Environmental and ecological goods and services (EEG&S) are the benefits that humans derive, directly or indirectly, from the healthy functioning of environmental and ecological systems.
In the production of food and fibre, farmers manage land and resources to grow products sustainably. To do so, farmers depend on the ecological goods including healthy soil and clean water. The environment allows marketable agricultural products to be grown. At the same time, farmers have an opportunity to manage ecological services like water cycling (purification, retention, flood mitigation), air quality (oxygen production, carbon sequestration, climate regulation), nutrient cycling, pollination services, provision of wildlife habitat and biodiversity, soil erosion control, and aesthetic and recreational spaces and scenic views. Farmers manage these as a public good while practicing sound farm stewardship – but these efforts are rarely captured in the price farmers receive for their products.
These services are generally characterized as having a market failure as they do not command an explicit price for maintenance and delivery. Environmental and ecological goods are commonly thought of providing private benefit through market returns, while services are provided for the benefit of society (i.e. for the public good).
Valuing EEG&S remains difficult. The remedy may be in the various forms of payment for environmental goods and services that are intended to incentivize farmers and other land stewards to adopt Best Management Practices for the public benefits.
The difficulty, however, is determining the appropriate balance between incentives and regulations, which are responsible to both farmers – the benefit producers and tax-payers – the benefit receivers.
OFA believes that agricultural activities make the best use of arable land, and that agriculturally managed landscapes provide EEG&S for public benefit in the process of normal farm practices to produce food, fibre and fuel.
Where economic valuation of EEG&S is possible, OFA believes that farmers should be recognized for their efforts to manage and enhance these services for the public benefit. OFA also believes Ontario’s government needs to create a fair system of incentive-based policies and programs that recognize the significant environmental contributions that result from the adoption of beneficial management practices, and that this is far more effective than the use of regulatory instruments.
OFA recommends one option to recognize the EEG&S farms provide is through a voluntary offset credit system that stack payments for beneficial practices on top of the greenhouse gas reducing activities.
OFA encourages the provincial government to develop policies and programs that recognize the efforts of farmers to manage and enhance these EEG&S for the public benefit.