Policy directions for agricultural land use in Australia and other post-industrial economies

Farming has been the basis to work, culture and social forces for millennia. It still dominates the lives of most of the world's poorer people, but in post-industrial western countries agriculture's contribution to national economies is now minor. Nevertheless, most OECD countries’ agricultural policies are aimed at maintaining the size of this sector even where this conflicts with its economic significance or adversely affects the environment. Australia has a first world economy, but a third world export profile, with 20% of its export value derived from agriculture. Although it is efficient in agricultural man-power, this sector consumes 70% of the water and 60% of the land resources of the continent to produce food for an estimated 55 million people. Agricultural policies maintain the productivity of the sector, but are ineffective in stemming the associated environmental degradation, biodiversity loss and rural population decline. As in other post-industrial societies, Australia needs to re-define what its agriculture sector represents, environmentally and socially. This will require greater reappraisal of property rights, public and private benefits and legal structures supporting both. More effective alternative policies are needed for large tracts of unproductive farmland where environmental and social decline are endemic. This paper explores alternative options that offer more balanced prospects in the face of current paradoxes, including paying farmers directly for stewardship services, providing better incentives for retiring non-productive areas from agricultural land use, and retiring watersheds, streamlines and other areas of essential environmental function from agricultural production for better biodiversity conservation.