Environmental red tape bogs down farmers
Australian Financial Review - AGRIBUSINESS- Special Report
Farmers are complaining about the costs and time involved with environmental compliance, reports Miriam Hechtman.
Concern for the environment has generated a host of new regulations for farmers, not to mention armies of bureaucrats to administer those regulations. And farmers are complaining bitterly about the costs and time involved in complying with all the rules, particularly for once simple acts such as digging a dam or opening up a new paddock. Although there is some agreement that certain regulations need to be in place, there is a lot of disagreement about how these regulations should be administered and by whom, as well as who is going to bear the financial burden of implementing the regulations.
But while this argument goes on, farmers, traditionally distrustful of officialdom, have become even more wary of government departments. “I think in some cases the sort of environmental works that we ask landholders to put in place are much more expensive and much more costly than people generally realise,” says David Pannell, a professor of the school of agricultural and resource economics at the University of Western Australia.
National Farmers Federation chief executive Ben Fargher says: “The mounting burden of regulation on farmers is an issue right across the board, including areas such as [occupational health and safety], fertiliser security, the environment, transport, labour and [industrial-relations] issues, farm chemicals, trade and food safety.” He says that the “NFF is pushing through a variety of channels for all levels of government to reduce the regulatory burden on farmers and give greater consideration of the impact on farmers and small business of any new regulations”.
Particularly in NSW, the relationship between the government agency, the NSW Department of Infrastructure, Planning and Natural Resources, and farmers has suffered, says David Thompson, a director at the Centre for Agricultural and Regional Economics. “What’s happened over the years is DIPNR staff have become more heavily involved in regulations as opposed to providing advice to farmers and actually working with farmers.” The good working relationship between both parties has broken down, he says. “Many farmers are very hesitant to let these people onto their farms. I think that’s a shame because there a lot of people in that department that are technically very skilled.
“Regulations is not the only instrument out there in the toolbox,” Thompson says. “What they should be looking at is new ways of farming, alternative ways of farming.” Government agencies “don’t have the time or the inclination to do the hard economic analysis” when working out possible solutions. “I think in many cases politics seems to override the economic considerations. They need to be seen to be doing something about these perceived environmental problems, so they put some regulation in place, or they put some program in place, and in many cases it’s shown that it’s not the best way to go.”
A spokesman for the DIPNR in NSW says that “a lot of red tape has been removed, allowing an on-ground focus to assist farmers achieve on-farm results”. According to the spokesman, “over the past few years, the development and implementation of major reforms to natural resource management in NSW, particularly management of native vegetation, has closely involved major stakeholders [farming and environmental interests] in all stages of the process”.
Andrew Monk, chief executive of the Biological Farmers of Australia the main body for organic farming says: “I think we sometimes get a bit caught up thinking we are over-regulated. I think the issue is sometimes more that regulations could be far more efficiently administered, with possibly less regulators rather than less regulation.” Monk suggests a one-stop shop “instead of having five different departments that you might be beholden to when you dig out a new dam or open a new block for grazing”. And, he says, “it would probably assist people in not making incorrect decisions”.
To the farmers that have complaints about regulations, Monk says get ready for more. “Go and look at Europe,” he says. “As a farming community, let’s work on how we can work together to avoid what’s happened in Europe, in terms of regulation, by working out more efficient ways that we can regulate ourselves as industry bodies to avoid actual government intervention and regulation and urban backlash, effectively convincing the urban population that, if anything, we are going forward, not backward. “It’s taken us 200 years to realise we’re in a drought-prone country,” says Monk. “That’s pretty slow, that’s pretty tardy. “I am not endorsing that either water or land clearing are currently being administered efficiently and effectively, but we should still keep working on more effective ways of regulating as we go forward because clearly otherwise those who do do the right thing are going to be disadvantaged by those who don’t.”
Mike Carroll, general manager of agribusiness at National Australia Bank, says: “Generally, costs escalate faster than the prices the farmers receive for their produce. That is driving consolidation and eroding the profitability of small farms. Increasing regulation is also a factor contributing to increasing costs.” He says it is easier for larger farms to abide by these regulations. “There are sort of two worlds out there. There’s a group of large, extremely very productive farmers that are growing strongly, and then there’s a group of smaller farmers who are struggling to keep up with the regulations.” He says that although returns from agriculture are looking quite healthy and there is a strong appreciation of rural property values, this is a reflection of the results from larger farmers.
A lot of the issues that farmers are voicing, he says, are common to all sorts of small business. Thompson says: “You have got to start from the premise that these guys are running a business. They bought a farm, they made an investment in a farm to run a business. “If these regulations are going to impose severe financial restrictions on landholders, then they’re going to be wanting compensation. That’s the bottom line.”
Green concerns
Farmers are more wary of government departments.
They disagree on how farm regulations are administered.
Relationships with government agencies are suffering.
Rising costs are eroding the profitability of small farms.
