Welsh Journals

4. AGRI-ENVIRONMENTAL POLICY AND THE RURAL ECONOMY Garth Hughes INTRODUCTION Agri-environmental policy refers to policy measures designed to promote envi- ronmentally sensitive farming and which receive their funding from the national and European Union (EU) agricultural budgets. They are of compar- atively recent origins but expenditure on them has been growing quickly, albeit from a small base. The purpose of this paper is to examine the growth of these rather inelegantly named policies and their implications for agriculture and the Welsh rural economy, with a particular focus on Environmentally Sensitive Areas (ESAs). AGRI-ENVIRONMENTAL POLICY Environmental conservation is a rapidly expanding area of agricultural policy but the money available for conservation schemes is still small compared with the more traditional forms of expenditure on agricultural policy. Whereas in 1988 annual expenditure on environmental conservation within the UK's agri- cultural budget was virtually nothing, now it is about £ 200 million. In compar- ison, expenditure on sheepmeat policy is around £ 400 million per annum, a somewhat similar amount is being spent on the beef sector, and over £ 800 million on cereals. Overall, total expenditure on agriculture in the UK over the next few years is expected to be about £ 4 billion a year. However, the signifi- cance of environmental conservation is greater than these public expenditure figures suggest because it represents an important part of a fundamental change that is taking place in agricultural policy. Although agri-environmental policy consists of a heterogeneous collection of measures, they do share a common underlying philosophy of persuading