We discussed trade-offs as one of the key principles of economics. People must make trade-offs for almost every decision they make because of scarcity: we don’t have enough money, or time, or resources. Scarcity means that we must choose between one outcome and another. This is true also for sustainability. While we are interested in environmental sustainability, we also need businesses and jobs, most of which use resources and create some amount of pollution: farmers use fertilizer that runs off into rivers, hog barns produce manure that must be dealt with, factories spew emissions, and so on. We must recognize these trade-offs, the opportunity costs associated with such trade-offs, and how to make decisions at the margin. For example, how much pollution are we willing to live with – a little bit more, or a little less?
Government plays a critical role in the agriculture industry and in many ways, it’s because of the desire to be sustainable: to ensure environmental stewardship, and to sustain communities and the agriculture economy. This is an important consideration as we move forward through class. You will learn about what drives producers and consumers to make decisions, and at the same time, you must think about the broader context in which those decisions are made.
Take a look at the fowling examples, (you can follow the links as well) to determine what type of sustainability is being targeted by each policy. Note that in some cases, all three types of sustainability are clearly related.
The Saskatchewan Agriculture Development Fund (ADF)
“The Agriculture Development Fund (ADF) was created to ensure that research relevant to Saskatchewan's agriculture is undertaken to help farmers and ranchers become successful. It provides project funding of nearly $14 million per year on a competitive basis to researchers in public and private research and development.
“The funding is provided to create future growth opportunities and to enhance the competitiveness of the provincial agriculture industry. This investment results in new knowledge, information and choices of technologies for producers and food processors, including feed and nutrition information for ranchers, and new crop cultivars and production information for farmers.”
This fund supports research that promotes the agriculture industry. The funds can be used for research to support economic growth of the industry as well as better practices that focus on environmental sustainability. New technologies and practices that enhance how farmers manage the land create greater profits but promote better land use. Both of these factors together will go a long way to support the people who work in the agriculture industry, thus promoting the sustainability of farming communities.
Rural Physician Incentive Program
“There is a new grant available for recent medical graduates practicing in rural and remote communities throughout Saskatchewan. It is called the Rural Physician Incentive Program (RPIP) and it is administered solely by saskdocs.
“The RPIP is a new program available to recent medical graduates. The grant can amount to $120,000/physician paid out incrementally over a period of five years. A rural or remote community in Saskatchewan means one with a population of 10, 000 or less.”
This program provides additional funding for newly graduated physicians to attract them to rural and remote areas in Saskatchewan. The incentive ($120,000) is designed to entice medical experts to live in communities that need doctors but have difficulty keeping them. Most doctors would rather practice in the city, or even move to different countries (such as the US) because they can make more money. You can see there is a trade-off: economic resources ($) in exchange of community sustainability.
ECONOMIC DEVELOPMENT CONCESSIONS
Economic development concessions are valuable tools used to influence decisions on where a new investment may locate. Concessions, commonly referred to as incentives, are used among municipalities, regions and organizations in their efforts to foster economic growth by increasing assessment or other deliverables such as job creation. Many concessions are designed to encourage development by easing taxation; however some municipalities prefer labour force training and infrastructure development over tax abatements. Therefore, they may have a direct or in-direct monetary value. Concessions also ensure that a piece of land is utilized as per the specific purpose intended by the municipality.”
SEDA stands for “Saskatchewan Economic Development Association, so you can see that they are focused on economic sustainability. You should also notice the use of “incentives,” which was a concept we learned about in Module 1. In the example above, SEDA is promoting the use of such incentives called concessions to promote economic growth in certain areas. This is also related to social sustainability because it’s about creating jobs in communities that likely need more economic activity. If there are no jobs available, people tend to migrate to where there are jobs, meaning the populations fall. In some cases, the population falls to the point where the community is no longer sustainable.
“Agricultural drainage is one of the biggest threats to wetlands in rural Canada. This country has a long history of installing ditches that drain water from wetlands so more land can be farmed. This has helped feed communities, but it is also harming them by removing our natural defense systems: wetlands. Sustainable practices are needed to achieve balance between food production and healthy, functioning ecosystems.”
Many of you will recognize the duck logo to be that of Duck’s Unlimited (DU). While this is not an example of a government policy, it does show the importance of environmental sustainability and how incentives can help to achieve this. Duck’s Unlimited uses a market approach (remember markets are usually a good way to organize economic activity?) to provide incentives for farmers and other landowners to not drain their land. The farmer has to decide to drain and seed a crop, thus giving her some revenue, or to make a deal with Duck’s and not drain. DU creates a trade-off whereby the farmer is no worse off by not draining. In fact, the farmer might be better off because she saves resources and gets paid to preserve the wetland.
The SK Ministry of Highways and Infrastructure used to have a program to support railways in Saskatchewan. Why would that be? In the short article above, you can see that the program is meant to “sustain” the railway infrastructure that is important to communities. The railways used to be much more important to move grain out of small and remote communities. Today many of the rail lines have disappeared and there is much more truck traffic, and small communities are even smaller. Do you think more railways would promote economic, social and environmental sustainability?