Over past two decades catchment plans have been developed for many catchments across the country. Despite setting catchment objectives to be achieved over decades, these plans have generally been based upon an assumption of an unchanging economic and social structure in the catchment. In response to the incremental change achieved under the current generation of catchment plans, landscape change has been proposed as a requirement for catchment protection. The structural change implied by landscape change has generally been overlooked or underplayed in the debate over landscape change.
This report seeks to inform both sides of this debate by describing the changes that have occurred in farming communities during the period 1986 to 1996, and exploring potential changes that may occur in the next 20 years. The study draws mainly on data from the Australian Bureau of Statistics Population and Housing Census and Australian Agricultural Census.
In 1996 agriculture was the dominant land use of Australian land. The Bureau of Rural Science land use map shows agriculture in its various forms occupying 60.9 per cent of Australia. Changes in the use of land will necessarily involve changes to the structure of agriculture. Estimates of the number of farm establishments vary according to the definition of farm one uses. In 1986 there were 128,783 farm establishments which earned more than $5,000 gross value of production. In the same year 250,858 persons described farming as their main occupation. There were 129,358 farm families. These farmers comprised 3.4 per cent of the Australian workforce.
Australian agriculture is characterised by a large number of small farms and a small number of large farms. In 1986 the median gross farm establishment income was estimated at $94,000 (using 1996 dollars and farms with at least $5,000 gross income). The financially smallest 50% (incomes lower than $94,000) produced approximately 10 per cent of total agricultural value of production. The financially largest 10 per cent of farms (incomes greater than $400,000) produced between 40 per cent and 50 per cent of gross value of Australian agricultural output. These larger farms managed over 60 per cent of Australian agricultural land, over a third of the total land area of Australia.
Farm businesses must keep pace with an overall long-term decline in agricultural terms of trade. Farmers generally achieve this by increasing productivity or by taking off farm work. Productivity increases often are achieved by adopting improved technology and increasing farm size. The counter-point to increasing farm size is the exit of some farm businesses from agriculture. Between 1986 and 1996 exits from agriculture were greatest during periods of higher commodity prices. Higher land values provided a greater incentive to sell farms. During low commodity price periods this incentive was greatly reduced. Entry to farming was less influenced by commodity prices. Entry was more likely to occur in more attractive locations or in irrigation areas. Entry to farming was far less likely in traditional broadacre cropping regions. This in part reflects the lower perceived amenity and the higher capital barriers to entry.
A constant throughout this period was an underlying trend of a loss of younger persons from agriculture. Given the observations of skewed distribution of Australian farm sizes, the low recruitment of younger persons to agriculture may be a reflection of major adjustment decisions being delayed to the inter-generational transfer period.
During this same period there was a significant increase in the dependence of many farm families on off farm income, particularly those operating smaller farms. This may in part explain the finding of that average farm family incomes in Australia were remarkably similar to family incomes of the country as a whole. This is not to argue that we should not be concerned at low incomes amongst Australian farm families, but rather that we should be no more or less worried about this than about low incomes across Australia as a whole. During 1986 to 1996 there were some areas of significant low income amongst farm families. These areas were not necessarily those with smallest farms, but were more often those areas with small to medium sized farms and lesser access to off farm employment.
The net result of these adjustment decisions has been an 18 per cent decline in farm establishment numbers between 1986 and 1996. There was a 16 per cent decline in the number of farm families and a 21 per cent decline in the number of farmers over the same decade. Establishment decline was greatest amongst the middle sized farms ( those with gross farm incomes between $50,000 and $200,000). Operators on farms with smaller gross farm incomes were often under less pressure to adjust because of their greater dependence upon off-farm income. Farm adjustment seemed to be related to remoteness. There were generally greater farmer population movements in more remote locations and in irrigation areas.
A second outcome of the adjustment decisions of Australian farmers has been an apparent ageing of the farm population between 1986 and 1996. The ageing is an outcome of both a lower recruitment of younger persons to agriculture and a greater movement towards off-farm income dependence amongst younger farm based families.
In the report we have projected two demographic futures for Australian farming. In one we have modeled a 30 per cent decline in farmer number to 2020 and a further increase in median farmer age, peaking in 2011. This scenario is based upon the behaviour of farmers during periods of poor commodity prices. An alternative faster adjustment scenario is based upon behaviour during periods of higher commodity prices. In this scenario, our model suggests a 55 decline in farmer numbers with little increase in current median age.
These projections present a picture of a rapidly changing agricultural community. Other factors which we are not able to model suggest the rate of change may be even greater than in these scenarios. Some of these additional factors include:
- Accelerating urbanisation of the Australian population, leading to increasing amenity competition for land use in less remote locations.
- Increased urbanisation of the life aspirations of rural youth.
- A decline in the cultural relevance of the farming as lifestyle identity.
- Changing female expectations of marriage relationships.
- Ageing and retirement of the baby boomer population cohort reducing market labour supply and providing greater employment opportunities for rural youth beyond farming,
In planning for catchments need to be aware that some landscapes are on a trajectory out of traditional agriculture. Catchment management will be less likely to mean sustainable agriculture in these areas than sustainable landscape management. Structural changes in the social landscape may offer opportunities for landscape change that are complementary to current trends of structural change. Catchment planners need to be aware of the continuing social and economic changes in the structure of their catchments. To this end, the report ends with recommendations for some changes to national data collections that would greatly increase our capacity to monitor structural change within farm communities.
The incremental model of catchment management
In the last decade communities and government have jointly developed catchment management plans for many of the catchments of Australia. For other catchments, planning is proceeding towards producing similar plans before the end of the Natural Heritage Trust. These catchment plans are nearly all based upon a number of crucial assumptions. Among these assumptions are:
- large areas of catchments are managed as commercial farms and will remain managed as such into the foreseeable future;
- sustainable farming practices are also the most profitable in both short and long terms; and
- that farm businesses and farmers have the capacity to implement changes in land management which will achieve a more sustainable agriculture
- the adoption of best management practices by farm businesses can generally be self funding;
- Government can be most effective by playing a catalyst role, particularly through support for the landcare group movement.
These assumptions could be described as the incremental model of catchment change. If these assumptions are true, they justify catchment planners and governments basing natural resource management policy upon the tools of moral suasion and the devotion of resources to extension, facilitation and minor incentives for landholders to change practices. And at the conclusion of the successful implementation of such a policy regime, the implication is that the structure of rural regions that have achieved a more sustainable form of agriculture will be little different from the structure of the present.
The landscape change paradigm of catchment management
Many of the assumptions of the incremental model of catchment management have been questioned in recent studies.
- Major landscape change may be required to achieve watertable balance and this may imply massive structural change (ABARE 2000a; Bryden 2000; Gale 2000a; Harrington & O'Donaghue 1998).
- There is a limited surplus available from Australian agriculture, and this surplus is unlikely to generate sufficient funds to generate the extent of land use change which may be desirable in the long term (ABARE 2000a; Barr et al. 2000; Barr & Cary 2000; Barr & Ridges 1998).
- Sustainable land use practices are not necessarily the most profitable available to farmers (Barr & Cary 2000; Bathgate & Pannell 2000; Cary 1986; Walker, Gilfedder, & Williams 1999).
- Landcare groups may not be the most effective vehicle for facilitating major land use change (Campbell 1995; Cary & Webb 2001; Curtis & De Lacy 1995; Martin & Woodhill 1995; Shrapnel, Davie, & Frank 1997). These questions of the prevailing paradigm of rural land use change raise further questions of for the direction of natural resource policy.
- What is the potential for agriculture to restructure itself in a manner that will increase the available agricultural surplus? Is it likely that the dominance of small farms over a significant proportion of some rural landscapes is likely to change as agricultural businesses consolidate their holdings, leading to a smaller number of larger and more profitable farm businesses across the landscape? This potential process of consolidation has been an objective of Australian agricultural policy for some decades, but progress has been limited (Barratt 1997; McColl, Donald, & Shearer 1997; Synapse Agricultural Consulting 1992).
- Will the structural changes occurring now and likely to occur in the next two decades reduce or increase the capacity of landholders and the wider community to improve the sustainability of land use? Many of the cost-benefit analysis used to evaluate catchment plans assume the continuance of the current patterns of agricultural industries over a 25-year period or greater. As a consequence, catchment plan strategies may reflect past catchment community and industry structures rather than future, or even present structures.
The answers to these questions have may have implications for the development of catchment plans and for the development of public policy in natural resource management. Will changes in the structure of rural communities require government to change their mix of policy tools? Will catchment planners need to adjust catchment plans in response to the adjustment that is occurring or might occur in the future?
This study documents past and current adjustment trends within Australia's rural industries, and models scenarios for future adjustment trends. The work described in this report needs to be read in conjunction with the report or project 6.2.2 (Human and Social Aspects of Capacity to Change to Sustainable Management Practices). Project 6.2.2 considers the relationship between agricultural community structures and the capacity and willingness to implement improved natural resource management. Both projects will be used to better understand the implications of current and future structural change in agriculture for natural resource management policy in the rural landscape.
Components of the assessment
This report is constructed in five sections:
- Background information on the data sources and definitions used in the project.
- The structure of agricultural communities as they were in 1986. This section describes the importance of agriculture to local employment and the relative domination of commercial agriculture in the landscape, the distribution of farm sizes and the distribution of farm family incomes. This choice of indicators is based upon the availability of data and upon the assumption that farm size and farm family income are indicators of the capacity to invest in natural resource management.
- A classification of Australian rural regions based upon their agricultural structure. This section summaries the diversity of agricultural Australia using data explored in the previous section and in Agriculture Theme of the National Land and water Resources Audit. The classification simplifies the complexity of the data and allows a more powerful exploration of farmers' adjustment behaviours and the consequences of these behaviours.
- An exploration of some of the major structural adjustment decisions made by Australian farmers in the period 1986-1996. This exploration only considers the most basic of major adjustment decisions: decisions to leave or enter farming and changes in commitment to off-farm work. This section then explores the impact of these decisions upon the number of farmers, farm families, farm establishments and the demographic structure of the farm community. Some of the most obvious implications of these changes are explored.
- Modelling and exploration of the potential changes in the demographic structure of Australian agriculture over the next 20 years. The basis for this exploration is a model of structural change based upon the behaviour of Australian farm families over the period 1986-96. While the model indicates the potential for a significant decline in the number of farmers in Australian agriculture, it also demonstrates the potential for the continued ageing of the Australian farm population. The report also explores some of the major factors which might render these projections invalid. These factors include some potentially major shifts in the social structures and aspirations of the wider Australian community. The report argues that significant areas of our rural landscape will become increasingly decoupled from agriculture and that this decoupling has some significant implications for catchment planning. Policies to catalyse changed land use which are based upon assumptions of a landscape committed to profit-driven agriculture will become increasingly inappropriate. Other parts of the rural landscape may see an accelerating depopulation. This may open up possibilities for more radical land-use change.
This report is accompanied by a significant appendix document which allows the reader to explore the regional variation in indicators at a finer scale than in the main report. Indicator data created for this report is also available from the National Land and Water Resources Audit web site.
- "Background to the assessment of structural adjustment in agriculture"
- Report references
- "Structural change in Australian agriculture: implications for natural resource management" by Neil Barr (PDF - 1.8 MB)
- "Structural change in Australian agriculture: implications for natural resource management - APPENDICES" by Neil Barr (PDF - 4.3 MB)
- "Framework and Review of Capacity and Motivation for Change to Sustainable Management Practices" by D. Mark Fenton, Colin MacGregor and John Cary (PDF - 410 KB)
- "Social Atlas for sustainable management - a social and economic database" by John Cary, Shannon Kelson and Heather Aslin. (MS Word 302 KB)
- *"Human and social aspects capacity to change to sustainable management practices" by John Cary, Neil Barr, Heather Aslin, Trevor Webb and Shannon Kelson (PDF - 707 KB)
* This report does not contain maps and therefore needs to be read in conjunction with:
- The report on "Structural change in Australian agriculture: implications for natural resource management" by Neil Barr (download option above)
- The report on "Structural change in Australian agriculture: implications for natural resource management - APPENDICES" by Neil Barr (download option above)
- Image files for the "Social Atlas for sustainable management - a social and economic database" report by John Cary, Shannon Kelson and Heather Aslin (Zip - 7.8 MB)
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