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A number of improved farming activities (IFAs) have been proven to reduce the sediment and nutrient impact of sugarcane farming on the world heritage listed Great Barrier Reef (Australia). Some of ...

The direct private cost to landholders of participating in programs that result in improved farming activities (IFAs) is generally well understood. However, the private indirect or transaction costs, such as the cost of a landholder's time and the expense to learn about IFAs and apply for assistance to implement these changes on-farm, are not so well understood. Where these have been studied, they have been shown to be extensive. We assess the extent and causes of private transaction costs incurred by sugarcane growers participating in the Australian Government's Reef Rescue scheme which pays farmers to adopt environmentally beneficial farm management practices. Utilising a mail-out-mail-back survey of 110 growers, we found that the average total transaction cost per farm of participating in the program was AU$8389. The average total transaction costs per farm as a percentage of the average funding provided was 38 per cent. We also assessed which type of improved farming activity (soil, nutrient, pest or water management) generated the greatest transaction costs and how landholder characteristics such as bounded rationality, opportunism and social connection impacted on the extent of transaction costs.

Water quality improvements achieved through changes in agricultural land use and management practices can impose a number of trade-offs on communities. Impacts such as reduced regional productivity may, for example, threaten farm profitability as well as the viability of the whole agricultural value chain in the region. This paper expands on existing studies, by quantifying not only the private (farm-scale) but also the likely direct social (regional-scale) impacts of water quality improvement – thus informing policy by identifying potential social consequences of private actions required to achieve sustainable load targets. We use the Environmental Economic Spatial Investment Prioritization model to explore the medium to long term private and social impacts of land use and management practice change for water quality improvement. By incorporating these economic drivers of social change we avoid underestimating the impact to the region, which could have severe consequences for local communities and policy makers. For a case study of the sugarcane industry in the Tully–Murray catchment in the Wet Tropics of Queensland (Australia), results show that long term regional productivity losses associated with desired water quality improvement targets increase the risk of sugar mill closure. This impact would likely have severe social and economic flow-on effects, such as decreased regional agricultural income and increased regional underemployment. These detrimental regional economic effects of water quality improvement plans have not been accounted for in previous studies, which have therefore underestimated the potential direct social costs and decrease in community welfare associated with these plans.