Determining landowners' willingness to participate in offset markets

Abstract

Market-based instruments are increasingly being seen as an option for policy makers to obtain the environmental and economic outcomes that society demands. As the majority of Australia is controlled by private landowners it is imperative that these options continue to be developed. As part of this process it is necessary to seek a better understanding of the perceptions of farmers with regard to providing environmental services (ES) and the potential to integrate the production of these services within existing farming systems. Policy makers need to know what producers would be prepared to do and what they would need to be paid to produce environmental services. This study estimated farmers' willingness to be paid for environmental services and their attitudes to current policy. It considered the particular characteristics of farmers that affect their perceptions and willingness to be paid. Interviews conducted with 45 farmers in the Walgett Shire of western NSW found that to manage parcels of their land for conservation, they would need to be paid $25/ha for 'basic' grazing country. For country that farmers regard as special grazing country (e.g. riparian zone, unique topography, wildlife corridors, native flora and fauna populations), they would need to paid $53/ha. For cropping country, the cost would be $206/ha. This payment would require land to be contracted in-perpetuity and farmers would be responsible for the maintenance of environmental quality.