Green grass and muddy waters: how to encourage farmers to adopt sustainable land management practices

Abstract

The water quality of a stream reflects and is a measure of the health of the catchment. Agriculture is the dominant land use in New Zealand, and so it is not surprising that this industry has significant impacts on water quality. These impacts range from degraded water appearance, impoverished aquatic habitat, offended cultural values, to water which is unsuitable for human and even stock consumption. As catchment development increases, invertebrate and fish abundance and diversity declines, and water becomes suitable for fewer uses. Viewed as a system, farming involves applying a variety of inputs (such as clearance of vegetation, planting crops, and adding fertiliser) to on-site resources (eg. soil) to produce a variety of outputs (including agricultural and forest products). This invariably results in the production of residuals (such as the changed quantity and quality of runoff) which alter the on-site natural resources, and, when lost from the farm, may degrade the environment, especially the aquatic environment. The main task in minimising agricultural impacts on water quality is to encourage the farmers to manipulate those inputs over which they have control, such that the loss of residuals is minimised. Impacts can be reduced by selecting the most appropriate landuse for the site and circumstances; increasing input efficiencies; increasing the resistance of farming systems to losses of inputs and resources; and making greater use of field and landscape buffer zones. A variety of policy instruments is available to encourage farmers to adopt land management practices which minimise impacts on water quality. These instruments include standards, taxes, subsidies, transferable discharge permits, performance bonds, the purchase of interests in land, and voluntarism. The following criteria are developed to evaluate the instruments: information intensity; static efficiency; dynamic efficiency; ease of monitoring and enforcement; administrative costs; flexibility in the face of exogenous change; certainty; political acceptability; and the ability to encourage the development of an environmental ethic. None of the instruments satisfy all the criteria. Some instruments have fatal flaws which render them unsuitable for the control of agricultural non-point source pollution. For example, instruments which attempt to control discharge quality are practically impossible to monitor and enforce. Although taxes have theoretical benefits with respect to static and dynamic efficiency, these benefits are unlikely to be realised in practice. Taxes may have a limited role to encourage the selection of environmentally preferable production inputs. The purchase of interests in land is an expensive option for local authorities, and must be limited to the protection of high priority areas of land. Voluntarism can be effective in encouraging the adoption of appropriate land management practices, subject to some important constraints. It is clear that a mix of policy instruments is needed to encourage the adoption of sustainable land management practices. The thesis develops such a framework for the Piako catchment in the Waikato Region, one which is probably applicable to other areas. The policy framework is presented below.