Who Pays to Protect Native Vegetation? Costs to Farmers in Moree Plains Shire, New South Wales

Abstract

The Native Vegetation Conservation Act was introduced on January 1st 1998 to limit the clearing of native grassland and woodland in NSW. The Act has limited clearing and development to crops, has protected biodiversity, and may have enhanced soil and water conservation. But this analysis of the prices paid for land in Moree Plains Shire shows that the Act has reduced land values by some 21 per cent and has already reduced annual incomes by 10 per cent across the whole Shire. This reduction in annual incomes may well reach 18 per cent by 2005. This decrease in income means that farm households in the Shire currently must give up 15.6 per cent of their household income because they must protect native vegetation on their farms. In contrast, urban households in Australia must give up only 0.55 per cent of one per cent of their income through taxes for the same purpose. The Act has imposed these costs on farmers who are already struggling financially, has made the distribution of income in the community less equal, and has made farm families bear far higher costs than urban families. Do these outcomes enhance an objective of equity, or fairness within the community?native vegetation, opportunity costs, land values, Environmental Economics and Policy, Farm Management, Land Economics/Use,