Tavola Rotonda , Brussels

Roundtable, Brussels 6 November 2003

I would like to thank everyone, especially Thierry de L’Escaille, who has always pro- moted innovative initiatives such as this roundtable, where we will not talk about the future of agriculture, but about the future of “land business and the countryside”.

I am here as a participant in a spontaneous group, created by several members of the Friends of the Countryside and the ELO who believe that the environmental rights of rural estates are both socially and economically important.

For the last three years, our group has held annual meetings, and we named it the Club of Vienna because it was born last year in Vienna during one of our agro-environmental meetings.

I hope I will be able to present to you, in a succinct manner, some of the Club of Vi- enna’s thoughts and ideas.

Personally, I am a rural landowner, and not a farmer. I came in contact with the ELO five years ago, when Giuseppe Visconti – who was then the President of the Friends of the Countryside – invited me to participate in the ELO Technical Committee, who had just hired a group of legal experts in order to de- fend the rights of rural landowners who felt under attack, especially at the hands of environmentalists.

While searching for documents with which to learn more on the issue, I was lucky to come across a review that had just been published in 1999 by Prof. Secondo Tarditi, an economist at the University of Siena: Costi e Benefici della Politica agicola comunitar- ia. [Costs and Benefits of the Common Agricultural Policy]. This publication helped me track down a number of other relevant works, and I found myself faced with such an absurd situation that I became fascinated by it. I will try to sum it up for you here.

I should start by saying that I know of no other situations where so much wealth could be freed for both landowners and all European citizens than an innovative use of the rural territory.

The current situation is as follows: every year, each four-person European family transfers 1000 Euros to agriculture: 60% of it as taxpayers, through the taxes that fin- ance the CAP’s annual subsidies per hectare, and 40% as consumers, since agricultural goods cannot be purchased at the market price, but at a higher European price. The transfers to agriculture are higher that the costs of water distribution and purifica- tion, the cost of municipal solid waste disposal, and the cost of urban cleaning and maintenance all added together.

1 These are only the direct costs, and indirect costs are even higher. Agricultural activities are the main culprit behind water pollution and the destruction of the landscape and other natural riches that we Europeans are increasingly appreciating and de- manding.

Starting in 1996, I adopted the measures set by Regulation 2078/92 and Regulation 2080/92 on my 400-hectare estate near Milan. I took advantage of the ready availab- ility of water in our area in order to begin converting rice fields to wetlands, began converting cornfields into woodlands by introducing typical Po Plain trees and shrubs, in the same proportions they are found in nature.

I have always considered this new land use as a form of cultivation, and not as a definitive change, and I remain ready to return to agricultural activities if the need should arise. Under some aspects, Regulations 2080/92 and 2078/92, that allow the use of the CAP for activities other than agricultural productions have anticipated the de-coupling policy. The results that have been obtained are therefore a precious historical example for the future, and they should be gathered and analysed.

Going back once again to my property, the aerial photo shows part of the Cassinazza before 1996, and in 2002. I did not invent the term “Agricultural Desert”; it is a technical term used to describe modern extensive monocultures. I think the term “Agro-environmental Farm” was used for the first time y our ELO group, later dubbed the Club of Vienna.

The photo only shows changes in the landscape. In order to see the environmental changes, one would need to visit the Cassinazza. I will nevertheless give you some indicative data: -The number of wintering waterfowl has gone from less than 10 to 10 000; -the annual number of bird species has increased from about 60 to 174, including a wintering Greater Spotted Eagle; -the number of breeding raptor species has gone from zero to 7, including three pairs of Hobby; -all nine species of European herons can be present at the same time during certain months; -after two years, Cattle Egrets have once again learned to alight on horses. Due to the lack of grazing livestock in our region, devoted primarily to arable land, the egrets had lost this habit. -in the six years since the re-naturalisation process starter, the number of butterfly species has increased from 4 to 21. In particular, the Cassinazza hosts a healthy

2 population of several hundred Large Coppers (Lycaena dispar), an endangered species.

When I bought the first part of the property in 1992, there wasn’t a single tree here. Indeed, the mediator who sold me the land touted its lack of passivity, meaning “no woodlands or hedgerows, only cultivated lands”.

We planted 190 000 native trees and shrubs. After 7 years, they have formed several woodlots and hedgerows that greatly improve the landscape despite the fact that they are still quite young.

Every year we measure the soil’s Average Exchange Coefficient, which is a fertility index. In six years this index went from 7, the average value of excessively exploited agricultural soils that are practically unproductive unless they are heavily fertilised with nitrates, potassium and phosphorus, to 10. We hope to reach an index of 15, the value associated with virgin soils, within the next 10 years. With such high fertility the Cassinazza could feed 15,000 people for two or three years without fertilising the soil, having thus accumulated a strategic reserve of fertility.

In terms of leisure time, ten years ago it would have never occurred to me to spend my Sundays at the Cassinazza, but now I am reluctant to go away on vacation

What has been said above would be a mere curiosity and would have no economic interest if it were not for the fact that the Cassinazza is adjacent to a vast area south of Milan that has been subjected to strict environmental protection measures thanks to the creation of the South Milan Agricultural Park.

While the photos and the data I presented here show that my private property saw a tremendous increase in biological diversity and in environmental and agricultural wealth, the adjacent agricultural park, despite twelve years of massive spending due to public bureaucracy and in direct costs arising from absurd restrictions, remains an agricultural desert.

We members of the Club of Vienna are certain that the most efficient tool to protect the environment is the institution of rural landownership, if properly encouraged in this direction. Fortunately we are not alone. In 1991, two economists from the Public Policy Insti- tute in San Francisco published, Free Market Environmentalism, a distillate of over one hundred publications that highlights the central role played by the market and by private property in environmental protection. I should thank Carlos Otero, who showed me the Spanish edition last year, suggestively titled ‘Ecologia del Mercado’.

I would like to sum up some of its main concepts, which are as simple as they are little known among most landowners and citizens:

3 - Market mechanisms, even though they are sometimes wasteful, are much more efficient than centralised planning, because they delegate decision-mak- ing to people who are much better informed than central bureaucrats. This concept also applies to environmental protection; - Private property is a fundamental market mechanism that is also essential for the protection of the environment. One can clearly show that environmental problems usually arise due to the lack of efficient property rights and market mechanisms. This is the case for the marine environment: since 1992, fishing stocks have been seriously declining, despite the most sophisticated fishing techniques, due to the lack of property rights over the sea; - Among the innumerable examples that prove what has been argued above, I will only cite the recent case of Elephants in Kenya, where they are state property. In 1998 their population had fallen to 60,000 and President Arap Moi convinced the United Nations to ban the ivory trade, which was blamed for the population decline. Now, only five years later, the Elephant population in Kenya has dropped by two-thirds, to 20,000. In Zimbabwe, where Elephants are private property, their population doubled from 15,000 in 1998 to 30,000 today, because the Elephants’ owners protect them strenuously, since they are a source of wealth. - There can now be no doubt as to the fact that market-based incentives can achieve important environmental goals where restrictions have miserably failed. - The production of environmental goods is a new goal due to changing demands. Nevertheless, market-based instruments have continued to consolid- ate themselves. If the demand for wetlands as a source of improved water quality and leisure activities is really ten times greater than their current extent, then rural landowners must not necessarily be environmentally aware in order to create such areas: they will do so if community policy makes it possible for this activity to be more profitable than the production of cereals. On the other hand, no European landowners would be cultivating cereals if it weren’t for the CAP that allows them to sell cereals at a higher-than-market price.

Within this year, the Club of Vienna will publish these obvious, yet new concepts, in a small manual that can be read in one evening.

In the past, instead of stressing how property rights are the most efficient way to protect the environment, rural landowners unfortunately have always reacted in a negative way to the environmental demands of a population that is growing increasingly wealthy and educated, and that places a high premium on outdoor activities. Because of this, they are often perceived as being responsible for environmental degradation, instead of being seen as precious suppliers of environmental goods and an improved quality of life. The result has been a gradual loss of property rights, since they are seen as an obstacle rather than an instrument

4 . The most recent case concerns the CAP. Since it is seen as a subsidy for agricultural production, it has been given to farmers, while if it had been perceived as a way to encourage higher environmental quality standards it would have re- mained linked to rural landownership.

Fortunately, over the last five years the ELO, at least at the central level, has clearly understood the nature of this problem, and the fact that our Club of Vienna is alive and active is a valid demonstration of this.

Therefore, I feel that Rural Landownership can be a key tool to support environmental protection, thus justifying, as it has in the past, its millenary existence.

Ing. Giuseppe NATTA