Category Archives: Agriculture

307 – John Kerin’s memoirs

John Kerin was Minister for Primary Industries in the Australian Government between 1983 and 1991. His memoirs are now available as a free download. Having seen him speak several times since he ceased being a minister, I think his memoirs should be fascinating and very informative. Agriculture was very lucky to have him as minister during this period of great change and disruption. 

John Kerin was unusual as a minister in that he knew a lot about the issues he was responsible for. Not only was he experienced as an agricultural producer, but he was also trained as an agricultural economist, and worked for a while in the Bureau of Agricultural Economics.

Apparently, his expertise was not always appreciated by his department. In the last part of the book he says “the ethos of some government departments was that they preferred ministers who knew nothing – the better to manage or control them. However, I thought that it was not necessarily an impediment to know something about your portfolio areas. The constant rotation of ministers is not good for policy making.”

Not only did he know a lot, he was clearly very thoughtful and remarkably frank. “Nor … do I want to give the impression that I was always sure about what I was doing, what the outcome of some policy options may be or where the changes and reforms we were introducing may lead. … By nature I am a pessimist, slow to come to decisions and generally believe that I am wrong until convinced of the path to take.”

A landmark event during his term as minister was the wool crisis. His eventual decisions for the industry were critically important and rather heroic as they faced fierce opposition from the whole industry, which seemed determined to do itself almost unlimited damage.

Some of his perspectives are all too relevant in our current political climate. “I have always been terrified by people in politics who are absolutely sure they are right, have God on their side or tell me they are ‘men of principle’. Such people seem able to blind themselves to their own hypocrisy and humbuggery – and are dangerous.”

I’m really looking forward to reading the book.

Further reading

Kerin, J.C. (2017). The Way I Saw It; The Way It Was: The Making of National Agricultural and Natural Resource Management Policy, Analysis and Policy Observatory, Melbourne. Available here: http://apo.org.au/node/76216

Pannell, D. (2014). Supply and demand: the wool crisis, Pannell Discussions no. 266.

304 – Predicting behaviour change by farmers

I have a new paper out describing ADOPT, the Adoption and Diffusion Outcome Prediction Tool. We’ve paid the money to make it Open Access, so I hope you will make it worth our while having done that by going to the journal web site and downloading the paper for free.

There are many hundreds of research papers on the adoption of new practices by farmers. Pretty much all of them set out to explain the relative contributions of different factors to the past adoption or non-adoption of particular practices in particular regions. There are a bunch of review papers that try to make sense of the voluminous literature (including a beauty by Pannell et al. (2006)).

However, neither the original papers nor the reviews set out to address an issue that really matters to many people working in the agricultural sector, in research, extension, natural resource management, policy, sales, etc. That issue is the likely future adoption of a new practice that has not yet been adopted. An interdisciplinary group of us set out to fill this gap by developing ADOPT.

There are a large number of users of ADOPT – there have been over 1000 downloads of the tool, and many examples where it has been used effectively in planning or evaluation of research, extension or policy.

Now we have published this paper, which describes how we developed and validated the tool, how it is structured, and some example of its use.

You can download the paper for free here and you can download the ADOPT tool for free here. If you do it quickly, you’ll be one of the first to get a new update of the model, just released on June 29.

Also available now is Version 1.0 of the “Smallholder” version of ADOPT, designed for use in developing countries. Download it from the same web site here.

Also see http://www.ruralpracticechange.net for a set of videos on the topic of farmers adopting new practices.

References

Kuehne, G., Llewellyn, R., Pannell, D.J., Wilkinson, R., Dolling, P., Ouzman, J. and Ewing, M. (2017). Predicting farmer uptake of new agricultural practices: a tool for research, extension and policy, Agricultural Systems 156, 115-125. Journal web site for free download of the paper.

Pannell, D.J. and Vanclay, F.M. (eds) (2011). Changing Land Management: Adoption of New Practices by Rural Landholders, CSIRO Publishing, Canberra. Available at the publisher’s website.

Pannell, D.J., Marshall, G.R., Barr, N., Curtis, A., Vanclay, F. and Wilkinson, R. (2006). Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture 46(11): 1407-1424. Journal web site, or email David.Pannell@uwa.edu.au to ask for a copy.

 

300 – MOOC feedback

Last week I checked out the comments that people have left about the free online course (MOOC) that I offer, called “Agriculture, Economics and Nature”. Some of the comments were so heart-warming that I thought they were worth sharing.

They highlight what an amazing thing it is to provide things to the world on an open-access basis. Thanks to the internet, you can connect with, influence and help hundreds or thousands of people who you will never meet. The diversity of commenters, and their circumstances, is just amazing.

My motives in preparing the MOOC were selfish (to attract students to our courses at UWA, to raise our School’s profile), but reading these comments gave me such a warm glow that it makes me hardly care about that aspect (although it clearly has been somewhat successful in delivering those selfish aims as well).

It may seem like I’ve cherry picked the comments, but I promise that these are quite average in their enthusiasm. I’ve only tried to select the more interesting ones. I’ve edited out names and tidied some up a little, but not changed content at all.

I am a 52 year old single mother, from Barbados. It is my intention to operate a herbal production and agricultural business. I took the course as I needed the knowledge, since the area of agriculture would be a new and unknown area of business for me, This course has started me on the road to gaining all the knowledge I need going forward, it has exceeded my expectations, since I did not realising how intense it would be. It was a real pleasure and great learning experience for me. I am truly encouraged. Based on what I have learnt, I can now understand how to apply all of it to my pending operation, it’s invaluable. I loved the structure of the course, the intensity, interest, delivery and concise method of explanation and teaching.

I’m from Nepal. I recently completed my Masters in Plant Biology and Plant Biotechnology from India. I took this online course since I was idle at home, and also because I was curious about the title. I was pleasantly surprised by the richness of the content, and I appreciate your efforts profusely. I enjoyed ‘Pannell Discussions’. There, for the first time in my life, I came across the expression- “bang for the buck” (fascinating and crisp indeed!). I’ve been throwing that that expression around for sometimes.

mooc1Thanks for this great opportunity to learn and gain insight about these complex but relevant interactions between economy, agriculture, and environment. I have learnt about a lot of complex theoretical models dealing with sustainable development, but written by bureaucrats or academics and usually not applicable on the field. This course was refreshingly down to earth, assuming realistic scenarios of limited funding, farmer’s basically economic orientation, and scepticism to change.

Thanks for the course. I enjoyed it a lot – some new content, some refreshing old information, and an agriculture/farmer focus which was what I wanted and was new to me. It was well structured in bite-sized parts perfect for this type of learning. I also enjoyed the excel components, and in fact I have found some published studies I want to apply some of this mathematics to. I currently work in a freelance capacity, recently relocated to Vietnam, but from the UK where I previously worked for the Overseas Development Institute. I focus on the economic and policy challenges to achieving better climate and development outcomes. I have had many insights from your course.

Wow. I have never really been an academic but have always tried and tried and tried again until I finish it. I am from South Africa and have moved here for my partner who is a country lad. I fell in love with the farming here and now I work for a fruit and veg company and I loved your course. I had to retake a lot but I have finally done it. Thank you!

I very much enjoyed your course, which provided me a comfortable introduction to the wide spectrum of agro-eco issues, and dovetailed nicely with a microeconomics Coursera offering that I happened to be taking concurrently. I am a geographer at University of California Santa Barbara.

I am an Agriculture and development economics, doctoral student from University of Agricultural Sciences, Raichur. I have learnt a lot of new things in the course. I thank you for giving such an amazing enriching inspiring lecture. The references taken in the course were precise, perfect and appropriate and very useful links and pictures. Thank you once again.

mooc2I work for an environmental NGO in California where we engage farmers to adopt more sustainable/resource conservation practices (e.g., habitat restoration, strategic water use) that are compatible with sustained levels of production. The course already sparked some questions that I have brought to my job, such as what do we actually know about the economic payoff of landscape-scale conservation. Thank you so much for the course. This was my first-ever MOOC and I’m glad I took it!

I am much pleased to learn from your experience and knowledge. I am a BSc undergraduate (biochemistry) student of the Kwame Nkrumah University of Science and technology in Ghana. I am planning of venturing into Msc. Agriculture as graduate studies and that triggered in partaking this course because of how poor our agricultural system is gradually heading way into abyss and if measures are not put in place by right expertise, failure will eventually embrace us.

Greetings from Rwanda! I would like to express my deepest gratitude for the ”Agriculture, Economics and Nature” course offered by the University of Western Australia on Coursera. I am now happy to have passed all the quizzes on the 4th of September with 79.4%, and received my Certificate. I will use the skills gained in my daily work.

I am got the BSC degree in the field of soil science from the college of agriculture and forestry, Mousel University in 1979 and the MSC degree from the college of agriculture, Baghdad University in the field of soil chemistry (Salinity) in 1985. This help me in my job (Project director).I love the proposal of all subjects in this course. Finally I thanks professor david pannell so much. excuse me about the language.

I really enjoyed the program. I wish I had a chance to say a proper thank you in person to you for the way you lectured. It was simple, precise and very resourceful. I am an agribusiness postgraduate student in NZ, originally from Cameroon. Worked in the bank as farm loan manager and then operation manager.

I will be going off to King’s College London this September to study international development. I would like to say a big thank you for putting together such an interesting and informative course!! I learned a lot about current problems facing the agricultural industry and different agri-environmental projects both in a global and an Australian contexts (which is really cool since I have always wanted to live in Australia at some point in life!). I will definitely recommend this course to my friends!

Hi, i am from Ghana. I am a young lady who wants to venture into the field of Agriculture. This six-week course has enlightened me on all resource available to farmers and how policies are put in place to help and motivate farmers. Every section was educative and self-explanatory.

I am from Zimbabwe but currently staying in the US. I would like to take this opportunity to express my gratitude for your service. It was an interesting course and I really enjoyed all your lectures. I am an animal scientist, I have a passion for animals and agriculture as a whole. I wish to start my own agriculture enterprise because I can feel I am now well equipped with all the knowledge needed. Once again, thank you very much for such a rich and life transforming course.

The course structure made participation an unforgettable experience; Professor Pannell expertly delivered lessons and the interview sections with stakeholders further underpinned everything taught. To Professor Pannell, I want to say learning with you has been a memorable one.

First of all, I would like to thank you for giving me a great opportunity to learn more about economics in agriculture. I’m an agronomist, and I’m currently the Food Security Advisor for World Vision Niger. I’m so excited about the opportunity to explore the scope and nature of relationship between Environmental Governance and Disaster Risk Reduction.

Thanks for going through the trouble of delivering this course online. I am just finishing my PhD in environmental sciences at the moment and felt like I needed some perspective if I were to undertake research for agriculture in the future. A lot I learnt in this course, thank you.

I work in the Agribusiness department of a commercial bank, and i took the course as one of the preliminaries to a Master degree in Agribusiness since my background is not in Economics. Prof Pannell made the teaching so easy to follow and understand especially the calculations and the graphs. i was so excited when i learnt how to calculate the discounting factor. This is my first experience in certificate online course and i find it very inetersting and a bit challenging too.

cornThank you so much for providing this course. I had learned a lot I had never known before. I’m an Au pair living in Virginia U.S. currently. I spent my free time after babysitting to finish the online course. I had an Agriculture bachelor degree which related to crop protection, and I had been working in a Fungicides company for two years before I came to the US. Meanwhile, I’m seeking the opportunity to work on some organic farms here. I will be working on a local organic farm from this month to next month. Thanks for laying out plenty of online resource about agriculture and this fantastic course.

Thank you so much for the methodology used in this course. The questions and answer are very good they make you think very well. Even though I had problems with my internet during the course but I still got through. Thank to other contributors of the the program. Am looking to work on Food and Nutrition Security Using Urban and Peri-Urban Agriculture for a better livelihood for my PhD work.

I hold a Masters Degree in Physical Geography from Free University of Berlin in Germany and specialized in Natural Resource Management. Many thanks for this really great course. I liked every section of the course, I really enjoyed all the relevant material and advice and those tremendous valuable tools! Thank you so much. Returning to Germany it will certainly help me in my new career here at ADRA Germany coordinating the department for Climate Change Adaptation and Renewable Energies.

Many thanks for a really interesting and well-paced course, it was fantastic. I’m going to miss those slides and the music!

Maybe this collection of stories and feedback has inspired you to check out the course yourself, joining the 7000 people who have already enrolled. You can do so at: https://www.coursera.org/learn/agriculture-economics-nature

For more information about the course, you could check out this video.

 

 

290 – Advice for successful agri-environmental policy

Research and practical experience with agri-environment programs around the world provides many lessons on what leads to success or failure. New programs are often designed without sufficient awareness of these lessons, resulting in lost opportunities to achieve more valuable outcomes. A workshop to identify these lessons was held a couple of years ago, and the results have just been published by ANU Press as a book.

The book is available for sale or free download here. I’ve got a couple of chapters in the book, including one where I try to identify “best-practice in design and implementation” of agri-environmental policies. It is based on my experience over the past 15 years or so, working with federal and state agencies and regional bodies in Australia, and some similar organisations in several other countries. Here’s a longish extract. This is a longer-than-usual PD as I wanted to keep this material together in one post.

Design of programs/institutions

Additionality: Agri-environmental programs should aim to avoid paying farmers for undertaking actions that they would have done in any case. In other words, managers need to evaluate whether the benefits generated by a program investment are ‘additional’.

Continuation after investment ends: Where a program is intended to provide only temporary support to farmers (eg, in all Australian programs, but not in European programs), it is important to ensure that the actions being supported are attractive enough that farmers will continue to undertake them once funding ends. Otherwise the investment has no enduring benefit. These first two principles combine to mean that, where support will be temporary, perhaps the only defensible role for agri-environmental payments is to encourage farmers to get experience in a new practice that they are likely to be keen to continue once funding ends. The practice might be something new of which farmers are currently unaware, or one that becomes more attractive to farmers with experience.

aesAppropriate institutional delivery: In some agri-environmental programs, responsibility for overseeing some or all on-ground delivery of projects is devolved to regional organisations. This has been the case in all of Australia’s major programs since the late 1990s. In these cases, the program needs to be designed in a way that provides incentives for these regional organisations to respond appropriately. In particular, they should be incentivised to pursue sustained improvements in natural resource outcomes, rather than to support project activities without considering their resulting outcomes. There should be an emphasis on spending program resources well, rather than rapidly. Unfortunately, some of Australia’s major programs have generated incentives that go directly against these recommendations. Short time frames for programs and rules that funding will be withdrawn if not spent rapidly enough increase the difficulty of meeting this best-practice requirement. (Chapter 5 on environmental NGOs discusses how these organisations can help here.)

Balancing small, moderate and large projects: In programs where the availability of funding is small relative to the amount needed to fund all attractive projects (ie, in all Australian programs), there is often a temptation to share the available resources amongst a large number of small projects. Sometimes this results in good leverage of program resources, but often it means that almost all projects have inadequate resources and are unable to achieve worthwhile outcomes. This advice sometimes clashes with political preferences to support many projects rather than few. A compromise strategy could be to use a portion of funding (eg, 25 percent) to support many small projects to satisfy political needs, and use the remaining 75 percent to support larger projects that are more likely to be effective. On the other hand, achieving the most ambitious environmental targets is often disproportionately expensive, with costs increasing dramatically as targets become more ambitious. To maximise outcomes, it may be best to pursue a moderate number of moderate sized projects, rather than many small or few large projects.

Sufficient time for planning: Program performance is often hampered by a tendency for agencies to delay planning new programs until the end of a previous program is imminent or past. Good planning and design of programs and prioritisation of investments requires more time than is usually allowed. Ideally, organisations should commence planning and analysis to develop the next program years before the end of the current program. Even though the scope and parameters of the next program cannot be known in advance, these can be predicted, and sometimes influenced, by the agency to some extent. Having already-analysed investment options ready to put forward can be highly persuasive, and increases the likely environmental benefits generated.

Investment longevity: Finally, funding for agri-environmental programs in Australia tends to be temporary and short-term – typically five years. Environmental problems usually take much longer than this to resolve, so systems for providing long-term funding should be used where possible. If it is not possible to ensure long-term funding, then this should have a strong influence on which projects are selected for funding. In particular, projects that would require significant funding in the long-term to maintain the benefits generated by an initial project should not be supported. For example, most projects for control of feral animals or plants would fall into this category because feral animals reinvade once control ends. Similarly, cases where farmers are likely to disadopt practices once funding ends should be excluded. Typically, programs are much too optimistic about ongoing adoption of practices post-funding.

Design of projects/investments

SMART targets: A number of agri-environmental programs have been criticised for failing to establish appropriate targets (eg, European Court of Auditors, 2011; Auditor General, 2008; Park et al, 2013). Specifically, targets should be SMART (Specific, Measurable, Achievable, Relevant and Time-Bound) in order to facilitate monitoring and evaluation of a program, and to ensure that the funded investments are focused onto suitable activities (see Chapter 4 on setting SMART targets).

Project logic: Many projects funded in agri-environmental programs are not designed in a logically consistent way. They are consistent with a ‘project logic’ but only in a qualitative sense. They fail when assessed against quantitative questions, such as ‘are the funded activities sufficient to achieve the intended land-use changes?’ or ‘are the intended land-use changes sufficient to achieve the desired natural resource outcomes?’ A good project logic is more than a description or diagram of connections between elements of the system being managed or influenced; it quantifies the connections and makes assumptions transparent.

Selecting the right policy tool: There is a tendency for little thought or analysis to be put into the selection of policy mechanisms to be used in a project or program, resulting in inappropriate choices in many cases. In Australia, there is too much reliance on extension in situations where it cannot deliver the desired outcomes. For example, Australia’s national salinity program between 2001 and 2007 relied mainly on extension to encourage farmers to change their practices, but the practices being promoted were not attractive to farmers on the required scale and so were adopted to a very limited extent – much too limited to achieve the program’s goals (Pannell and Roberts 2010). On the other hand, in Europe and the United States, financial payments are almost the sole mechanisms used, often funding activities that are not additional. The framework of Pannell (2008) helps organisations to evaluate the type of mechanism that is most suitable for a particular project. (See also Chapter 18 on the choice of tools depending on public benefits and private benefits arising from an investment.) Sometimes programs specify which policy mechanisms will be used by projects prior to identification of the projects, and then project investments are selected without considering whether they are suitable for the pre-determined policy mechanism. Preferably, policy mechanisms should be selected to match the type of projects that will be necessary to achieve the desired program outcomes. They should be project-specific, to some extent. As noted in Chapter 18, Australian programs tend to rely too much on extension and too little on the development of technology.

Ranking projects/investments

Prioritisation: Where funding is limited, prioritisation of investment options is essential. The quality of the prioritisation process can make a major difference to the natural resource outcomes delivered (eg, Barry et al, 2014).

Rank projects: Programs should prioritise projects, not problems, regions or issues. Some programs prioritise regions or issues without defining projects, but this means that it is not possible to properly consider issues of project cost, project risks, project benefits, or time lags, all of which should be factored into the prioritisation process.

Rank according to value for money: Projects should be ranked according to their value for money: a measure of their benefit divided by their cost (see Chapter 15 on designing cost-effective agri-environment schemes). Failure to do this is one of the most serious mistakes that can be made when ranking projects, but unfortunately it is common. Some systems fail to consider costs entirely, some do include costs but fail to divide by them, and many include only some of the costs that should be considered. For example, it is important to factor in long-term maintenance costs, since they vary so much between different projects, but few Australian systems do so. If maintenance costs are needed but are not expected to be provided, then project benefits should be scaled down accordingly in the ranking process.

Measure the gain against a counterfactual: When ranking projects, benefits should be estimated from the predicted difference in natural-resource outcomes with versus without the proposed investment (Chapters 19 on counterfactuals). Although this seems like common sense, Maron et al, (2013) found that 15 out of 16 systems in actual use for ranking biodiversity projects failed to do this correctly.

Incorporate all the benefits and risks: There are many factors that could be considered when estimating the benefits of a proposed project. The essentials are: the potential values generated, the likely level of adoption/compliance with the project by landholders (Pannell et al., 2006; Chapters 12 and 13) various risks that might result in project failure (technical, social, financial and managerial risks) and time lags until benefits are generated.

Use a sound metric: A commonly neglected issue is how to combine the variables that determine benefits and costs into a metric for ranking projects. Most metrics in actual use are theoretically unsound and provide poor rankings, even where project information is accurate. Indeed, as is discussed in chapter 17, the level of benefit delivered is more sensitive to the quality of the metric than the quality of the information fed into the metric. Potential benefits from investment are very sensitive to the use of inferior ranking metrics. Chapter 17 on metrics and Pannell (2015) outline the requirements for a sound ranking metric.

Managing uncertainty

When decisions about project funding are being made, uncertainty about those projects is usually high. Common areas of major uncertainty include the technical feasibility or effectiveness of the proposed actions to be funded by the project, and the valuation of those environmental benefits that are generated. Uncertainty should be accounted for in several ways.

Identify key uncertainties: Project proponents should be required to identify key uncertainties, and to specify what will be done in the project to reduce them.

Carry out feasibility assessment and pilot studies: Projects above a certain scale should be subject to rigorous feasibility assessment before longer term funding is committed. Funding to support information collection, perhaps in a pilot study, should be provided for 6 to 12 months, after which longer-term funding should be conditional on the results obtained.

Learn from early experience: Projects and programs should be managed in an adaptive way, with information collected during early stages of the program or project being used to inform changes in management or even cessation in some cases. In practice, few programs operate with that degree of flexibility, resulting in continuation of poorly designed investments past the time when their faults are apparent.

Managing people’s biases, preconceptions, self-interest

Acknowledge the values that people bring with them: Being human, the people involved with agri-environment programs are subject to biases, preconceptions and self-interest (consider the way restoration vs conservation is valued in different ways in different places Chapter 10), all of which can reduce program performance. If managers are aware of these human traits, they can introduce systems to limit their negative impacts.

Optimism vs realism: A pervasive problem is the tendency for people to be overly optimistic about proposed projects. It is common to see proposals in which the benefits are exaggerated, and the costs, risks and time lags are under-estimated. Several factors contribute to this, including vested interests, wishful thinking, and a failure to recognise all relevant difficulties and risks that are likely to affect a project. The ideal strategy to overcome this problem is serious independent expert review of project proposals, but this is only justifiable where projects are sufficiently large. This is another factor that tends to favour moderately large projects over small.

Self blindness: People involved in allocating program funds commonly perceive that their existing prioritisation process is of high quality. For example, in a survey we found that staff from most regional natural resource management organisations believe that their process is better than average – clearly an impossibility. In reality, the majority of prioritisation processes I have examined have had serious problems. The belief that they are strong is an impediment to the improvements that are needed. Addressing these misperceptions required strong leadership and participation in appropriate training, and it may be assisted by appropriate signals and incentives built into the program.

Equity vs effectiveness: Proposals to target investment in high-priority projects sometimes meet resistance in the form of arguments that this is inequitable – that resources should be distributed widely amongst many projects on the grounds of fairness. If natural resource or environmental outcomes are desired, these arguments should be resisted, as they can have a serious adverse effect on the achievement of those outcomes. A case built on maximising environmental benefits can readily be built.

Managing transaction costs

When considering potential improvements to the design and implementation of agri-environmental programs, there is a balance to be struck between improving natural resource outcomes and increasing transaction costs (Pannell et al., 2013b; and Chapter 16). The most detailed rigorous approaches are only worth the transaction costs involved for relatively large projects. To limit overall transaction costs I have two suggestions.

Beware many small projects: Avoid having the program being dominated by numerous small projects for which an investment in information and analysis cannot be justified. Such programs have little prospect of delivering and demonstrating genuine natural resource benefits.

Start broad, finish deep: Secondly, when evaluating potential investments, adopt a strategy of starting broad/shallow and finishing narrow/deep. In the early stages of the process, you can consider numerous potential projects, but each is evaluated in a relatively simple way that requires low transaction costs. This simple procedure is used to eliminate most of the projects from consideration. In the final stages, consider a relatively small number of project proposals, but require them to be developed in a rigorous way to allow sound decision making about them.

Further reading

Ansell, D., Gibson, F. and Salt, D. (2016). Learning from Agri-Environment Schemes in Australia: Investing in Biodiversity and Other Ecosystem Services on Farms, Australian National University Press, Canberra. The complete book is available for download (free) or hard copy (purchase) at http://press.anu.edu.au/publications/learning-agri-environment-schemes-australia

289 – Interpreting evidence through an ideological lens

Humans are prone to “confirmation bias”, meaning that when we see evidence, we tend to interpret it in a way that reinforces our existing beliefs. I felt I was observing confirmation bias in action when I observed a recent article that discussed some research we conducted. 

The tendency for confirmation bias is so strong that, in some cases, people who hold opposing views can both find support for their conflicting positions from exactly the same evidence, resulting in attitude polarisation. I would guess that this phenomenon has probably contributed to the polarization of attitudes to climate change, for example.

Occasionally I see an example of my own research being interpreted in a way that seems to exhibit confirmation bias. A recent example is our research showing that farmers in central Victoria, on average, pay more for land that includes some native woody vegetation, compared with land that is fully cleared (Polyakov et al. 2015 and see PD#287). There was some nice press coverage of the research (here and here), some social media attention, and also a brief article published on “Freedom Watch”, a web site published by the Institute of Public Affairs (IPA).

The IPA describes itself as “the voice of freedom” and on the Freedom Watch site the published articles cover issues such as freedom of speech and legal restrictions on various freedoms, including laws that restrict racial discrimination, live betting ads, and political donations. Of course, different people have different opinions on the sorts of restrictions to freedom that are discussed by the IPA, but the authors of articles on the site would tend to be at one end of the spectrum of public opinion about these issues.

ipaSo it was interesting to see the article by Lorraine Finlay (a Law Lecturer at Murdoch University) titled “We don’t need laws to tell farmers to like trees”. In the article she claims that “the strident environmental lobby … will tell you that farmers basically hate trees” and “This is the reason that we apparently need punitive native vegetation legislation across the country.” She rhetorically asks “if the private market values native vegetation, why does government have to interfere at all?” and suggests that “Rather than stripping away private property rights by imposing punitive native vegetation legislation, perhaps we would achieve better environmental outcomes by actually working cooperatively with our farmers.”

Now I’m an economist, so I’m certainly favourably predisposed towards free markets, and I’m not unsympathetic to the argument that we should avoid having laws that needlessly restrict freedoms, but this article really feels like the evidence has been shoehorned to support a pre-determined position. For a start, the premises of the article are questionable. I’ve worked on issues of agriculture and the environment for many years, in the process dealing with people from many different environmental organisations, and I’ve never heard anybody say that farmers hate trees. Maybe some environmentalists do think that, but the great majority of people who are concerned with environmental issues in rural areas have a much more realistic and nuanced understanding of farmers’ attitudes towards trees.

The claim that farmers’ hatred of trees is put forward as the reason for legal restrictions on land clearing is specious. Those arguing for these legal restrictions don’t need to invoke a non-existent hatred of trees. The real argument is that there are public benefits from preservation of native vegetation that are not sufficiently factored into the farmers’ private decisions about land clearing. The public benefits include conservation of threatened species or ecological communities, reduced salinity in waterways, and aesthetic benefits. Why does government have to interfere at all? Because, with so little native vegetation left in many regions, the marginal value of protecting it is likely to be very high, so that the public benefits of the legislation are likely to far outweigh the private costs. Even though farmers like some trees, when the benefits to the rest of the community are factored in, the optimal area of trees is larger than farmers would select for themselves. Economists describe this situation as “market failure”, since the aggregated decisions of private individuals do not add up to the best outcome for society as a whole.

Lorraine Finlay’s argument that we should work cooperatively with farmers makes me wonder whether she’s aware of existing programs that do just that. Ever since the start of the National Landcare Program in around 1990, there have continuously been major national programs built on working closely with farmers to improve environmental outcomes. That long experience has shown us that the voluntary/cooperative approach can work effectively up to a point, but is less successful for the more challenging environmental issues that are more expensive to deal with, like salinity and biodiversity conservation. It doesn’t necessarily follow that legislation is the best response, or that the system we have in place is as fair and efficient as it should be, but I do think it’s clear that a voluntary/cooperative approach is not sufficient if we seek to maximise the overall public and private net benefits.

We can also observe the results of a recent policy experiment in Queensland, in which a state government led by Premier Campbell Newman made it easier for farmers to clear native vegetation if they wished to. The result was a surge in clearing which is so large that it is likely to wipe out all of the gains in carbon abatement from the Australian Government’s Direct Action program. Apparently, the positive attitude towards native vegetation that we identified amongst farmers in central Victoria does not apply uniformly across the country.

To be fair to the IPA, they aren’t the only ones to make less-than-completely-balanced use of our results. A Tweet from @ARC_CEED (which funded our research) said “Study @MaksymPolyakov @dpannell66 finds trees increase value of rural properties up to 25%”. That’s perfectly true, although the 25% result was an extreme case, and only relevant to very small properties.

Another of our conclusions that hasn’t been picked up in any of the commentary is that increasing the area of woody native vegetation on a property can actually decrease the property value if the area is too large (see the graph in PD#287). It’s interesting that both sides are more enthusiastic about the conclusion that trees can increase property values.

Further reading

Polyakov, M., Pannell, D.J., Pandit, R., Tapsuwan, S. and Park, G. (2015). Capitalized amenity value of native vegetation in a multifunctional rural landscape, American Journal of Agricultural Economics 97(1):299–314.  Journal web page  ♦ Ideas page