Management and Asset Security
National Farmers’ Federation
Farmers make the day-to-day
management decisions affecting more than 70 per cent of Australia’s land
mass and 70 per cent of the water diverted from our rivers and streams. They
are the most important stakeholders in good environmental management. They
are passionate about protecting our natural resource base in a bid to ensure
sustainable agricultural industries for their children and their children’s
and biodiversity conservation is the shared responsibility of all
Australians. However, Commonwealth and state legislation generally imposes
much of the cost of pubic good conservation directly on farmers.
Farmers’ property rights
are often reduced or removed to achieve a community benefit, at no cost to
the wider community. Farmers ought not to be expected to foot the bill for
public good outcomes that benefit the broader community. Such policies result
in poor outcomes for the environment, for the economy and for farming
city businesses are compensated if the government resumes land to put a
freeway through their property, farmers should be compensated if their
ability to farm their land is compromised by legislation in the public
Farmers are constantly
interacting with the natural environment. By contrast, most Australians live
in urban environments. And while they may have a strong interest in
environmental issues, they do not experience the immediate consequences of
variable climate, pests, feral animals, weeds, disease and environmental
degradation to the same extent.
Threatened species are
rarely located in urban environments. They are generally found outside
metropolitan areas, often on farming land. The aim of the Commonwealth’s
Environment Protection and Biodiversity Conservation (EPBC) Act, recently
passed by Federal Government, is to preserve threatened species for the
benefit of the entire community – but it does so by imposing onerous
regulations and costs on farmers thereby reducing landholders’ ability to
manage their farm without compensation. This ‘heavy-handed’ approach
results in poor outcomes for the environment, for the economy and for farming
better approach would be to share equitably the costs of conservation and
environmental outcomes between landholders and the general public. Incentives
could be given to farmers with significant environmental features on their
land to manage them for the benefit of the community, so that the community
contributes to the costs imposed on farmers.
regulations that reduce or remove farmers’ ability to manage their land
autonomously are imposed on farmers by the general community to achieve
environmental objectives, then the general community should be willing to
compensate farmers for any erosion in their ability to generate income from
National Farmers’ Federation was a key contributor to the
House of Representatives Standing Committee on Environment and Heritage’s
Good Conservation: Our Challenge for the 21st Century,
which was released in September 2001 (E&H Committee, 2001). This report
acknowledges that "the inquiry was provided with evidence that public
good conservation activities raised major issues for landholders. These
issues are not trivial matters and it was clear that they must be addressed
at the highest levels of government".
Committee recommended that the government examine the feasibility of a
national environmental levy to provide the public component of the financial
resources that addressing environmental degradation required.”
and introducing new methods of managing land to preserve biodiversity can be
costly, and the Commonwealth Government’s commitment to research and
development, plus compensation for adjustment costs, has a valuable role to
are also suffering because the EPBC Act is not consistent with state land
management and conservation regimes. The on-ground impact of the Commonwealth
legislation, on top of state interventions, has not been thought through
thoroughly and is causing farm management problems.
EPBC Act has a number of major deficiencies. A landowner can be managing the
land fully in accordance with state legislation but be in breach of the
Commonwealth Act. The onus is on the landowner to be aware of the
implications of the EPBC Act. Neither local nor state government authorities
have any obligation to advise landowners of the implications of the EPBC Act
and Commonwealth bureaucrats do not have an understanding of local issues to
give appropriate advice.
is no provision for effective consultation with landowners. The implication
is that the Commonwealth has a complete understanding of the preferred
approach to land and water management to achieve environmental and social
objectives in every part of the country, whereas in reality this knowledge is
more likely to reside within the local community.
of further listings of threatened species under the Act until clear
consultation and administration arrangements are in place would be a positive
The National Farmers’
Federation (NFF) has been seeking support from the major political parties in
a number of areas and, following election campaign commitments from the major
political parties, will be progressing the property rights issue early in the
have an explicit undertaking from the Commonwealth
that adequate compensation will be paid if
landholders’ ability to farm their land is removed or reduced by
Commonwealth legislation such as the EPBC Act.
Government has also agreed to a significant
strengthening of Council of Australian Governments (COAG) processes in regard
to environmental management—to ensure better coordination of
State/Commonwealth land management and environment protection legislation,
improve consultation processes and address the issue of compensation.
We are also seeking an
agreement by all governments to institute an incentive-driven, not
legislation driven, approach to environmental management.
NFF has also called for an
explicit acknowledgment of the economic and social implications that can
result from listings under the EPBC Act and improved community consultation
processes. In particular, NFF requires a specific implementation plan from
the Commonwealth Government that explains how they will act once species or
areas are listed as threatened.
Research and development
support and a commitment to meet the adjustment costs of introducing new and
more sustainable farm management practices are also vital ingredients of the
most effective land management strategy.
We have also sought a
commitment that there be no further listings until consistent State and
Commonwealth administrative arrangements are in place.
Productivity Commission report released in May, 2001, Cost
Sharing for Biodiversity Conservation: A Conceptual Framework, outlines a
number of issues associated with the property rights debate (Aretino et
al; 2001). The report acknowledges that "clarification of
property rights is likely to be an ongoing issue. This is because community
expectations of what is considered an acceptable environmental standard may
change over time to reflect a standard either higher or lower than that
implied under existing property rights.
For instance, community preferences for biodiversity conservation may
increase in light of improved understanding of the significance of
Australia also needs to
review water reform under the COAG agreements. Only secure water property
rights, which are tradeable, will ensure that water resources are used
sustainably, for the benefit of all Australians, in the long term.
Inefficient and inappropriate land and water use has created problems of
national significance such as rising salinity and falling water quality.
In recognition of the
seriousness of this issue, the NFF established a special Water Task Force in
May, 2001. That task force has just finalised its report, which states that:
“It is the National Farmers’ Federation’s view that the Council of
Australian Governments’ water reform agreements have not been implemented
to deliver on promised water property rights”.
It also found that there
are six fundamental characteristics of a water property right:
– a continuous period measured in years that the property right is held;
– modification or alteration to account for recognised constraints on the
availability of water resources;
– an entity holds the water property right exclusively so that it can be
traded in a market place;
Of Title – secured to the extent that removal or impairment is
compensated and the rights are adequately registered to facilitate
financing and transfer;
– easy transfer of water property rights on a permanent or temporary
– capable of being shared or subdivided.
characteristics are not mutually exclusive. They must all be present for a
true property right to be acknowledged and no alteration to one
characteristic ought to be able to erode any of the other five.
A 1998 Industry Commission
Full Repairing Lease: Inquiry into Ecologically Sustainable Land Management outlined
components of a property right (Industry Commission, 1998). The list
reflected the characteristics of property rights put forward by NFF, but also
included enforceability, saying “property rights are secure from
involuntary seizure or encroachment”.
It is now becoming obvious
that one of the key steps in the COAG Agreement was the establishment of
property rights, with respect to water once water was separated from land
title. This has not been carried out in all states, with the resulting
situation that in financial negotiations, the level of security previously
enjoyed has been seriously eroded.
All Australian governments
have recognised the need for water reform and the Council of Australian
Governments’ has committed to:
the way water charges are set and the level of costs recovered;
existing allocation and water management systems; and
trading in water rights so that those that can use the water most
productively can get access to the resource.
water property rights – involving clear specification of entitlements in
terms of ownership, volume, reliability, transferability, and if appropriate,
quality – are a prerequisite for all of these initiatives.
The current practice of
state governments clawing back over-allocated water licences, with no
financial compensation, is at odds with regional communities’ need for
certainty in their infrastructure investments. Clawback without compensation
actually threatens environmental outcomes due to the contention over equity,
grid locking decision-making processes.
In Australia, state and
territory Governments historically owned the rights to all ground and surface
water. Governments then used licenses, permits and agreements to share the
resource between water users. However, these entitlements have often not been
issued as part of a comprehensive resource management system.
Until recently, water
entitlements were tied to a particular piece of land, water storage or
irrigation scheme, limiting their ability to be traded and giving them no
legal status independent of the land or infrastructure to which they were
tied. All states and territories now have legislative frameworks in place
that separates “water property rights” from land and title.
However,the frameworks are not consistent and often do not allow farmers and
their financiers to form a reasonable expectation about the tenure and the
security that the entitlement will deliver over time. This has seen a
significant reduction in asset security, and needs to be addressed as the
water reform is finalised.
The National Farmers’
Federation is seeking Australia-wide recognition of and respect for secure
water property rights. In establishing these rights, water users must get the
maximum degree of security about the nature of the property right, so that
they are able to form a reasonable expectation of the benefits provided by
the right. And compensation must be paid where the value or security of water
rights is eroded by government actions in order to attain ‘public good’
The policy aim of the NFF
is to ensure that farmers are compensated if and where their property rights
are eroded or removed.
B., Holland, P., Matysek, A. and Deborah, P. 2001, Cost
Sharing for Biodiversity Conservation: a Conceptual Framework,
Productivity Commission, AusInfo, Canberra, Australia.
The House of
Representatives Standing Committee on Environment and Heritage Report
Good Conservation: Our Challenge for the 21st Century,
(2001) Canberra, Australia.
Industry Commission. 1998, A
Full Repairing Lease: Inquiry into Ecologically Sustainable Land Management, Canberra,