Evaluating the economic impact of an NRM program

For 30 years, Landcare has worked to improve the productivity and sustainability of Australian agriculture through sustainable land use practices. The spread of these practices has had flow-on benefits for local economies, but is often not quantified.

With Advanced Choice Economics, Michelle worked as part of the Natural Decisions team to quantify the economic benefits of activities completed with funding from the Australian Government’s National Landcare Programme.

A key element of the evaluation was developing a systems model that was applied to the Western Australian wheat belt, the cotton industry in New South Wales and Queensland and the dairy industry in Gippsland.

The model developed by the team was able to quantify the key on-farm economic benefits like improved yields and production, increased income from the farm and reduced costs. Benefits to rural communities were estimated and included increased sales from rural suppliers and increased employment through the use of contractors.

Key findings from the report include

  • A review of literature showed that investment in Landcare has changed the mindset of landholders to be more environmentally conscious and engender a stewardship ethic. It has increased participation in sustainable agricultural and environmental activities.
  • The literature review also suggests that Landcare has had significant national influence and impacts through sponsorship (on-ground projects and other sustainability initiatives) largely resulting from the value of the Landcare brand and has influenced activities in a number of countries.
  • In excess of $1 billion direct economic market value was estimated in three case study industries, over 90% of which was estimated to go directly to landholders. Higher overall national economic impact would be estimated as the regions studied were only a sliver of Australian agriculture.
  • Additional economic value would be expected if the study were expanded to selected practices covering the three agricultural industries across Australia, other Landcare practices relevant to the industries, additional monetised economic benefits related to the Landcare practices, other industries (e.g. other grazing industries, sugarcane etc.), and non-market valuation of the associated social and environmental benefits. Social and environmental benefits provide additional unmeasured value that was not possible to estimate in this study.
  • Continued investment in Landcare along with independent evaluation of practice adoption, as is occurring in the cotton and dairy industries might be able to be used to brand Australian agriculture and improve global competitiveness, but was not done as part of this study.
  • The systems model developed to quantify the economic benefits in this study is simple and transparent, and provides a powerful basis for further work.

Read more about this project or download the full report from the Australian Government’s website.

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