Martijn van Grieken1, Mark Poggio2, Marcus Smith2, Bruce Taylor1, Peter Thorburn1, Jody Biggs1, Stuart Whitten1, Claire Faure3 and Alexis Boullier4
1 CSIRO Ecosystem Sciences
2 Queensland Department of Agriculture, Fisheries and Forestry
3 ENSAIA France
4AgroParis Tech France
There is now an extensive amount of literature documenting, in increasing detail and confidence, the sources and potential implications for pollutants entering the Great Barrier Reef (GBR) lagoon. Land uses that contribute to this are dominated by diffuse source agricultural pollutants, with the primary source differing by industry: sediments are primarily generated by grazing activities whilst nutrients are largely attributed to cropping activities, which is dominated by sugarcane production. Agricultural chemicals are exported by both industries although the type of chemicals (active ingredient) differs. Reducing the level of pollutant exports will require the widespread adoption of improved management practices and continued research and development into innovative solutions to minimise diffuse-source agricultural pollutants. The focus in this Reef Rescue Research and Development project “Integrated assessment of BMP cost-effectiveness and decision tool for regions and landholders” is to evaluate the financial-economic and water quality implications of changing management practices, including their cost-effectiveness, as well as the barriers and opportunities offered by a variety of practice changes.
Estimates of the relative cost and effectiveness of improved practices are becoming available for various practices and locations. Within the cane industry, results from recent economic research suggest that some practices are likely to increase the returns to landholders once adopted. However, adoption of these practices varies considerably; there has been strong adoption among some groups of farmers and in some locations, but relatively little in others. We hypothesise that this may be the case because previous approaches do not adequately represent the diversity of farm enterprises across land types, operating structures, or transition costs. Furthermore, gains may not be sufficiently large to either motivate change or to be identified by landholders amongst other sources of production variability and risk. Therefore, the generalised results of previous studies may not apply universally, and instead some groups of landholders may experience greater than expected gains from adoption, while adoption may impose costs on others. Such differences may be driven by an elaborate combination of biophysical and enterprise variables. Biophysical variables are likely to include soil type, rainfall and other weather variables. Enterprise variables are likely to include structural factors involving farm size and operating strategy, capital and labour constraints, and the farmers’ operating objectives.
The component reported in this report is part of the broader RRRD039 project. The focus of this particular report is to analyse socio-economic, institutional and financial-economic datasets to:
The social-institutional analysis conducted as part of this project identified several aspects that were influential in the decisions made by growers to participate in the incentive-based Reef Rescue program, as well as revealing insights into the experience of growers who participated. These aspects broadly include:
The financial-economic analysis highlighted a few key messages to support the notion that accounting for biophysical and enterprise-structural variability (heterogeneity) in natural resource management (NRM) is likely to be cost-effective:
More specific management practice related messages generated from these studies include:
There are some significant areas of convergence between the social-institutional and financial-economic analyses above.
Benefits and application of the findings
There are ample opportunities within the sugarcane producing industry to reduce pollutant exports to the Great Barrier Reef (GBR) lagoon. These opportunities include, but are not limited to, implementing management practices such as modifying nutrient application rates and methods, reducing tillage, and trapping sediment. However, implementing a process of management change across the farming system often requires substantial capital investment combined with the uptake of additional operational expertise and time spent managing the process itself. Hence, the main objective of the research in this component of the RRRD039 project is to evaluate the financial-economic implications for landholders when changing their management practices to those that have the potential to reduce the loss of sediment and nutrients to the GBR lagoon. This research builds on previous economic work undertaken using single representative farms by taking into account the unique aspects of each region, such as the heterogeneity (variability) in soil types, climatic zones, and farm sizes.
The information generated from this research is relevant to the interests of numerous stakeholders, including:
A number of potential avenues for future research are created by this work. First, while only a limited number of nutrient management practices have been subject to investigation, others may exist with the potential to achieve greater improvements in water quality. It will be interesting to determine the on-ground implications of any new technologies including profitability and water quality outcomes. Second, further research could be undertaken using a different approach, whereby actual nutrient efficiency targets are developed to determine the required practice change to achieve a desired level of water quality. Moreover, what are the economic implications of achieving these targets via any particular strategy? Here an understanding of the relative costs and benefits, in social and institutional terms as well as financial and economic terms, of different delivery strategies (e.g. individualised, group-based, industry-based) could be ascertained to improve program implementation in different regional contexts. Third, the impact of a change in industry structure (size of farms, location and number of farms) on water quality could be investigated. Finally, given the level of heterogeneity between and within regions, spatial targeting is likely to lead to the most cost-efficient way of improving water quality while maintaining a healthy industry. Accordingly, the information presented through this research can be further used to evaluate and monitor cost-effective policy instruments, institutional settings, delivery mechanisms, and ways of targeting local community support to achieve desirable water quality levels emanating from a heterogeneous industry and landscape.