Looking ahead: Elements of future strategies

Previous section The need for institutional development

The need to get prices right

Ideally, commodity prices should include all direct and indirect environmental costs in order to give market signals that embody the proper valuation of environmental goods. Prices should encourage efficient resource use and guide technologies to anticipated future scarcities. They should promote waste recycling and resource enhancing technologies. Astute pricing is a powerful tool and the instrument of choice where institutions are weak and where the financial or social costs of control become unreasonable. There may need to be differential prices between agricultural or livestock sectors and the rest of the economy. As a general rule a "level playing field" should be provided. Prices of different environmental and agricultural goods should be corrected for market failures where environmental costs and benefits are not adequately internalised. For example:

- eliminate subsidies for inputs such as water, concentrate feed, fossil fuel, fertilizer and reduce or abolish price support for livestock products and directly support farmers' incomes if that is socially or economically desirable;
- introduce cost recovery for communal water and grazing, and public services such as artificial insemination or clinical treatments provided to the producers (Umali et al., 1992);
- introduce levies or taxes for waste disposal;
- create price incentives for methane use and alleviate investment costs (preferred credit) for waste control and conversion facilities with proper targeting and fixed time scale;
- remove tax advantages for different sizes and types of enterprises where this is not warranted by public food or environmental concerns; and
- introduce equitable benefit sharing mechanisms for social and environmental goods.

Next section The need for technological change

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