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Skip to 0 minutes and 12 seconds Hello. I’m Ian Bateman, Professor of Environmental Economics at the University of Exeter Business School. I’m going to introduce some of the key drivers that influence farm land use. These fall into three categories– environmental, economic, and policy drivers. Nature and farming strongly influence each other. The physical aspects of the environment, such as soil types, temperature, and water availability, mean that in some areas certain types of farming are simply infeasible, which is why you won’t find wheat fields at the top of stony mountains. However, more generally the environment operates by influencing the revenues and costs of different agricultural products so that their profitability varies across locations. This is why we commonly see distinct patterns of farming as we move between areas.

Skip to 1 minute and 4 seconds Lowland farms with good soils are dominated by high value arable farming, while those with poorer soils are often under dairy farming. As we move further into the uplands, so we see farmers being constrained to specialize in lower value beef farming, while in the most adverse mountainous areas, only low value sheep farming is possible. One way to view the natural environment then, is as a constraint on farming activities and their profits. Of course, if environmental conditions change, as is increasingly the case due to climate change, then this can either increase or reduce those constraints. Farming also responds when the market price of farm products or the costs of production has changed.

Skip to 1 minute and 51 seconds For example, when China increased its imports of wheat some years ago, this increase in demand was so substantial that it raised world prices. This resulted in a quick response from UK farmers, who put more land into wheat production. Similarly, if the UK leaves the EU, this might alter food imports and exports, changing the price of multiple agricultural products and so altering land use in the country. So economic forces are also important determinants of farm land use. Another key driver of agriculture is government policy. In the early 1970s the UK joined the European common market, the forerunner of the European Union.

Skip to 2 minutes and 40 seconds This brought the UK into the Common Agricultural Policy, the CAP, which has determined farming policy for nearly 50 years now. For most that time the focus of the CAP was on increasing food production, mainly through subsidies and artificially high intervention prices. This resulted in massive overproduction and environmental degradation. Eventually the cost of pricing intervention became too much, and was replaced by direct income supplements and a gradual move towards protection of the environment. The UK’s recent agriculture bill and its 25 year environmental plan aims to quite radically extend this initiative. These new developments move away from subsidies for food production, and towards a public money for public goods policy.

Skip to 3 minutes and 35 seconds This policy aims to target government spending towards those aspects of farming that don’t yield market goods, but rather produce other benefits for society which farmers cannot sell through markets. The government has announced that the primary focus of this policy will be environmental improvement. Farmers will be incentivized to enhance the environment’s natural capital such as its fertile soils, and the ecosystem services that they provide, such as capturing and filtering our drinking water, flood prevention, carbon sequestration, and habitat for biodiversity. However, the assessments of these benefits and the form of any incentive payments is yet to be determined.

Skip to 4 minutes and 26 seconds So that introduces some of the drivers influencing agricultural land. In the article and activity that follows, you’ll find out more.

Key drivers of agricultural land-use

In this video, Prof Ian Bateman talks about the key drivers of farming management practices, their importance for healthy ecosystems and for profitability.

In the next article we will explore some benefits of agricultural farmland, other than food production.

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