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NSW Parliamentary Library Research Service

On 16 February 2006, the Reference Group released its report — Creating our Future: Agriculture and Food Policy for the Next Generation. The Group identified the major issues that need attention if the agriculture and food sector is to be successful over the next ten to fifteen years. A core component of the report was a chapter on environmental services on private land. The Reference Group highlighted that market based incentives are likely to be more effective than regulation in recognizing the role of farmers in enhancing natural resource management on behalf of the wider community. Market based incentives include: payments for entering voluntary covenants; offset trading; and environmental service auctions. The Group recommended:

A successful national program to provide market based incentives for landholders to deliver public good benefits on private land is needed and should:

operate nationally, but with regional organisations having an active role; allow multiple purchasers of environmental services; be voluntary, equitable and competitive between potential suppliers; be determined on the basis of the environmental outcomes of the area


conserved relative to the cost; be efficient to run and effective in providing value for money for landholders, taxpayers and the community. 22

The Reference Group noted that the impending conclusion in mid 2008 of the Natural Heritage Trust and National Action Plan on Salinity and Water Quality programs provide an ideal opportunity to establish a market based initiative as an important element of a successor program.


The three reports summarized above have one common thread. Market based instruments are an important element in the suite of tools to manage native vegetation on private land. In July 2002 the then NSW Department of Land and Water Conservation announced the development of an Environmental Services Scheme, which examined the use of market mechanisms for native vegetation conservation. The Scheme was designed to investigate ways of opening up new income streams for landholders by creating markets for the environmental services which they can provide.23 Since then, the Department has been a participant in the National Market-based Instruments Pilot Program, under the auspices of

the National Action Plan for Salinity and Water Quality.

The Program



released its evaluation of round one of the projects, and concluded:


Commonwealth of Australia, Creating Our Future. Agriculture and food policy for the next generation. Report by the Agriculture and Food Policy Reference Group to the Minister for Agriculture, Fisheries and Forestry. February 2006, at 153.


Izmir,G. “Government strategies in the management of landclearing.” in I Can See Clearly Now…Land Clearing and Law Reform, National Environmental Defenders Office, Network Conference, July 2002, at 58.

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