustainable agriculture would lead to a significant fall in the total income from farming, yet there would be substantial variations around the country, and between farm sectors. Indirect effects on the farm supply industries, and induced effects on households spending would lead to substantial losses, which would need to be offset against the environmental gains. The implications of these results for agricultural policy are discussed.