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Bridle & Bonney (2010) Social Alternatives Vol 29-3 Food For Thought - The Impact of Demand-Driven Value Chains On Bio-Diversity

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Bridle & Bonney (2010) Social Alternatives Vol 29-3 Food For Thought - The Impact of Demand-Driven Value Chains On Bio-Diversity

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Food For Thought: Biodiversity management

on farms - links to demand-driven


value chains
Kerry Bridle and Laurie Bonney
Traditionally agricultural production in western countries has been driven by commodity markets,
where farmers are price-takers, dependent on market demands. Agricultural intensification
combined with the globalisation of markets and declining terms of trade for many farmers have
all impacted on farm land management decisions, which in turn had impacts on biodiversity.
Globally the production of food and fibre has had detrimental impacts on the environment. Native
vegetation clearance and the intensification of agricultural land management in Australia have
adversely affected native biodiversity. The pressure on farmers to produce low-cost commodities
has a biodiversity cost, one that is driven ultimately by internal and external factors, including
consumer demands. This paper discusses the known and potential impacts of food and fibre
production on biodiversity, and the consequences of consumer demand for quality, low cost produce.

Introduction affecting farm management decisions;


c) Discuss how a combination of market forces
T he development of agriculture has been a significant including consumer behaviour and farm management
decisions impact on biodiversity; and,
factor in deterioration of Australia’s biodiversity and
continued degradation of the landscape (Beeton et al. d) Discuss alternative approaches that may enhance
2006). This outcome has received greater attention in biodiversity management on farms.
recent decades as western consumers have become
Defining biodiversity
more environmentally aware (Hartman and Wright
Biodiversity has been defined as ‘the variety of life, its
1999, Toyne et al. 2004) and Australian farmers have
composition, structure and function at a range of scales’
become increasingly concerned about salinity (van
(Freudenberger and Harvey 2003). Personal definitions
Bueren and Price 2004) and soil erosion (Conacher
of biodiversity are value-laden and are strongly
and Conacher 2000). These concerns prompted the
correlated with contextual/cultural values (Dettman et
formation of farmer-centric environmental programs
al. 2000, Williams and Cary 2001). Popular images of
funded by the Australian Government through groups
biodiversity include natural or semi-natural systems
such as Landcare (Campbell 1994), the Natural
such as rainforests or coral reefs, images that dominate
Heritage Trust (Bardsley et al. 2002) and alliances with
the media (Dettman et al. 2000). Less common are
agricultural research and development corporations
images of soil micro-organisms or the abundance
(RDCs) (Price 2009).
of beetles in a pasture. Terrestrial biodiversity in an
Consumers have contributed to change in environmental Australian farming context is commonly represented by
land management directly through political pressure woody vegetation and birds (Williams and Cary 2001,
and indirectly through taxation (Beeton et al. 2006). Bridle & Price 2009).
However, we propose that many Australian consumers
have limited understanding of their influence on In the European Union (EU), environmental policies
biodiversity outcomes as a result of their demand for reflect the multifunctionality of agricultural landscapes
food and fibre. This is reflected in commonly perceived for production, biodiversity conservation and aesthetic
images of ‘biodiversity’ (see discussion below). In this values (Bennett et al. 2004). By contrast, Australian
paper we will provide an overview of links between policy makers have generally focused on a subset of the
consumer demands, land management practices and agricultural landscape, patches of native vegetation, for
biodiversity outcomes at paddock, farm and landscape on-farm biodiversity conservation actions (Dettman et
scales. We will: al. 2000). However, as is the case in Europe, native
biodiversity can be found across all land use types
a) Define biodiversity and provide examples of commonly associated with farming, and at a range of
biodiversity in agricultural landscapes; scales, from paddock to landscape/catchment scale
b) Provide an overview of the external drivers

Social Alternatives Vol.29 No.3, 2010 31


Examples of Biodiversity within Agricultural Landscapes et al. 2003, Cole et al. 2005, Wretenberg et al. 2010).
– Paddock and Farm Scale Australian ecologists have proposed thresholds for
the retention of native vegetation to maintain native
Every day land management decisions impact on populations. McIntyre et al. (2000) proposed that
biodiversity. However, these impacts may not be no more than 30% of the SE Queensland grassy
immediately apparent. For example, recent RDC woodland landscape should be under intensive
initiatives, focusing on soil health, have promoted shifts agriculture (cropping and sown pastures), while at
in crop preparation techniques from conventional tillage least 30% should be under native woody vegetation
to minimum tillage, to enhance the retention of soil cover. Similarly, Radford et al. (2005) recommended
carbon. A biodiversity benefit of minimum tillage is an the retention of at least 10% native vegetation in the
increase in soil faunal activity and diversity (Longstaff landscape to maintain bird species diversity.
et al. 1999), which is likely to contribute to a further
increase in production. In highly fragmented environments, the addition of woody
species provides habitat for mobile species such as birds
RDCs have funded extensive research on grazing
and bats (Law and Chidel 2006) as well as production
management in Australian native and sown pastures
benefits. Oil mallee plantations in the Western Australian
with an aim to influence production and environmental
wheat-belt have been shown to provide habitat for birds
outcomes. The traditional approach of continuous
(Smith 2009) and small mammals (Short et al. 2009),
grazing has been shown to be detrimental to long-
while saltbush plantings have been used extensively
term pasture management and to livestock production
in southern Australia to reclaim production value in
(Lodge et al. 2003). At a landscape scale, Leonard and
saline lands. The ‘win-win’ benefits of saltbush plantings
Kirkpatrick (2004) demonstrated that resting native
include the provision of alternative fodder sources for
pastures at different times of the year results in different
livestock and diversification of habitat for native fauna
species mixes within the pastures. Periodic resting of
(Seddon et al. 2009).
pastures at critical times (during flowering and seed set)
may increase the perenniality of the pasture base, while
External drivers affecting farm management
overgrazing results in a decrease in vegetation cover
decisions
and increased soil erosion (Greenwood and McKenzie,
Farming is a socio-cultural practice (Vanclay 2004)
2001).
that is increasingly subject to the influence of events
and attitudes in Australian society. While many farmers
Vegetation structure and pasture inputs influence
express a desire to maintain the natural resource base
invertebrate populations which may have beneficial
that they rely on to make a living (see Table 1-page 33),
effects on agricultural production. The re-introduction of
their farm management decisions are also influenced by
native grass tussocks to provide habitat for predatory
their exposure to external factors, and their perception
invertebrates was an important outcome of an integrated
of what is a public or a private good. For example
pest management (IPM) project in Victoria, where
Dickinson (2008) decided to log an area of native forest
farmers aimed to reduce reliance on costly pesticides
of low conservation value (considered to be of little
by utilising the naturally occurring predators to prey on
public benefit) on his property, across the whole farm.
crop and pasture pests (Nicholson 2008).
The transformation from native forest to plantation
Landscape effects on biodiversity – the farming context timber provided wider private and public benefits such as
riparian fencing and enhanced water quality, in addition
Approaches to biodiversity conservation on Australian to greater economic returns on farm.
farms generally follow the pattern of retain, repair,
recreate. Many programs have targeted the fencing of Farming – Interactions with sustainable practices
‘remnant’ vegetation on farms as a means of retaining
Foskey (2005) identified four aspects of farm life that
local biodiversity, using a combination of stewardship
interact to influence decision making - farm work as a
payments and the prospect of production gains (shelter
central component of identity, the farm as home, the
for stock, clean water) to facilitate participation. This
psychological attachment to the farm as a valued place,
focus on protecting remnant native vegetation patches
and the farm as a business and source of income.
retains existing ecological assets and is likely to promote
the greatest (native) diversity for the farm (Bridle et al.
2009). Over the past 60 years, increased mechanisation, a
reliance on chemicals to promote growth and control
The proportion of cropping to pasture to native pests and diseases, and rapidly evolving techniques for
vegetation, and the size, shape and connectivity of genetically modifying plants have all become features
native vegetation patches may impact significantly on of the conventional agricultural landscape in western
the abundance and composition of many taxa (Weibull countries. There are also continuing trends towards

32 Social Alternatives Vol. 29 No.3, 2010


No money to Major risk to
Degradation Farm for long Would leave
State Population Sample address change the
key concern term productivity industry
degradation way I farm
(farms) (farms) (%) (%) (%) (%) (%)
Australia 35990 604 60 24 82 14 27
NSW 9332 136 58 18 92 14 34
QLD 4779 83 49 33 81 14 31
SA 3128 89 60 32 90 6 27
TAS 1705 85 50 32 84 21 39
VIC 15011 152 61 21 75 15 22
WA 2035 59 83 33 76 11 20

Table 1 Land degradation statistics across the high rainfall zone for broad acre and dairy farms.Souce ABARE Resource Management Survey
Database 2001-2002 http://www.abare.gov.au/ame/lrm2/lrmalt.asp, accessed 21/01/10

large-scale enterprises, lower margins and reduced Concentration of retail power


labour inputs to increase financial efficiency (Productivity
Global hyper-competition on price, low margins on agri-
Commission 2005). However, whilst there is an
food products and the removal of restraints on trade have
association between scale and profitability, most farm
contributed to the development of large, multi-national
operations are still relatively small and have low gross
retailers. Australia is now the most concentrated market
incomes (Australian Bureau of Statistics 2007). Fenton
in the world with two major supermarkets having, in
et al. (2000) and Cary et al. (2001) concluded that the
broad terms, about 55-60% of the total agri-food market,
implementation of sustainable practices was influenced
although individual categories may be much higher.
by gross farm income, debt levels, farm diversification,
This market is price-focused whilst still demanding
farm size and farm ownership. Beal (1997) directly linked
broad extrinsic and intrinsic value attributes (Australian
the general decline in the agricultural terms of trade
Competition and Consumer Commission 2008, Spencer
since the 1950s, reduced producer margins and lower
2004).
net income to the degradation of the land resource base,
as farmers sought to maintain minimum net incomes and Unprecedented power is placed in the hands of a few,
standards of living. Ultimately, the homogenisation of often multinational companies. Their capacity to exert
landscapes that generally accompanied these financial that power, and their access to time, resources and
trends has had significant effects on biodiversity. expertise, far exceeds that of individual farmers, farmer
cooperatives or even the agri-political associations that
Rise of consumer and investor power
represent them. This power can either be expressed
The globalisation of agricultural and food markets and the for the benefit of everyone in the chain, including the
liberalisation of world trade is creating a new competitive consumer, or for self-interest (Cox 2001; Tallontire and
environment for primary producers, food manufacturers Vorley 2005). Ultimately, however, these companies will
and retailers (Kotzab et al. 2009). The supplier only prosper by delivering the value that consumers
dominance of the past has given way to retail control of demand (Stephens 2006). Retailers (and the value
the agri-food value chain and subsequent influence on chains that supply them) will only have the capacity
consumer choice. In place of simply supplying produce and the reason to focus on the product attributes that
and competition based on price, supermarkets are now positively impact on biodiversity if consumers are willing
working on the development of product value (including to pay for them.
non-utilitarian values such as ecologically and socially
responsible production) for which consumers will ideally Commodity production vs. innovation – potential impacts
pay a premium (Wright and Lund 2003, Feller et al. on biodiversity
2006). The creation of this value is innovation-driven and The majority of farmers produce undifferentiated
often requires substantial resources and collaboration commodities for large national or global markets. This
to succeed (Bonney et al. 2007, Gulati et al. 2005). has significant implications for both the farm business
This approach aims to translate consumer demand for and biodiversity. The production of commodities is a
premium value attributes into higher prices that may be choice to compete on price and to commit to innovation
transferred through the chain to the producer of the raw that achieves scale and efficiency (Albers et al. 2003).
materials (Smith 2006). However, despite expressed Farmers are then ‘price-takers’ because their products
intentions to support non-utalitarian values, consumers are no different from similar products produced
are largely price-oriented in their actual behaviour, i.e. anywhere else: the competition is a race to be the
these values have yet to translate into a premium price least-cost competitor (Clay et al. 2005). In this case
for farmers. business strategies aim to achieve scale and efficiency

Social Alternatives Vol.29 No.3, 2010 33


which frequently leads to large-scale production, with unknown consequences for land management
mechanisation, monocultures and intensified use of the and biodiversity. However, it also provides farmers
landscape. with opportunities re-assess their approach to farming,
and choices about how to create value to achieve a
This reduction in crop diversity and increased more sustainable competitive advantage and exercise
intensification has resulted in an overall reduction in stewardship of the land for the future (Merrilees and
biodiversity, particularly at the farm and paddock scale. Miller 2001).
In both Europe and Australia, increased agricultural
intensification has been linked to a decline in bird species Value-adding - trialing innovative approaches:
richness (Donald et al. 2006, Bridle et al. 2009), while Responses from consumers
increased nutrient inputs across crops and pastures
Local food movement
has been linked to a decline in plant species richness
(Dorrough and Scroggie 2008, Kleijn et al. 2009). Increasing competition in international markets has
However, at a farm scale, intensification of part of the led local producers to call for country-of-origin labeling
farm may result in a biodiversity gain through the process on produce so that consumers can make an informed
of setting-aside unproductive areas for conservation choice to support local farmers. In 2005, the Tasmanian
purposes (Wretenberg et al. 2010). This potential gain ‘Fair Dinkum’ food campaign called for label of origin
would depend on the landscape context, the degree of on all processed vegetables. Farmers argued that label
fragmentation and management of native vegetation on of origin would allow consumers to choose between
and surrounding the farm (Radford and Bennett 2007). supporting Australian produce and buying imported
goods.
The alternative to commodity production is to find
new business models based on innovation to provide In response, an advisor to the Tasmanian State
product differentiation and a more sustainable form of Government at the time noted that when he:
competitive advantage. If primary producers choose to
move into innovative, high value, niche markets then …looked at the vegetable-growing industry
they need new, flexible business models, new ways of in Tasmania in 1995, one of the most
working and a new set of skills (Fisher 1997). That choice obvious problems it needed to address
also has significant implications for the sustainability of immediately was that farms were small and
the farming business and the approach to managing therefore economies of scale could not be
biodiversity. sustained. Today this issue remains largely
untouched. Where it takes 450 Tasmanian
Barriers to innovation farms to produce 80,000 tonnes of potatoes,
13 New Zealand farms can produce the
Many farmers admit that it is difficult to change practices
same amount.’ (Greg Barns reported in The
on farm to deal with environmental degradation. For
Age, July 19th 2005).
example, they may not have the financial resources
to address environmental problems (Table 1). Social The efficiency of New Zealand farmers may be related
networks, media and access to agricultural extension to lower input costs (irrigation), paddock and farm size
staff provide much of the background knowledge farmers and organisation of the farm business (corporate versus
use to make decisions (Pannell et al. 2006, Vanclay family farms). It is not known what the environmental or
2004). The process of choosing to maintain the status biodiversity impact of off-shore investment in agricultural
quo or to change is complex and is influenced by factors production would be, and importantly, do consumers
such as farmers’ age, education, role models, societal care?
ageism, independent attitudes, commodity and land
prices, and personal economic circumstances Foskey Many farmers believe that the issue of Australian
(2005). or regional provenance believe will confer premium
prices on their commodities. However, the issue is not
The increase in global sourcing by supermarkets may well understood (Fearne et al. 2008) and is one that is
constitute a threat to Australia’s long-term food security difficult to research because of the differences between
(Foskey 2005). Imports in the food, grocery and stated consumer intention and their actual purchasing
beverage sector have increased 40% in the last five behaviour. Food is a low engagement purchase (except
years (Australian Food and Grocery Council, KPMG for gourmet lines and wine). Generally, most consumers
2009) almost negating the very significant food export would prefer to buy Australian or local products but they
performance (38% of manufacturing and 11% of all are not willing to pay a premium. They recognise that we
exports), and potentially outsourcing environmental live in a global market but there is little understanding of
degradation. This increase in imports reinforces the Australia’s lack of competitiveness in that arena.
pressures on farmers to compete in global markets

34 Social Alternatives Vol. 29 No.3, 2010


Niche markets Very little attention has been given to farming landscape
design in Australia, particularly the manipulation of
Selling direct to the consumer paddock boundaries for biodiversity gains (e.g. IPM
The growth of farmer’s markets in the UK (Dixon 2007) Nicolson 2008). In Australia a subset of ecosystem
and Australia (Lyons 2007) has created a niche market services deemed ‘duty of care’ is seen to be the
for local producers, selling to informed consumers. The responsibility of the land manager, covering issues
growth of such markets is in its infancy in Australia and such as the prevention of soil erosion, weeds and water
includes local initiatives such as brochures advertising quality. Recently, calls have been made for Australian
regional farm gate sales (e.g. Fruit Growers Tasmania Inc. policy to address multifunctional landscapes rather
2009). These markets provide a direct communication than focusing on the location and connectivity of native
link between producer and consumer that is generally vegetation patches (Maron and Fitzsimons 2007,
lacking in the traditional supply chain model. The long- Attwood et al. 2009). Adopting a broader ecological
term success of producer to consumer sales will rely services approach may be justified in highly fragmented
on this communication link, and the ability of farmers landscapes, particularly if production and biodiversity
to respond to the consumers’ needs. However, positive benefits are demonstrated (Seddon et al. 2009).
biodiversity outcomes are not guaranteed, but may
be more likely if ‘sustainability’ attributes are explicitly The Caring for Our Country Initiative has begun to
used in marketing and producers have a commitment to address broadscale environmental stewardship issues
product integrity. such as soil erosion (Commonwealth of Australia 2010).
However, it is likely that biodiversity conservation
Farmers markets, organic produce and direct farm- agreements will remain focused on native ecosystems,
to-consumer/retailer marketing or internet sales are particularly threatened species and communities.
unlikely to pose a major threat to conventional food
retailing, though organic lines are now more prevalent in Summary
supermarkets (Lockie et al. 2002). Stewardship payments by government are likely to be
the most successful mechanism in delivering change
Selling the environment to farming practices in the near future. However a
broad-based change in consumer behaviour is also
An initiative to provide a point of sale difference for required, using all components of the value chain to
‘clean, green’ wool produced on environmentally develop markets that recognise and reward sustainable
sustainable farms has been implemented in Tasmania. agricultural practices.
A collaborative effort involving research ecologists,
industry groups, research and development Large corporations dominate the marketplace, with many
corporations, state government employees and producers focusing on efficiency as a means to stay
interested farmers developed a system by which wool in business. Intensification of agricultural landscapes
could be accredited by an independent auditor and occurs at a cost to biodiversity. To date, ecosystem
marketed as environmentally sustainable (Kirkpatrick et services and biodiversity assets are not easily valued
al. 2007). Whether this accreditation system produces a or costed in the market place, and products that are
price premium for wool producers depends on enduring ‘biodiversity friendly’ are few and usually relate to a
consumer support. particular species, e.g. ‘dolphin-friendly’ tuna.

Buying the environment - increasing stewardship Alternative strategies that value-add to products rely
payments for biodiversity on information exchanges between producers and
consumers, and support given to the public good services
Consumers contribute to biodiversity on farms indirectly provided by producers. Consumers subsidise agriculture
through taxation, a small proportion of which is spent through environmental stewardship payments. The
on land stewardship payments. Such payments are Australian government spent $10.3 billion during 2001-
common in both the EU and the US, and are increasing 2005 on environmental problems (Beeton et al. 2006).
in Australia (Hajkowicz 2009). Australian models focus The environment subsidises production with markets
on components of the landscape (traditionally native accepting or ignoring land degradation and biodiversity
vegetation) while the EU model focuses on landscapes loss as a component of production. The concept of a
and ecosystem services. For example the retention of multi-functioning landscape is common in Europe
grassy field margins and hedgerows are a feature of and includes stewardship payments to maintain the
stewardship payments in the UK (Natural England 2010) social, cultural and aesthetic components of our rural
providing habitat heterogeneity across the agricultural landscapes in addition to delivering environmental
landscape. outcomes (Meerburg et al. 2009).

Social Alternatives Vol.29 No.3, 2010 35


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