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NSW Parliamentary Library Research Service

Finally, the Commission noted that if landholders and local communities are expected to address, and largely pay for, some environmental problems (such as salinity) themselves, there is a strong case for allowing them greater flexibility and authority to devise and implement efficient ways of doing so – not simply imposing solutions from above. Policy mechanisms that regional bodies could employ to achieve regional objectives include: commercial or market-based instruments; voluntary efforts; codes of practice; education; or even regulations stipulating certain practices. Redistributive mechanisms may be appropriate in some instances to share costs among landholders. As an example, in some areas currently only those landholders with remnant native vegetation on their properties bear the costs of clearing regulations, which, among other things, are aimed at controlling salinity, caused largely by past clearing on other properties. 20

6.2

The ABARE Report on Native Vegetation

In March 2006 ABARE (Australian Bureau of Agricultural and Resource Economics)

released a report on the impacts on productivity and returns on native vegetation.

21

ABARE noted that farmers will conserve native vegetation on their property if it generates private benefits, for example, in the form of shelter for livestock and windbreaks. However, the broader benefits that the conservation of native vegetation can generate are public in nature in that they are not exclusive. Those individuals that generate the benefits from increased native vegetation do not retain them in full, for their own use or to on–sell them to other potential beneficiaries. As a consequence, they are likely to under invest in the delivery of the benefits generated by native vegetation. Government involvement in the management of native vegetation may be justified if these non-exclusive benefits can be delivered cost effectively.

ABARE investigated how vegetation is related to farm productivity by conducting 386 face-to-face interviews of broadacre farmers situated in central and western New South Wales. The survey region covered the western half of the Central Division and extended into the Western Division — an area of approximately 400 000 square kilometres at the interface of the wheat–sheep and the pastoral zones. The region is characterised by cattle, wool, prime lamb and extensive dryland cropping operations on farms with diverse levels of vegetation.

The ABARE report noted that the level of vegetation on a property is a key determinant of productivity of broadacre agricultural enterprises – both grazing and cropping. The ABARE survey results showed that farms with lower vegetation density had significantly higher total factor productivity. Throughout the rangelands area of the survey, on average 28 percent of farmers reported that they wished to develop their rangeland areas for higher livestock carrying capacity or for cropping if all potential restrictions could be relaxed. In cropping areas, isolated paddock trees can limit the efficiency of cropping management

20

Productivity Commission, Impacts of Native Vegetation and Biodiversity Regulation. Productivity Commission Inquiry Report No 29, 8 April 2004, at xliv.

21

ABARE, Native Vegetation management on broadacre farms in New South Wales: impacts on productivity and returns. Abare eReport 06.3, March 2006.

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