Academic/General Training Module by Adam Smith First Published in 2015

 
Section C  
All these activities may have damaging environmental impacts. For example, land clearing 
for agriculture is the largest single cause of deforestation; chemical fertilisers and 
pesticides may contaminate water supplies; more intensive farming and the 
abandonment of fallow periods tend to exacerbate soil erosion; and the spread of 
monoculture and use of high-yielding varieties of crops have been accompanied by the 
disappearance of old varieties of food plants which might have provided some insurance 
against pests or diseases in future. Soil erosion threatens the productivity of land in both 
rich and poor countries. The United States, where the most careful measurements have 
been done, discovered in 1982 that about one-fifth of its farmland was losing topsoil at a 
rate likely to diminish the soil's productivity. The country subsequently embarked upon a 
program to convert 11 per cent of its cropped land to meadow or forest. Topsoil in India 
and China is vanishing much faster than in America.
 
Section D  
Government policies have frequently compounded the environmental damage that 
farming can cause. In the rich countries, subsidies for growing crops and price supports for 
farm output drive up the price of land. The annual value of these subsidies is immense: 
about $250 billion, or more than all World Bank lending in the 1980s. To increase the 
output of crops per acre, a farmer's easiest option is to use more of the most readily 
available inputs: fertilisers and pesticides. Fertiliser use doubled in Denmark in the period 
1960-1985 and increased in The Netherlands by 150 per cent. The quantity of pesticides 
applied has risen too: by 69 per cent in 1975-1984 in Denmark, for example, with a rise of 
115 per cent in the frequency of application in the three years from 1981.
In the late 1980s and early 1990s some efforts were made to reduce farm subsidies. The 
most dramatic example was that of New Zealand, which scrapped most farm support in 
1984. A study of the environmental effects, conducted in 1993, found that the end of 
fertiliser subsidies had been followed by a fall in fertiliser use (a fall compounded by the 
decline in world commodity prices, which cut farm incomes). The removal of subsidies 
also stopped land-clearing and over-stocking, which in the past had been the principal 
causes of erosion. Farms began to diversify. The one kind of subsidy whose removal 
appeared to have been bad for the environment was the subsidy to manage soil erosion.
In less enlightened countries, and in the European Union, the trend has been to reduce 
rather than eliminate subsidies, and to introduce new payments to encourage farmers to 

---