Environmental services are highly valued by our society even though most of them fall into the realm of being for the public good. As such people can usually get them without having to pay for them.
Ranchers and farmers in the United States bring a diverse
assortment of commodities for fuels, fibers and foods in response to signals
that are generated by the market. In addition, farms and ranches contain
significant quantities of natural resources that may encompass a number of
environmental services that include cleaner water and air, improved wildlife habitat,
and flood control.
However, since ranchers and farmers do not reap any
financial benefits if they produce these commodities they tend to focus on
other profit-making areas and generally under provide these types of services.
However, although there may not be any immediate financial
gain, farmers may often unintentionally produce such services by maintaining
their wetlands, grasslands, and/or forests instead of converting them to
croplands. They also often unwittingly provide environmental services by
integrating production or conservation practices that increase their bottom
lines while improving environmental performance.
Even though our society puts a high value on these services
most farmers can't financially benefit from them because these services are in
the realm of the public good. Therefore they don't intentionally produce them.
Consequently, there aren't any markets that occur naturally
for environmental services.
However, if environmental services could be sold along the
same lines as other commodities then ranchers and farmers would undoubtedly
invest more of their time and resources to better maintain their woodlots,
wildlife habitats, and wetlands. And they would be less prone to turning this
land into cropland or grazing land.
The USDA (United States Department of Agriculture) has
expressed a lot of interest in markets that could be created to could provide
both environmental services and environmental quality. The USDA looks at these
as supplements to any existing conservation program rather than as replacements
to such programs.
They also believe that they could potentially be an
additional income source for ranchers and farmers.
One of the challenges faced by the USDA is that the vast
majority of farmers (and other business people) are reluctant to adopt any new
practices if the potential returns aren't certain.
By their very nature environmental services are difficult to
observe. For example, how do you determine the nutrient filtering capacities of
wetlands? Or how can you determine the sequestration of greenhouse gases by
adopting conservation tillage? Such uncertainty vis-à-vis the quality and
quantity of services that farmers and ranchers can produce are common problems
that will have to be overcome before economically viable environmental service
systems can be put into place.
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Doing
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