The Challenge of Reconciling Water and Agricultural Policies —The Role of Public Hearings - Water and Agriculture: Sustainability, Markets and Policies - page 386

Figure 2. Classification of farm support measures available in Québec
according to their environmental impact

Harmful Somewhat More or less Beneficial

harmful neutral

Payments
based
on output
( FISI )

Agri-environmental
payments
( Prime-Vert )

Payments based on
cropped area with
“lock-in” effect
( crop insurance )

Market price support
with output restrictions
( supply management )
Payments based on cropped
area without “lock-in” effect
( property tax refund )
Payments based on historical
entitlements or overall farming
revenue
( CAIS programme/NISA/FISA )

Source: Boutin, 2005.

As Figure 2 illustrates, the FISI programme is the Québec support measure
considered most harmful for the environment. It encourages overproduction by linking
support payments to production levels and also provokes a lock-in effect that leads to
specialisation and inadequate crop rotation. In the past, Québec's auditor general (1996)
has also criticised the fact that the FISI programme is entirely based on models that
maximise production and does not include any environmental criteria.
The pervasiveness of this type of support programme makes it harder and more
expensive to achieve environmental objectives and is in contradiction with agri-
environmental measures. Conversely, environmental pressures would be eased if support
were accompanied by restrictions on production or, as recommended by the BAPE
Commission, were decoupled from production (Portugal, 2002).
From a social viewpoint, an examination of the distribution of the financial aid
provided to hog feedlots through the FISI programme also illustrates the inequities
inherent to the distribution of this form of farm support. Indeed, the FISI programmes,
which provide support based on output, tend to benefit larger operations and to introduce
inequities into the distribution of farm assistance (Boutin, 2005). According to other
OECD (2002) studies on farm household income, generic support measures, like
payments based on output levels, lead to inequalities in the distribution of farm support.
In this area, too, the decoupling of aid measures and the targeting of payments
specifically on the basis of farm revenue is viewed as one way to alleviate the problem
and to guarantee greater equity between agricultural beneficiaries. Again, these
conclusions fit with the recommendations of the BAPE Commission regarding the FISI
programme.
These observations raise several points worth considering if we are to introduce a
sustainable development approach to agricultural policy. Indeed, although the Canadian
Agricultural Income Stabilization (CAIS) programme — a whole-farm income support —
became the front-line programme in Québec in 2003, the FISI programme is still the
predominant means of providing direct financial support to Québec farmers. However,
the transition to sustainability cannot be readily achieved without undertaking a genuine
review of existing farm support measures developed under previous “productivist”