Australian farmers could soon be selling their environmental management services to the public, such as fencing riparian zones, according to Farm Online.
I am not sure how fencing a riparian zone could be seen as selling an environmental service to the public? Do they mean the public will pay to have the riparian area fenced?
Apparently Agriculture Minister Peter McGauran is finalizing a new system for “stewardship payments” to farmers.
The federal government’s Agriculture and Food Policy Reference Group recently released a report titled Creating Our Future:Agriculture and Food Policy for the Next Generation that recommended government support a new market based program for the delivery of environmental services including a system that:
1. Operates nationally, but be administered at a regional or sub-regional level to target areas of higher conservation value
2. Allow a range of purchasers to participate (such as philanthropic conservation groups or private companies), although governments will be the main purchasers through, for example, a successor program to the NHT and NAP
3. Be equitable and allow landholders to bid competitively for funding on a basis that reflects the marginal value of maintaining land in its current use and the direct cost of conservation measures (such as fencing and maintenance of the area being conserved)
4. Have clear objectives and targets, with funding decisions based on an assessment of the environmental benefit relative to the price tendered
5. Be efficient to run with low transaction costs.
According to a CSIRO “news flash” on 8th August last year, auction-based systems are the most cost effective mechanism for distributing funds to private landholders to improve water quality and biodiversity on private land. This recommendation was based on a trial conducted by CSIRO and the Onkaparinga Catchment Water.
The more tradition method is by ‘devolved grant’ schemes.
Pressure for a new mechanism follows recognition that the state-based vegetation management laws are costing farmers a lot of money.
The financial cost was the focus of a paper delivered at this year’s ABARE Outlook conference in Canberra. The study by Lisa Elliston reported that native vegetation legislation in central and western New South Wales alone would cost the economy A$1.1 billion in today’s terms over a 15 year period.
And just yesterday, according to ABC Online, the Queensland government released its new draft guidelines for the assessment of tree clearing applications for thinning and weed control.
Jennifer Marohasy BSc PhD is a critical thinker with expertise in the scientific method.
Jennifer, I know that money somehow trickles down and our local council is offering rebates on tree planting eg for fencing off and irrigating plantings they will pay for materials, I will have to dig it up as you get so much stuff through the mail.
If you (the reader) are in favour of this idea, how do you propose it should operate, ie what kind of mechanism and how to make it more effective?
How to avoid it becoming like the EU situation of apparently paying farmers to grow weeds?
Interesting view of proposed relations. Governments currently do not see themselves as purchasers of environmental services from land management agencies such as NP&WS’s. In fact they specifically refuse to acknowledge such service providers as business entities. Such is the requirement to dispense with national competition policy in environmental service provision.
Nevertheless, if it is the requirement of any government to compulsorily designate private lands or any part of them for public purposes (whether they be aesthetic, recreational, tourism, ecological or political) the cost should be met by the public and include loss of income-earning capacity from expropriated land-uses.
Perhaps a useful yardstick would be the total land area of protected area reserve divided by the total budgetary allocation including all capital, indicative and recurrent costs/per year. Designated visitor sites, of course, would have a specifically higher cost than portions set aside for wilderness.
In respect to efficiency, the private-sector should be permitted to bid for environmental functions on public reserves with strict adherence to competitive neutrality.
I very much doubt that this funding will come anywhere near the full cost of the “service”. I have examined the economics of fencing riparian zones on a number of consultancies of late and have concluded that the costs are a lot higher than many would think.
For a start, on most properties the most shade is found down near the creek and cattle get both water and mid-day respite from the heat in the same place, from the one journey. It also provides the best shelter from high winds. So the fencing of the riparian zone will require the positioning of new watering points and the provision of new shade points.
And if the area of new shade is not roughly equal to the lost shade in the riparian zone then the cattle will concentrate under the few remaining shade trees and concentrate nutrient deposition in levels that could kill the tree.
The provision of new shade trees will come at the expense of pasture. And this will reduce the total carrying capacity of the farm. In most cases by between 5 and 10%. And as there are few farms operating at better than 10% net profit, most are near 5%, this reduction in total carrying capacity will wipe out that profit altogether.
These sort of programs also assume that the impact of stock on riparian zones is all bad. This is not the case. I recently observed a riparian zone that had been described by a novice ecologist as degraded by grazing impacts. But he had not seen the historical photos that proved that the riparian vegetation was expanding from a complete veg removal as required under the original grant of title.
It was expanding DESPITE any adverse impacts from grazing and, consequently, could not, truthfully be described as a degrading resource.
And he did not notice that the zone had numerous young Red Cedars (Toona australis) that are highly dependent on disturbed soil for seedling strike. These Cedars were found in all the places where stock were able to leave the well trodden pathways and create the isolated hoof marks, on steep inclines, in which moisture could accumulate and the seeds could germinate and survive. The regular pathways were too compacted and too frequently used for seedlings to survive while the inaccessible places had no disturbed soil and no seedlings.
My advice to the public must be the same as for the clients to whom my professional duty of care applies. And that is to look at the whole picture but to first ask, “from what you already know about these people offering you money, are they trustworthy enough to enter into a long term partnership with?”
At that point they completely forget about the costings and junk the application material.
By the way, the fire that almost took out our billion dollar Parliament House in 2003 had raced along a riparian corridor. The parts where stock had been excluded suffered the most damage while the variegated parts where stock had access exhibited less damage and were able to recover faster.
In 2001 the House of Representatives Standing Committee on Environment and Heritage published an interim report of an Inquiry into the Effects on Landowners and Farmers of Public Good Conservation Measures imposed by Australian Goverments. It was titled Public Good Conservation: Our Challenge for the 21st Century. Those of us who made submissions were sent a copy of the interim report.
Evidence was given to the Committee on the legal and policy basis of Australian conservation laws.
All rights in land originate from the Crown, and perceived rights can be withdrawn by the Crown. The Australian system (taking native vegetation as the example), is to withdraw the legal right to a practice, (clearing), and at the same time, create a statutory obligation upon the landholder to maintain that vegetation.
Governments have no obligation to help people meet their statutory obligations. So no compensation. So we have a system in Australia of public free riding on the conservation benefits landholders are required to deliver.
This statutory obligation is often badged as a ‘duty of care’. Duty of Care belongs under Common Law where Duty of Care may be due to other people or their property, but not to ‘the Environment’ as such. But it is a very handy term for sanctimonious political spin.
Legislation alone cannot deliver all of the community’s environmental shopping list. For this, landholders need to be encouraged exceed their statutory obligations. Going by other payments or tied grants operating in the various States, the pattern seems to be that if a landowner might gain any economic advantage from the proposed project, he should be expected to pay for it himself. Where the benefits are entirely environmental, the landholder is expected to contribute about half the cost of the proposed project.
I do not see that payments to Australian farmers for environmental services will ever amount to anything more than a patronising dribble.
Under the EU, farmers provide a number of environmental public benefits (biodiversity, clean water, soild conservatin, etc) for which it is reasonable that they be paid. Under the Australian system, farmers have a number of legislated conservation duties for which they are required to pay.
Rest assured, Thinksy, Australia is not likely to come anywhere near the EU’s environmental payments. The policies and mechanisms underlying Australian conservtion laws are totally different.
Oh, yes, I forgot. Landowners in Australia have statutory obligations to control weeds on their land. And sometimes on adjacent roadsides (public land).
Good points, Helen. Also remember that of all the weeds and pests that cause more than $4 billion a year in lost agricultural production, 70% of them were introduced to our farms and our local ecosystems from urban gardens. Most of the remainder, like the Cane Toad, were introduced by government experts.
And the urban punters are still comlaining about drought relief.
I was recently was part of a market based tender system for funds to protect native grasses on my agricultural land. A botanist gave my site a habitat hectare score and drew up a management plan that essentially required stock exclusion from the site (about 33 hectares), rabbit baiting program and weed management. I then submitted a bid along with other land owners. The bid reflected the money I needed to receive to complete the 4 year management program. No guidance was whatsoever as to what kind of bid would be successful so I costed out the works by a contractor and then added some as a factor of safety and my bid was accepted. I adjist the property and have not lost any rent payments otherwise my bid would also have included lost income. This is the only market based grant system that I know of that uses public funds to compensate farmers. I would be very interested to hear Ian Mott’s and Jennifer’s view on the effectiveness of this system for the mangement of our remnant grasslands.
Interesting case, Stephen. I need to ask more questions before answering. How big is the property and what proportion is the 33 ha? How many stock would the 33 ha have carried? How much income will be lost long term if the agistment is on a per head basis? Who is responsible for maintenance of fences, condition of fenced area etc, and what sort of country is outside the fence.
The main issue with all management plans is that once you sign off then you have modified your existing use “by agreement” and presumably, “with just compensation”. And that, under the Federal Constitution, is the only way the commonwealth can acquire an interest in land, including a right, power or privilege over land. And that puts the assignment of the land into a category of legality that is much stronger than a similar taking under a state law. Most of the state laws regarding this sort of stuff are pure bluff, made on the calculation that most people do not have a lazy $600,000 for a High Court musical comedy.
And the bid system is favoured by the government because it implies that you have given “fully informed consent”, ie that you made your bid with full knowledge of all the likely consequences. It basically enables them to avoid any subsequent consumer protection issues if or when the assignment of the land becomes problematic.
And the bid system also plays on the old saying that, “in every gathering there are more fools than wise men”. You seem to have done fairly well in this instance so you are clearly in the minority. But if there were a number of other bidders who had a poor understanding of their real costs and put in low bids, then those who missed out this time may respond with a less than full cost bid next time. And the amount of a successful bid may end up less than the value of the improvements and land combined.
If the exercise is roughly revenue neutral or pays its way then you have essentially just substituted cattle for taxpayers in one of your paddocks. And in that sense it would be wise to keep the option open to end the deal if the new bloodline doesn’t live up to it’s promise.
In effect, the government is acquiring exclusive use of a piece of your land so the annual rental must reflect the value of that land and some consideration for having a new, untested, neighbour in perpetuity.