Policy Options

Policy options for livestock-environment interactions can be classified in various ways:

- by livestock production systems, and by the environmental impacts in each system which policies are designed to act upon

- Overviews of policy in grazing systems
- Overview of policy in Mixed crop-livestock systems
- Overview of policy in Industrial systems
- Evaluate Livestock Management Systems

- by whether they seek to mitigate the negative, or enhance the positive, impacts of livestock on the environment,
- by the level at which they are implemented.
- by the type of policy instrument involved:

- Motivation, information and educational instruments
- Financial instruments
- Property-rights instruments
- Regulatory instruments
- Voluntary instruments
- Institutional instruments

It is common to use policies from more than one of these categories in combination to achieve a required objective.

There are also certain key principles of policy-making that cut across these types of instruments

Levels of Policy

Policies can be categorised by the level at which they are designed and implemented. Some of the policies described in the toolbox are macro-economic in nature. A good example are the decisions on exchange rates that may be needed to create incentives for offtake and stratification in grazing systems. While such policies have important implications for livestock-environment interactions, they are not likely to be changed because of those implications, as many other national and global factors will be involved, for better or worse.

The majority of relevant policies can be described as sectoral in nature, whether specific to livestock or environmental protection, generic to agriculture or addressing another sector such as transport. Examples are the building of pastoral associations at regional and national level, improved extension and emission trading mechanisms. Such policies can be targeted at optimizing livestock-environment interactions, but must also take into account other social and economic objectives.

Another set of policies are local in nature, involving building local institutions or setting and enforcing local regulations. Introducing grazing fee regimes is a good example. Such local policies can be highly specifically targeted on livestock-environment interactions, but need to take into account local conditions, and general principles of empowerment and participation to achieve sustainable results.

In practice, the majority of policies need implementation at two or three of these levels. Local policies are likely to need an enabling framework at sectoral level, sectoral policies need sensitive local institution-building to implement them. Both are likely to need an enabling environment at the macro-economic level. A good example is land taxation on forest frontiers where what is fundamentally a sectoral policy has to be aligned with national fiscal policy, but may also be better implemented if local government is empowered to set and collect land taxes.

Motivation, information and educational instruments

These instruments, which include agricultural extension, are especially useful where the livestock owner can capture the benefits of positive livestock-environment interaction. An example is extension of techniques involved in crop-livstock integration: cultivation and storage of fodder, optimal use of manure, use of draught animal power. But information provision is also necessary for mitigating negative livestock-environment interations, usually in combination with other types of policies which ensure that the costs are reallocated to the livestock owner.

Financial instruments

Financial instruments include policies on pricing, subsidy and taxation, also export and exchange rate policies, and investment in public-good infrastructure directly and indirectly relevant to livestock, and in research and development. Pricing, subsidy and taxation policies should generally observe the principle of recovering the full cost of goods and services, including the environmental cost, from the user, and of properly apportioning environmental benefits. This creates feedback mechanisms or incentives to producers for appropriate behaviour. Taxation policies, including environmental levies, should avoid offering perverse incentives to livestock producers, and hypothecation of taxes to purposes which enhance positive livestock-environment interactions should be considered.

Property-rights instruments

Property policies, most notably land-tenure policies, are vital in increasing the interest of livestock-owners in enhancing positive and mitigating negative impacts. Security of tenure (though not necessarily by titling) for mixed crop-livestock farmers, and the strengthening of local resource management institutions in grazing systems are examples. Property-rights policies also include systems of tradeable emission rights.

Regulatory instruments

Direct regulation has an important role to play in mitigating negative enviromental interactions, usually in combination with other instruments. Direct regulations can be seen as ensuring minimum standards, even when other (financial or motivational) instruments give an incentive for compliance at higher level. Zoning mechanisms for industrial livestock systems are an example.

Voluntary instruments

There are cases for direct (non-market mediated) subsidies to encourage compliance with particular objectives, though their use should in general be subsidiary to financial and property policies that pass full costs on to the producer. Examples are transitional subsidies which encourage producers to move quickly to new minimum standards, and cros-compliance mechanisms, where access to one subsidy is limited to those complying with standards set in another firled of activity (for example limiting drought subsidies to farmers preparing management plans). There may be a strong argument for subsidy in certain policies affecting arid and semi-arid grazing systems, because of the strong public-good elements in traditional systems and the exceptional welfare implications of traditional herding.

Institutional instruments

Institutions which implement or are effected by policies need to be remodelled and in some cases strengthened. Principles of devolution of decision-making, the right to use policy instruments, and hypothecation of revenues necessary for this, to lower/more local levels of government, and to producers’ associations, both traditional and non-traditional, are likely to be key.

Cutting across these types of instrument are several important general principles of policy formulation:

- Informed policy making - policy makers must make use of the best available information. An example is in grazing systems where new scientific work on non-equilibrium grazing has profound implications for policy
- Decentralisation, devolution and empowerment of local institutions
- The principles of "polluter pays" and "beneficiary compensates" - both costs and benefits of livestock production are felt as externalities by non-producers. Market and non-market mechanisms should be used to create feedback so that producers have an incentive to maintain and increase positive practices and curtail negative ones.

Key further reading

Young, M.D. Maintaining Harmony: Equitable and Efficient Means to minimise Adverse Impacts of Livestock on the Environment. Unpublished paper. [Click here to view the paper]

Mearns, R. 1997. Livestock and Environment: potential for complementarity. World Animal Review 88

Mearns, R. 1997. Balancing Livestock Production and Environmental Goals. World Animal Review 89.

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