THE CHALLENGE OF AGRI-ENVIRONMENTAL SUBSIDIES - THE CASE OF BREADALBANE ENVIRONMENTALLY SENSITIVE AREA, SCOTLAND

Farmers and landowners are having to respond increasingly to the shift in agricultural support towards grants for 'environmentally beneficia l' farming. One such example of this policy trend in the past decade i s the introduction of Environmentally Sensitive Areas (ESAs), first im plemented in Scotland in 1987. Within this Government-funded scheme, f armers receive financial incentives for managing their land in an envi ronmentally friendly way, and for maintaining or improving the conserv ation features on the farm. Farmers and landowners are thus being enco uraged to address goals and objectives other than those of production. This paper examines the decision-making of farmers and landowners whe n faced with an option such as the introduction of ESAs: the factors i nvolved in ESA uptake; the trade-offs which have to be made; and the t ype of incentive that the ESA represents to landowners and farmers. Th e paper also discusses the views of farmers and landowners towards the ESA in the context of all agricultural policy, and specifically relat ive to the uncertainties relating to the maintenance of subsidies. Thi s provides insights into both current and future farm/estate level res ponses to other agri-environmental and land-use options.