FLOOD-STRUCK farmers in southeast Australia are struggling to provide feed for livestock.

DESIGNING AGRICULTURAL subsidy programmes to deliver environmental benefits is easier said than done, with new research showing targets are often not met and the money becomes just another payment to farmers.

University of Tennessee researcher Paul Armsworth says while farmers in the US and EU receive billions of dollars in government subsidies each year to make changes in their operations that will improve the environment, these programmes may offer very poor value for money.

Armsworth, who led an international team of researchers examining the performance of farm subsidies, says the programmes see farmers paid to change their management practices to improve conditions for wildlife. This involves anything from reducing the number of livestock they keep to reducing the amount of fertiliser they use.

Payments are supposed to compensate farmers for costs they incur for making the changes, but the researchers found common shortcuts in the design of farm subsidies undermined their environmental performance.

"Subsidy schemes of this sort are used all over the world," Armsworth says. "However, policymakers often make shortcuts when designing these schemes to make them easier to administer.

"For example, they might pay participating farmers all the same amount or allow anyone to sign up regardless of how suitable their farm is for providing wildlife benefits."

The researchers conducted economic surveys on more than 40 farms in northern England, focussing on how bird species respond to farm management actions.

The survey results were analysed using mathematical models that allowed researchers to explore different ways of designing farm subsidy programmes.

The results showed between 49% and 100% of the promised increase in bird numbers are often not met. Instead, most scheme designs greatly over-compensated farmers for costs they incur and served primarily to increase farm profits.

By comparing alternatives, the researchers were able to identify which simplified policies were most problematic.

"Allowing payment rates to vary depending on where a farm is located is critical," Armsworth says. "Get that right and prospects for conserving wildlife on farms greatly improve."

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FONTERRA IS set to triple capacity at its new Darfield, central Canterbury, processing site within a year of it opening.