THE AGRICULTURAL PRODUCTION OF ENVIRONMENT - SOME NORDIC ISSUES

The environmental impact of agricultural production is generally recog nised to be negative as a function of a wide range of externalities in cluding land and soil degradation, water loss and quality deterioratio n, deforestation and biodiversity loss. Thus, the impact of trade libe ralisation in the context of subsidised and uncompetitive Nordic agric ulture should mean environmental improvement. However, further reducti on of the agricultural sector can generate a range of additional exter nal costs. Ironically, where agriculture was once subsidised for one c lass of public goods relating to income enhancement - it might now be supported for environmental public goods. The new class of benefits re late to open space and scenic values, heritage and recreation values, biodiversity conservation and ecological food production. In this sett ing the key distinction is of agriculture producing environmental amen ity rather than food or fibre.