Land Stewardship : A Pillar to Reinforce Natural Resource Management?
of Natural Resources and Environment, Victoria.
opinions expressed in this work are those of the author only
and are based on research completed for a PhD at the University of Melbourne.
In the 1940s, Samuel Wadham,
Professor of Agriculture at the University of Melbourne, toyed with the idea
of giving farmer committees the power to remove farmers from their land for
poor stewardship of the land (Humphreys
Recently a rural newspaper
ran a ‘war on weeds’ campaign in which frustrated landholders were
invited to write in about the weed problem on neighbouring properties. Aside
from attacking irresponsible neighbours, contributors generally directed
criticism at poor enforcement of regulations by government. Meanwhile, calls
are being made for a major public investment in environmental management on
private land of up to $6.5 billion annually for 10 years. How different might
these debates have been if farmer groups had received a mandate to enforce
stewardship in the 1950s?
Recent proposals for a duty
of care (Industry
Commission 1998, Australia 2001) have placed the question of
regulating farming activities according to the concept of stewardship back on
the public agenda. The duty of care and other policy initiatives are under
consideration because key indicators of the state of land management and
biological diversity are worsening (State
of the Environment Advisory Council 1996, Walker
et. al. 1999, Williams 1999).
While environmental considerations are leading many farmers to make some
management changes, they are not generally the ‘deep’ changes now seen as
necessary (AFFA 1999)
and are generally at the periphery of the existing production system (Beilin
The duty of care would
impose obligations on all those who are connected directly or indirectly with
land management. The duty is based on what is 'reasonable and practical'
given community expectations, and on what is 'foreseeable'. The regulators
are not to approve standards as the aim is to shift responsibility to the
duty holders. Duty holders comply by adopting voluntary standards such as
codes of practice or a recognised environmental management system.
As the duty of care changes
in line with community expectations, it creates a dynamic incentive to
change. The Productivity Commission (formerly the Industry Commission)
regards the duty of care as one of three pillars of a desirable government
approach to sustainable land management; the other pillars are market-based
measures and voluntary measures (particularly management agreements).
Mandatory standards may be required if the consequences of land use are
uncertain, or if there is a high risk of irreversible damage to significant
The duty of care marks the
point below which landholders have to meet land management obligations and
above which they begin to provide public services. Binning
and Young (1997) explore the use of management
agreements with farmers to obtain conservation services over and above the
duty of care. Auctions have been proposed as a way to overcome the
information asymmetry problems when reaching agreements with farmers (Stoneham
et. al. 2000), and are currently being trialed in
Victoria and New South Wales. A potential problem is what economists call
moral hazard - payment to farmers for environmental outcomes that they may
have provided without contractual agreement (Colman
1994). Any scheme should be designed to minimise such
payments and to avoid building expectations that further payments are
required to maintain the status quo.
How could a duty of care be
enforced and updated? The Productivity Commission (1998) proposes a package
of measures, with the regulator having a role in ensuring that the duty of
care is updated as circumstances change. However, governments have
consistently shown a lack of will to enforce laws governing natural resource
management by farmers (Bradsen
1988). Regulation can take many forms, including
self-regulation and moral suasion. While Landcare groups may exert some
influence, they do not have formal powers to compel action by individual
Many commentators have
recognised the potential contribution to the public interest of a consistent
and expanded right to standing before the courts, both in Australia (Gunningham
and Grabosky 1998) and in other countries (Naysnerski
and Tietenberg 1992, Australia.
Law Reform Commission 1985, 1996). For more than twenty years environmental
legislation in New South Wales has expressly provided rights of standing to
any citizen or group without requiring a demonstration of interest (Cripps 1992,
et. al. 1999). The relatively few third party appeals in New
South Wales have generally not been frivolous (Gunningham
and Grabosky 1998, fn 35 p.105, Farrier
et. al. 1999), and overseas experience is similar (Australia.
Law Reform Commission 1985, 1996).
What if Landcare groups had
legal standing to bring an action against individual landholders before the
courts? After due process,
actions could be initiated against landholders not following the duty of care
that has been defined locally as ‘reasonable and fair’. Such an action,
or even just the threat of it, could have a powerful demonstrative effect.
Frequent resort to such action is unlikely, given the nature of the social
bonds linking landholders in small communities.
Support by government is likely to increase the willingness of
Landcare groups to act. Resourcing of such actions by government is likely to
be required, as is the case with the Clean Water Act in the United States,
which makes provision for recovery of legal costs (Gunningham,
Phillipson and Grabosky 1999). Giving third party rights to
environmental groups is a complementary means of ensuring that the regulator
takes enforcement action and exerts pressure on those defining the duty of
care to keep it up-to-date with changes in farm management practices.
Third party rights could be
abused by a Landcare group. The risks are illustrated by a recent incident,
conveyed to me by a colleague, in which a Landcare group signed a contract
with a State Government for a grant to rip rabbit warrens on stony rises. One
farmer refused to act because to do so would destroy vegetation recognised as
having conservation significance. Legal action was threatened.
In the end, the rabbits were controlled using hand measures!
A system of checks and balances, as proposed by the Productivity
Commission 1998), is clearly needed to ensure that any duty
of care covers all relevant environmental issues, and not just those regarded
as important by local farmers.
By introducing new
obligations, the duty of care changes the property rights of landholders. If
the duty of care is expected to disadvantage many land managers, resistance
is likely with farmers both ignoring the duty of care, and mobilising
politically to ensure that it is watered down. Regulation without majority
support is difficult (Gunningham
and Grabosky 1998). The need for financial support to help
shift farmers to a new duty of care has been previously recognised. Binning
and Young (1997)
argue for one-off payments which ‘secure permanent changes in property
One approach to financial
support may be to fund a re-organisation of the farming system that will
enable the farm to comply with the duty of care while remaining capable of
meeting farmer objectives into the future. Financial payments could be in the
form of adjustment assistance based on an analysis of whole farm options and
future prospects, rather than as compensation. From this perspective,
financial assistance to meet the duty of care may only be required in some
cases. In others, strategic business advice to farms that pinpoint solutions
at the level of the farm business may be enough. Emphasising farm
re-organisation is consistent with the dynamic nature of the duty of care in
that it will evolve over time, following changes in farming practices and
If payments to shift to a
duty of care were standardised across a given class of farmers, payments must
equal the marginal costs for the farm that is least willing (on financial
grounds) to comply. Standard payment schemes have been previously criticised
for incurring ‘the moral hazard of paying farmers for things they need no
payment to perform’ (Colman
1994 p.310) and for being inefficient (Weaver 1998).
A competitive auction system could be used to lower costs by revealing
landholder’s willingness to accept (Latacz-Lohmann
1998, Stoneham et. al. 2000). However, competition cannot be
introduced if every farm is required to comply. Direct costs may be lowered
by individually negotiating agreements with landholders. The disadvantage is
the high transaction costs.
One problem with standard
payments, individually negotiated agreements and auction systems is that they
do not necessarily act as an incentive for a shift in strategic behaviour
whereby farm business and land management goals might both be more easily
met. Investigations into modifying such payment vehicles in this direction
may be fruitful.
Our understanding of
opportunity costs and farmer motivation are important to the question of
assistance to comply with a duty of care. Concern is not with the alternative
uses to which a particular parcel
of land might be put, and the net income that might be foregone. The critical
consideration is opportunity to invest across the farm, and alternative
futures that might be available for the farm business. Beyond the question of
opportunity cost, objectives of satisfying rather than profit maximisation
motivate farm family behaviour, as they motivate many firms (Leibenstein
1979). Once farmers can expect satisfactory income levels,
investment to comply with standards of land management is likely to be
forthcoming. Surveys show that stewardship is an important goal of farmers (Curtis
1997), and environmental attitudes are positive to the
extent that this is consistent with good farming practice and business
and Wilkinson 1997).
New farm business
opportunities depend in part on the capacity of farm businesses to adjust.
Recent research shows that there is considerable scope to increase
intensification of pasture production on land with high capability. This
gives scope to manage other areas of the farm more benignly (Crosthwaite
and Malcolm 2000) Opportunities will also arise as markets change.
There is a growing emphasis on ‘clean and green’ production in ‘boutique’
markets, more so than in bulk commodity, markets. The industry research and
development corporations, and corporations such as Unilever, are trialing
environmental management systems to position industries so that farmers can
take advantage of market premiums should they arise.
Taking the dynamics of farm
businesses and changing opportunities into account, the sum required to ‘repair
the land’ in Australia needs to be recalculated. There are fundamental
weaknesses in the method by which the proposed $6.5 billion per year has been
calculated, estimating the area affected by each form of land degradation and
multiplying it by the estimated cost of repair per hectare. The sum should be
based on more careful specification of the problem (Pannell
2001) and then on determining the sum required by farmers to do
the work - in the context of future farm business opportunities.
In conclusion, farm
businesses are dynamic entities. A set of mechanisms, rather than one alone,
will be required to achieve policy goals. The duty of care can be one of the
pillars, but needs to be supported by adjustment assistance, management
agreements and third party rights, as well as demand-led measures and
mandatory standards in some cases. However, these mechanisms cannot work in
isolation from institutional changes. As concerns about the sustainability of
Australian agriculture have emerged over the last two decades, conflicts in
goals, policy and administration have been evident. The reasons are not
simple, and a concerted program is needed (Dovers
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