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Rationale

The following information provides additional background to describe the rationale behind some of Florida Stewardship Foundation's goals:

| Driving With the Brakes On |
|
Dade County: At a Crossroads |
|
Using the Market Economy to Greater Advantage |

Driving with the Brakes On

Consider for a moment this fact: the vast majority of Florida's land area is currently owned by a small group of private landowners ... those involved in agricultural and forestry production.

These landowners are the custodians of the largest repository of natural resources left in Florida today. In a sense, they are the major stockholders in Florida's future, since it is from their stock of land that almost all future land uses will be drawn ... for environmental protection ... for agricultural production ... and for urban expansion.

The decisions they make are going to play an essential role in the survival of the Florida panther, the black bear and most other native species. Their decisions also may determine the fate of the Everglades ... and Florida Bay.

But there is a problem.

Even though some landowners go to extraordinary lengths to nurture the resources on their property and conduct their activities in a manner that is sustainable and compatible with these resources, they must make a profit ... or go out of business.

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No mechanism is now in place to help the vast majority of Florida farmers pass on the costs of environmental protection to the public. They produce 253 agricultural commodities, of which only five -- tobacco, peanuts, cotton, milk and sugar -- qualify for federal subsidies or price supports. For the balance, the market sets their price, and that price is constantly changing. The costs of maintaining land that produces little or no economic return, of installing conservation systems, of hiring consultants and attorneys to comply with regulations whittle away at profit margins ... and make the Florida farmer less competitive with foreign producers.

The market currently pays Florida farmers to produce vegetables, citrus, timber and homesites. But it does not pay for the other "products" of the land for which they are the custodians -- open space, wildlife habitat, water resources, wetlands and more.

And therein lies the dilemma: As much as agricultural landowners may want to protect wetlands or wildlife, they have a powerful inducement not to do so.

The market economy offers landowners a strong incentive to manage their holdings for the highest and best economic return. And that can translate into intensive development that may be at odds with natural resource protection.

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Of course, landowners are not forced to seek the highest profit obtainable. That is their choice. But if it is profitable to convert land from native habitat to agriculture and from agriculture to condominiums, chances are land will be converted.

As a result, Florida is literally "driving with the brakes on." Public policies are being enacted and expenditures made that are in conflict with each other -- "stepping on the accelerator" to promote the market economy, and "stepping on the brakes" to constrain its undesirable effects.

Farmers (and other landowners) are often caught in the middle. They may enjoy the natural resources on their property, but the market economy does not reward them for giving up development of their land so wetlands ... or wildlife species ... can survive.

Laurie Ann Macdonald, a St. Petersburg zoologists/ecologist, once said: "Ecological systems will exist in the absence of a human economy. But human economic systems cannot exist without a reasonably healthy environment. "

That may be true. But the question is: what is the best way to motivate a landowner to care for these resources?

When economics and natural resource protection come into conflict -- as in the case of efforts to preserve the Everglades and critical habitat for the Florida panther -- many landowners feel they have only two choices: sell their land to the government so its resources can be protected or live with more regulations that may ultimately drive them out of business.

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Why not take a new approach to natural resource protection? First, think of wetlands, the Florida panther, natural resources and open space as "environmental products. " Then compensate landowners for producing or caring for these products ... on our behalf. Won't that, in turn, reduce the chance that a landowner might want to replace wetlands or critical panther habitat with a more traditional commodity that would earn a profit or sell out so the land can be developed for a higher cash return?

This may require a new way of looking at environmental protection and the market economy. But it is one many landowners can easily understand.

When one landowner in southwest Florida was asked what he would say if he was paid to grow panther habitat, he responded immediately by saying, "Here, kitty, kitty ... "

Finding workable ways to tie good stewardship to good business decisions is important. The intent is to turn wetlands, panthers and other natural resources into an asset for landowners ... to encourage them to grow and maintain these resources just like any other crop that they might produce on their land ... and to provide them with an economic return for doing so.

This is an approach that applauds and compensates landowners who choose to nurture rare and precious commodities -- such as the endangered Florida panther or areas of natural habitat and open space -- that society wishes to preserve.

The approach also makes good economic sense. An economic analysis conducted in 1994 by Hendry County Extension Director Dallas Townsend indicates it is far cheaper to keep land on property tax roles and in economic production while paying landowners for stewardship efforts than it is to buy land, take it off tax roles and maintain it at public cost. It also may be cheaper to pay incentives to a landowner to encourage proper stewardship, than to let a resource degrade and pay to clean it up later.

 

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Dade County at a Crossroads: An Example

Reginald R. Walters, former director of Metro-Dade Planning Department, said in 1992:

"Dade County is in a true zero-sum situation with respect to its land use decisions. We have well defined urban growth boundaries and large areas permanently restricted for wetlands conservation and groundwater recharge purposes. Any additional land designated for urban development must come from our agricultural land base of roughly 80,000 acres, all of which is under virtual full-production."

Since, then Hurricane Andrew and the Frog Pond purchase have reduced this acreage even more. As a result, Dade County agriculture has been squeezed into a corner. On one side is the park boundary for the Everglades. On another side is Biscayne Bay. And creeping ever closer are the suburbs of Miami.

"Dade County," Walters said, "is at a critical juncture in its history, a crossroads which will largely determine the fate of our land use and the future of agriculture."

But, once again, Dade County ... and the state ... is "driving with the brakes on."

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Part of the problem lies with our land appraisal process. Land is valued on the basis of how many houses or condos it will accommodate ... not on how effectively it will grow our food ... or how important it is for water recharge ... or as wildlife habitat.

In fact, there presently is no way within the market economy to assign a dollar value to the land's ability to grow food ... or to the natural resources and wildlife it harbors.

As a result, our society tends to view open, green land as a temporary holding pattern ... awaiting conversion to a higher and better use ... such as condominiums.

This has led to the destruction of many agricultural and natural resources ... a trend that is continuing in Florida ... and throughout the United States. Because of the false economics created by the land appraisal process, these lands are under constant pressure to be converted to other uses.

Some people think the solution is stronger zoning regulations ... and more rules. Unfortunately, zoning can be changed by a simple majority vote. And it often is changed ... usually because someone can make more money selling land for development than farming it or keeping it in its natural state. As a result, zoning has not worked as a means of protecting farmland ... or natural resources.

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Nationwide, we lose almost 1 million acres of productive farmland to urban conversion every year. In Florida, the conversion rate has averaged 150,000 acres per year since 1980. That's 17 acres ... or about 13 football fields ... each and every hour.

To understand this trend, consider Broward County. It once was one of Florida's most important agricultural counties. And it contained a significant portion of the original Everglades. Today it is almost wall-to-wall subdivisions.

Now, Dade County is at a crossroads.

Dade County planners would like to make another attempt to retain "a critical mass" of the county's remaining agricultural land.

Traditional approaches to farmland protection, such as land use planning, regulation, purchase of development rights (or agricultural conservation easements) -- are not likely to work in Dade County. A majority of farmers and farm groups do not feel these concepts or the agencies and organizations promoting them will advance their interests.

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Farm Bureau members have often said: "The best way to preserve farmland is to preserve profits." They are right.

It's time to stop driving with the brakes on ... and consider a new approach.

In fact, it may be possible to argue that the incredible mass of regulations most businesses must deal with are a result of government's failure to make social policy and environmental policy compatible with the market economy.

The best-selling book, The Death of Common Sense by Philip K. Howard (Random House, New York, 1994), is a compelling commentary on the regulatory approach to fixing problems. As Andrew Heiskell, former publisher of Time, Inc. says:

"Not often does a book appear that is startling and yet so obviously correct: it is as if we have been using the wrong language to address public problems.

If our social and environmental policies can be modified ... even a few at a time ... so these policies are propelled by the market economy, not pitted against it ... far fewer regulations will be needed. And agriculture, the environment, business and Dade County's quality of life all could benefit.

The question is: which direction will Dade County choose for the future?

And which direction will the people of Florida choose?

 

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Using the Market Economy to Greater Advantage

Florida should seriously look at economic incentives that can be offered to landowners ... to assist in meeting environmental goals ... encourage sensible, cost-effective land use decisions ... and generate revenue streams that will improve profit, strengthen the state economy and contribute to a robust agricultural industry.

Economic incentives have been used successfully in the U.S., Europe and New Zealand since the mid- 1970s to restore overfished fisheries, reduce the production of "greenhouse" gases, improve air quality and promote water conservation.

In each case, the market economy has been used as an ally to reach the desired goal. Individual companies and landowners have profited, society has benefited and taxpayers have saved hundreds of millions of dollars over the costs of more traditional regulatory approaches. Moreover, conflicts between environmental protection and economic development have been reduced ... and in some cases, economic development even has been used as the vehicle by which greater environmental protection was achieved.

Examples of these incentives include:

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Emission reduction credits, that not only allow new firms to move into polluted cities, but use the new firms -- and the promise of economic growth -- as one of the main vehicles for improving air quality.

Emission credit trading, that allows firms that can control emissions cheaply to sell these credits and firms that face very expensive options to buy the credits in lieu of installing unreasonably expensive equipment.

Water conservation credits. The Metropolitan Water District (MWD) of California, a public agency that supplies water to the Los Angeles area, pioneered a new water conservation plan m 1989 a. r it became apparent the agency's water conservation regulations had been having an unintentional side effect: the regulations discouraged water conservation because they did not allow users who conserved water to recover any of the costs associated with their conservation activities by transferring the conserved waters to others willing to pay for it.

In fact, farmers were penalized for conserving water, since their water allocations were reduced when they installed expensive systems that conserved water.

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In 1989 the MWD took a new approach. It offered to bear the capital and operating costs, as well as the indirect costs (such as reduced hydro power), of a huge program to reduce seepage losses as water is transported to agricultural operations and to install new water-conserving irrigation techniques in farm fields. In return, growers are able to install new irrigation systems at no cost. In addition, they receive all the conserved water ... which they can sell to the MWD to accommodate new urban users.

As a result, water supplies are increased, the district receives the water it needs at a reasonable price, the growers receive the same irrigation benefits they previously had without being forced to bear large additional expenditures, and the additional water that is conserved can be sold to new users by WMD at a profit, which more than pays for its capital outlays

(Examples from "Using Economic incentives to Maintain our Environment" by T. H. Tietenberg, Department of Economics, Colby College, as reprinted in Valuing the Earth: Economics, Ecology, Ethics, Herman E. Daly and Kenneth N. Townsend, editors, The MIT Press, Cambridge, MA, 1993, PP. 315-324)

The same type of incentives could be applied to agriculture in Florida ... to strengthen the industry ... to carry out environmental objectives ... and to assign a value to the land's ability to grow food ... so agriculture is no longer viewed as a temporary holding pattern ... awaiting conversion to a higher and better use ... such as condominiums.

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