Opinion

Public Goods: Public Money for Material Benefits

Public goods is now a Brexit thing. A catch-all phrase for the aspirational future benefits by which we are expected to measure today’s emerging policies. In economics, so says wikipedia, a public good is a good that is both non-excludable and non-rivalrous in that individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others.

It is self-renewing sustainability, consumption without consequence, and at the same time it is a beautiful use of language as political suggestion. Feel-good phraseology that only the brave or the foolhardy could possibly disagree with. But like sustainability before it, public goods is in danger of becoming a justification rather than a goal: public goods are good; my idea is a public good; therefore my idea is good. 

So to the concept of public money for public goods, and specifically the proposal to pay farmers for environmental benefits, as a replacement for current land-based subsidies under the Common Agricultural Policy. If the Government is going to ring-fence funds it’s probably worth asking whether – across the entire food chain – the environment is the thing to spend it on.

The environment, in its broadest sense, has one big compelling reason to receive public money in addition to that already spent on environmental protection (approx. £14.7 billion in 2015; ONS). That reason is that it would never get funded voluntarily. For a lot of people the environment remains a luxury item; something only within reach of people with the spare time and disposable income to consider it. In everyday life there are lots more urgent and compelling things to spend time and money on. So if we are to safeguard clean air, fertile land, biodiversity, access to the great outdoors and all the other benefits of a healthy environment then arbitrary funding through public money, alongside the efforts of the voluntary sector, is a strong argument.

Even so, that would leave the agricultural sector in a rare position of being paid to mitigate its own environmental impact. Take quarrying as an example of an important sector that has an enormous environmental impact. Businesses are required to minimise and mitigate environmental impact throughout the life of a quarry (noise, dust, pollution, visual, etc), and then have to return the site to a similar or better condition to when they began. There is a national network of biodiverse nature reserves, wetlands, and areas of public amenity that used to be quarry sites. All of which have been funded as part of a business model, and not reliant on public money. The quarrying industry even operates a restoration guarantee fund that covers the cost of work should a company get into financial difficulty.

British food production should be able to operate in a similar way, by treating environmental impact as an input cost and making the funding part of a business model; although working with Government would still be beneficial, for example to create the space for development of greener technology. Maximising environmental work and investment in innovative technology depends heavily on return in the marketplace, but this forms part of the discussion we have to have about supporting British standards, and thinking about the food chain as a whole, rather than cherry-picking bits of it. If we as a nation of consumers want safe, wholesome, and nutritious food produced with good animal welfare and strong environmental protection then we need to have a serious conversation about the price of food reflecting the cost of production.

We should also think about the extent of the environment as a public good. Part of the economic definition is that …individuals cannot be effectively excluded from use… and while in the theoretical sense the environment benefits us all, this is essentially a passive use. The number of individuals that actively make use of the environment as a public good is large (UK National Parks had over 120 million visitors in 2014), but they remain inaccessible for a huge swathe of the population who can’t afford – financially or through lack of opportunity – to use them. Unintentionally, a lot of people are excluded from environmental amenity.

Food and the environment are similar, in that we often focus on the top-end and those people fortunate to have the disposable income and leisure time to afford the best that is on offer. Instead we should be looking at the other end of the scale; at food poverty and, for want of a better term, opportunity poverty. If we can create systems, for both food and environmental amenity, that lift people out of poverty then they are systems that will work for everyone. This must be coupled with a set of core standards that safeguards food safety, animal welfare, consumer choice, and delivers a reasonable return that funds environmental work.

Trickle-down policies can work, but only if they do eventually benefit those at the bottom. However, recent years have shown us that food poverty and use of food banks is increasing. More and more people are becoming disconnected from affordable food, so it begs the question whether focusing public money on helping families eat is of more direct – and broader – benefit than potential environmental amenity.

If feeding our people is the aim, then we are in a time of opportunity to look at solutions that are radical rather than reactionary. Public procurement is an area where we need to use more British food, and where better to set an example of a public good than in feeding people in schools, hospitals, and the armed forces. If picking one area of public procurement to focus on then school meals is a good example. How about guaranteeing that every primary school child has a hot meal made with British food? If  public money is ring-fenced, then the public good of school meals would: ensure children have nutritious food; support families in, or in danger of, food poverty; guarantee a marketplace (albeit modest) for British food producers; ensure a cash-flow through the chain that could be used to fund environmental ‘goods’; and reinforce British standards of food production

There are approximately 4.7 million primary school children in England, Early Years to Year 6 inclusive (National Statistics), with an assumed level of attendance at 190 days per year. When the School Food Plan was launched for Key Stage 1 pupils in September 2014 it described the benefits of ensuring children being guaranteed a nutritious meal, and the average cost to families was estimated at £437 per year. This equates to £2.30 per day of school attendance. Taking the 2014 average of £2.30/day, then extending it across all primary and early years pupils would cost £2.1 billion (inclusive of existing Key Stage 1 funding).

Beyond the noted benefits to academic attainment, if it were to be supported by an educational element it would help schools bring food back into the curriculum, and instil in the next generation an understanding not only of feeding themselves but also of where their food comes from and the values we place on it.

This is just one example from across the food supply chain where a bottom-up approach is arguably a better public good than a trickle-down one. Once people are fed, then other opportunities can be explored, whether in education, employment, or even environmental amenity.

When examining public goods it would be very easy to fall back on the utilitarian ethic of the greatest happiness for the greatest number. Supporting the environment satisfies that if you don’t distinguish between direct and indirect benefit. ‘The happiness of the entire population is boosted by a healthy environment that is productive in food and amenity’ is a statement that is broadly true. However, that long-term potential doesn’t help the person who is hungry today.

So instead of the greatest number we should focus on the greatest impact. Given that the public money in question is limited, let’s make a big change for a section of the population instead of spreading it so thin it in reality benefits nobody to any great extent. It doesn’t have to be school meals, it could be other areas of public procurement or social policy. But a public good should make a material and beneficial difference to everyday life.

Across the population, food itself is never going to be a public good. Of the basic human needs only air truly remains unfettered by a commercial element; food, shelter, and to a lesser extent water are all governed by a marketplace of some sort. To suggest that everyone in the country should receive an ‘allowance’ of food is unrealistic, but perhaps we can make that a reality for a section of the population who would most benefit from it.

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