What can be done?

Previous section Underlying causes

Policies need to be designed to correct negative environmental effects of livestock production which are not reflected in product and input prices. These policies should address the underlying causes of environmental degradation and must be flexible, site-specific and well targeted.

Instruments to enhance positive and mitigate negative environmental effects include pricing, regulations and institutional development. The collective purpose of these instruments is to establish the use of feedback mechanisms that ensure that the use of livestock is consistent with overall social objectives.

Within an enabling policy framework, a wide range of available technologies can be employed while others still need to be developed. Their purpose is not simply to reduce the environmental damage by reducing the polluting load, but also to enhance and save natural resources, through the use of livestock, and to turn waste into useful products.

Principles and objectives

The previous section analyzed the major environmental contributions and losses attributable to livestock, and the fundamental pressures that drive various systems into dis-equilibrium with the environment. The symptoms are manifold and so are the causes. However, a common thread links them: those who reap the benefits from over-exploitation or from degradation do not pay the full costs, and those who preserve natural resources or who pay the costs of conservation gain few of the benefits. Economists refer to such a phenomenon as a market failure. Thus, the principle to redress this imbalance is to devise instruments which ensure that these environmental effects or externalities are "internalized", i.e. that the conserver gets a fair share of the benefits and that the degrader and exploiter pay the full costs.

Problems associated with implementing this principle are not easily overcome. It begins with the need to quantify environmental damage because, as we have seen, interactions are complex and actors not easily identified. It continues with the need to translate these effects into monetary terms. Policies must then be designed to redress the externalities. This results in a redistribution of income. Whatever the levels of adjustment countries adopt, none will be cost-free. Such measures meet opposition of vested interests, and powerful lobbies will seek to avoid full accountability.

In addition, countries are constrained by economic capacity to respond to environmental externalities. The major determinant of this capacity is income (Runge, 1995). Compared to higher income countries, lower income countries cannot be expected to respond with the same intensity to environmental externalities through regulation, taxation or subsidization, a difference which carries potential for trade conflicts. In higher income countries, high concentration of animals can be reduced if governments are prepared to subsidize extensification, or to tax or regulate nitrate use, water or the scale of operations. By contrast, in lower income settings, such interventions are often beyond the government's capacity to implement. Obviously, willingness and ability to pay for environmental goods depend primarily on income. In lower income countries, food production tends to take precedence over environmental concerns. Preoccupied with day-to-day survival, the poor have limited scope to make long term investments in natural resources. Very often, they also rely on fragile, open access resources such as extensive rangelands.

It is now more widely accepted that capital has more than one dimension and that, in the face of rising and changing pressures of demand for food and agricultural products, it is impossible to maintain the natural resource base unchanged. Furthermore there are trade-offs between the different forms of natural and man-made, or owned, capital. In addition to the natural resource capital of land, water and biological diversity, there are forms of human capital resources (indigenous knowledge, education and better health), and man-made capital resources such as infrastructure. There is also a social capital which may reflect the status of the poor as decision makers and architects of their own futures, or as curators of natural resources. For the total wealth of a nation, policies need to be designed that correct for market failures indicated by environmental damage or benefits. Such policies change the availability of production factors by making them more or less expensive. Consequently, and following the concept of the induced innovation (Hayami and Ruttan, 1985), different technologies are employed or developed that optimize the use of the new set of scarcities. Before designing policies, the intrinsic scarcity of key inputs such as land, labour, capital, water, feed or energy needs to analyzed. It must then be determined how environmental externalities and government policies may cause certain inputs to be undervalued as, for example, water and feed in many Middle Eastern countries and energy in industrializing countries such as Brazil and India. Such distortions have given rise to a different set of technologies, often environmentally degrading, than those which would have been adopted had inputs been available at the market price. The task is to develop a comprehensive perspective on environmental protection and development, and an integrated approach to decision-making.

The challenge is to achieve the social and economic objectives that are often the primary motivation of public sector interventions without directing resources into unsustainable use.

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