Nitrate pollution due to agriculture, project report No.3: should the polluter pay?

The Polluter Pays Principle is a well-established guiding force behind the regulation of polluters in the OECD. Agriculture, however, has frequently been exempt from this principle. This paper considers the reasons for this exemption, with particular reference to the control of nitrate pollution. After outlining the problems in applying many standard pollution control policies to nitrates, we move on to analyse the Nitrate Sensitive Areas scheme in the UK, which is a voluntary subsidy scheme. Reasons for differential take-up rates, and evidence on the effectiveness of the scheme are investigated. Finally, we consider the applicability of this approach to other forms of agricultural pollution.