Activating markets to create incentives for improved soil management: Literature scoping study (2017-2018)

Funding

High Performance Soils CRC, $49,254

Researchers/Investigators

Professor Mark Morrison, (Project leader); Mr Sosheel Godfrey (CSU), Professor Eddie Oczkowski (CSU), Dr Alfred Wong (CSU),
Professor Mark Morrison (CSU), Professor Anthony Saliba (CSU), Dr Nick Pawsey (CSU), Dr Tahmid Nayeem (CSU), Dr Felicity Small (CSU), Professor Geoff Cockfield (University of Southern Queensland), Associate Professor Darla Hatton MacDonald (University of Tasmania), Dr Dugald Tinch (University of Tasmania), Dr Francisco Ascui (University of Tasmania), Associate Professor Frank Agbola (University of Newcastle), Dr Ben Wills (Federation University), Dr Simon Cook (Murdoch University)

Research Theme

Rural and regional communities

Description

The High Performance Soils CRC has four research programs, one of which is 1. Investing in high performance soils which this scoping study falls under.

Within current Australian socio-ecological systems, incentives for managing soil so as to improve its fertility and condition are limited. Appropriate inputs (fertilisers, conditioners etc.) and land management practices are generally expensive and while beneficial practice change can involve pay-offs well into the future there are can be short run opportunity costs such as through reduced production.  Current regulatory regimes for soil protection are limited in scope and enforcement and are likely to remain so.  Hence the interest in the operation and information flows of markets as potential sites for interventions that might improve soil management.

The aim of this project, undertaken in collaboration with researchers from University of Southern Queensland, University of Tasmania and University of Newcastle, was to provide an overview of the benefits of soil management and willingness to pay for, or indirectly support, farm-related practices.

It had four main components:

• An investigation of commodities and processed products with a focus on value chains up to the point of consumption. As part of this investigation, the researchers noted potential disincentives to good soil management including how payments/premiums are collected and returned to farmers to encourage appropriate practice change. This work included overviews of :
  • literature on attributes of products and benefits that may be related to soil management (taste, health provenance and ecosystem services);
  • willingness to pay for practices that provide such benefits
  • product labelling literature with respect to farm production, certification and health benefits
• A review of the hedonic pricing literature related to soil management practices and final selling price of agricultural land
• A review of the state of knowledge of what is known about how farm practices such as soil management influence the magnitude and volatility of farm income, and whether or not there is a precedent for including spoil management practices in determining interest rates and insurance premiums
• A review of policies and practices, implemented by governments, industry or producer groups that capture, for producers, monetary or other value from particular production practices.

The objective of the study was to scope out one or more potential projects in each of the areas under investigation i.e. product value chains, property markets, and finance and insurance markets.

The project held planning workshops in Bathurst and in Hobart and meetings with key industry stakeholders in NSW, VIC, SA, WA and QLD.

Outputs

Morrison M., Oczkowski E., Cockfield G., Hatton MacDonald D., Small F., Pawsey N., Nayeem T., Saliba A., Godfrey S., Wills B., Abdu N., Cook S., Tinch D., Agbola F., Wong A., Ascui F. (2018) Activating markets to create incentives for improved soil management literature scoping study. Final Project Report, Soil CRC

Project Fact Sheet: Activating markets to create incentives for improved soil management

Outcomes

For all three markets identified, it was apparent that there is a need to investigate soil management certification as an approach for communicating to market stakeholders. It was also evident that collectively, these three markets have the potential to produce a substantive signal to landholders, whereby they may be rewarded for completing good soil management practices. A further body of work remains to be completed by the Soil CRC, before these markets can be fully activated in this way.

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Contact

Professor Mark Morrison
email
CSU Bathurst

March 2019