The Agricultural Change and Environment Observatory Programme

The Government established the Observatory following the last major reform of the Common Agricultural Policy (CAP) in 2003 as a vehicle for identifying, at an early stage, the environmental impacts and risks that will emerge from a changing agriculture sector. By decoupling subsidies from production (thereby removing an incentive to intensify production) and requiring cross compliance with environmental standards, the 2003 CAP reforms sought to reduce the adverse and increase the beneficial environmental impact of agriculture. Nevertheless, it was recognised that the environmental impacts of these reforms would not all be easy to predict and might be negative in some cases. The Observatory was therefore established to provide enhanced monitoring and so pick up early indications of change.

The Observatory was formally launched in July 2005, initially as a 3 year programme, and is supported by Defra, Natural England and the Environment Agency. Since agriculture is a devolved issue, it focuses on England.

Further information on the programme can be found here.

Agricultural and Environmental Monitoring Framework

A key role of the Observatory is to monitor agricultural and environmental change. To aid in this process, a monitoring framework has been developed covering the key mechanisms by which drivers of change affect agriculture, the processes through which these changes occur and the resulting environmental impacts. A major element of this has been the selection of appropriate indicators (see below). Wherever possible, regional data are presented. Further information on the selection of indicators and a baseline assessment can be found in the Environmental Baseline Monitoring Project undertaken by CSL/CCRU in 2006.

Indicators and Monitoring Environmental Change

The aim of the Observatory is to monitor and interpret the effects of agricultural change as a result of the 2003 CAP reforms and other key drivers. Monitoring environmental impacts alone, however, is unlikely to provide adequate information. Therefore, a range of indicators has been developed at all levels of the framework to cover the key elements at each stage and to allow interpretation and understanding of changes in indicators at the next stage.

The Observatory indicators were developed following a review of existing data sources and monitoring schemes including existing indicators used to monitor the Sustainable Development strategy, England Biodiversity Strategy, Public Service Agreement targets and the Environment Agency. A significant number of existing indicators were found to be relevant - in particular those developed to monitor the progress of the Sustainable Farming and Food Strategy (SFFS). The selected indicators were scored according to the following criteria:

• policy relevance
• responsiveness
• analytical soundness
• spatial resolution
• time series
• data accountability

The indicators were also classified as having low, medium or high potential for use in an environmental monitoring assessment for the Observatory Programme. It is recognised that existing indicators do not cover all areas of potential interest and that it may be necessary to develop new indicators in some areas.

The CAP regime operates along with other policy drivers to influence farm decision making through several mechanisms such as support and agri-environment payments, conditions placed on support payments (cross-compliance), effects on prices received for agricultural produce, cost of inputs etc. These mechanisms influence decision making processes at farm level in terms of business structure and finance, and day-to-day management, which in turn determine the overall environmental impacts of the farming system.

Reflecting this framework, the indicators are divided into 4 groups:

1. Mechanisms

This section includes indicators of mechanisms through which CAP reform provisions, and other drivers such as market conditions, determine the economic environment in which farm businesses operate. The main source of income on most farms are payments for output, subsidies, and agri-environment scheme payments if the farm has an agreement under such a scheme. Outgoings include fixed and variable costs, but in the short term, changes in variable (input) costs have an impact on farm profitability.

2. Process: Farm Business

Changes in income and costs will affect the viability of the farm business, and hence decisions about changing farm structures and management practices. The indicators included here will allow the monitoring of changes in the structure of the agricultural industry as it responds to policy and market signals.

3. Process: Farm Management

Indicators included here reflect the everyday decisions involved in managing crops and livestock, which may also have implications for the environment. These might be changes in type of crops grown, the level of inputs, or stocking rate and grazing pattern for livestock.

4. Environmental Impacts

Indicator Sheets and Fact Sheets

There is a data sheet for each indicator which provides a summary of basic information and data. A chart shows the latest figures available, a back series of historic data and describes year on year change for the latest figures.

A fact sheet for each indicator provides additional supporting information with meta data on the background and relevance to the monitoring framework, plus statistical and technical details on methodology and data sources.

The chart data are available in Excel. The data and fact sheets are also available in a printer friendly PDF version.