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Adoption of agricultural management for Great Barrier Reef water quality improvement in heterogeneous farming communities

Author

Listed:
  • van Grieken, M.E.
  • Roebeling, P.C.
  • Bohnet, I.C.
  • Whitten, S.M.
  • Webster, A.J.
  • Poggio, M.
  • Pannell, D.

Abstract

There is growing recognition that coastal water quality is interdependent with agricultural management in coastal catchments. Economic-incentive-based instruments can be used to internalize the negative externalities from coastal water pollution. Bio-physical and socio-economic heterogeneity across farms is expected to be an important factor in explaining differing rates of adoption of management practices. This paper hypothesises that: i) different types of farmers are likely to respond differently to incentive payments that promote the adoption of management practices for Great Barrier Reef water quality improvement, and ii) if policy makers account for heterogeneity, cost-effectiveness of incentive payments will increase. Results show that if government paid farmers 100% of the transition costs of moving from their current practices to improved practices, and given current technologies, water quality improvement for the case-study region would be approximately 56% (measured as a reduction of dissolved organic nitrogen at the end of river). Total costs for the region would be almost AU$ 30 M over the planning horizon of one cropping cycle of 6 years. Results furthermore show that as the policy seeks more ambitious land-use changes, from common practice to improved practice to aspirational practice, the public cost of incentive payments increase at an exponential rate. Larger farms make the shift sooner as they are able to offset fixed investments against increased revenues over greater areas.

Suggested Citation

  • van Grieken, M.E. & Roebeling, P.C. & Bohnet, I.C. & Whitten, S.M. & Webster, A.J. & Poggio, M. & Pannell, D., 2019. "Adoption of agricultural management for Great Barrier Reef water quality improvement in heterogeneous farming communities," Agricultural Systems, Elsevier, vol. 170(C), pages 1-8.
  • Handle: RePEc:eee:agisys:v:170:y:2019:i:c:p:1-8
    DOI: 10.1016/j.agsy.2018.12.003
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    References listed on IDEAS

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    1. Clara Villegas-Palacio & Jessica Coria, 2010. "On the interaction between imperfect compliance and technology adoption: taxes versus tradable emissions permits," Journal of Regulatory Economics, Springer, vol. 38(3), pages 274-291, December.
    2. Pannell, David J. & Wilkinson, Roger, 2009. "Policy mechanism choice for environmental management by non-commercial "lifestyle" rural landholders," Ecological Economics, Elsevier, vol. 68(10), pages 2679-2687, August.
    3. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    4. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    5. Roberts, Anna M. & Pannell, David J. & Doole, Graeme & Vigiak, Olga, 2012. "Agricultural land management strategies to reduce phosphorus loads in the Gippsland Lakes, Australia," Agricultural Systems, Elsevier, vol. 106(1), pages 11-22.
    6. Argyris Kanellopoulos & Paul Berentsen & Thomas Heckelei & Martin Van Ittersum & Alfons Oude Lansink, 2010. "Assessing the Forecasting Performance of a Generic Bio‐Economic Farm Model Calibrated With Two Different PMP Variants," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 274-294, June.
    7. David J. Pannell, 2008. "Public Benefits, Private Benefits, and Policy Mechanism Choice for Land-Use Change for Environmental Benefits," Land Economics, University of Wisconsin Press, vol. 84(2), pages 225-240.
    8. Janssen, Sander & van Ittersum, Martin K., 2007. "Assessing farm innovations and responses to policies: A review of bio-economic farm models," Agricultural Systems, Elsevier, vol. 94(3), pages 622-636, June.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 327 – Heterogeneity of farmers
      by David Pannell in Pannell Discussions on 2019-09-30 15:18:22

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