Reassessing the Importance of Off-site Impacts for Dryland Salinity in Western Australia
David Pannell (University of WA), Don McFarlane (Water and Rivers Commission) and Ruhi Ferdowsian (Agriculture WA)
Dryland salinity is seen as a problem involving massive off-site impacts and therefore requiring coordinated action to ensure that land managers reduce those off-site impacts. Economists and policy makers are concerned about these off-site impacts, which they term "externalities"¸ because they can result in "market failure", meaning that those with the power to prevent the problem do not do so because they fail to consider the benefits that would accrue to others. We argue that, at least in Western Australia, off-site impacts are much less important than has been widely believed. If farmers were to factor in the potential off-site benefits of salinity treatments, the impact on farm management would be small. There are a number of factors contributing to this conclusion, both hydrological and socioeconomic.
1. Local aquifers
Groundwater aquifers vary widely in size, shape and geological structure. Some, which are loosely termed "regional aquifers", extend over large areas (tens of kilometres) and include multiple farms. On the other hand, "local aquifers" are structured such that the water that recharges within the catchment will discharge within the same farm (say, one to three kilometres between recharge and discharge). Having discharged, the water normally enters watercourses which are generally water-gaining streams and is of no further consequence for salinisation of land. Local aquifers tend to occur in relatively undulating landscapes. Across the entire agricultural region of Western Australia, the proportion of the land surface that is located above local aquifers is substantial, with estimates ranging from 30 percent to 50 percent.
2. Low transmissivity
Even in regional aquifers, it is possible for treatments to be effective locally, at least temporarily. Typically, soils in the large wheatbelt valleys of Western Australia, which are archetype regional aquifers, have low "transmissivity", meaning low potential for water to pass through them, and very low slopes, so that lateral water movement is very slow indeed. Thus, on short time scales, salinity in these large regional aquifers is effectively a one-dimensional problem, with changes in groundwater levels depending primarily on recharge at that site.
Low water movement in broad regional aquifers means that treatments implemented in the broad valleys have the potential to be locally effective. Although the protection should be considered temporary in most cases, the time scale over which it will remain effective can often be long on the time scale of farm business planning.
On the other hand, the distance that positive effects may extend away from land on which treatments are implemented is also likely to be very small, less less than 40m in most cases. At least in Western Australia, it appears that it is rarely possible to implement treatments that protect much more than the land on which they are situated.
3. Persistence of salinity in waterways
For river salinity, the issue is whether on-farm treatments can provide any significant reduction in the off-farm costs. Hydrologists Hatton and Salama concluded that, "Catchment scale remediation via revegetation, even extensive revegetation, will have only minimal effect in reversing salinity trends in the foreseeable future."
This means that even if farmers were to factor in additional benefits from revegetation resulting in protection of waterways, the magnitude of these additional benefits would be very small and therefore unlikely to alter farmers’ management.
4. Consolidation of farms
Average farm size has grown steadily over time due to consolidation of farms (e.g. farm numbers in WA fell from 13,041 in 1983/84 to 10,702 in 1995/96). As this process continues, it is increasingly likely that discharge and recharge sites occur within the same farm. Therefore, fewer farmers are suffering from saline discharge that originated outside their own farm.
5. Discounting of distant future benefits
It may be that revegetation would have greater effects in the very long term than we have been able to observe so far. However, even if this is true, the economic significance of these benefits will be relatively low due to the impact of discounting. Discounting is employed by economists to allow valid comparisons of benefits and costs that occur at different times. Discounting means that benefits occurring in the distant future carry little weight in present calculations. Although this does not eliminate externalities from the equation, it combines with the other factors discussed here to reduce their significance.
6. Balancing costs and benefits of salinity treatments
The basis for blaming off-site impacts for the development and persistence of dryland salinity is the idea that individual farmers acting in their own self interest are not likely to properly weigh up the impacts of their actions on others. If they were to do so, the argument goes, they would do more to prevent off-site salinity impacts originating on their farms.
However, given current technologies, the optimal balance between the costs and benefits of salinity prevention may involve very little additional prevention or abatement of salinity. This is because current perennial options available for most agro-climatic zones are, at best, marginally unprofitable and at worst highly unprofitable.
When this set of issues is considered, it becomes clear that the main problem preventing reductions in salinity is not the existence of off-site impacts, but rather the non-existence of sufficiently profitable perennial plants.
Conclusion
The concept of Integrated Catchment Management seems to imply that most (or even all) farmers must collaborate and coordinate their actions to defeat salinity. This idea has gained a strong hold on the collective conscience of many farmers and of most professionals working in agriculture-related areas. The strength and common-ness of this belief is astonishing given the proportion of land for which it is actually untrue. Given the difficulty of achieving a collaborative and coordinated approach in practice, the belief that it is necessary to do so provides a disincentive for farmers to act individually to address salinity on their own farms. This disincentive may arise even though in most situations on-site treatments are by far the most effective option and may often be the only potentially effective option.
We emphasise that we are not attempting to claim that saline groundwaters never cross farm boundaries. Instead, our objective is to move general perceptions towards a more balanced and realistic view of the importance of off-site impacts. Some assessment of the extent to which our arguments are relevant in states other than Western Australia seems to be urgently needed.
This article is a summary of Pannell, D.J., McFarlane, D.J. and Ferdowsian, R. (1999). "Rethinking the Externality Issue for Dryland Salinity in Western Australia", SEA Working Paper 99/11, Agricultural and Resource Economics, The University of Western Australia. For the full article, see the web page: http://www.general.uwa.edu.au/u/dpannell/dpap9911.htm
Pannell, D.J., McFarlane, D.J. and Ferdowsian, R. (2001). Rethinking the Externality Issue for Dryland Salinity in Western Australia, Australian Journal of Agricultural and Resource Economics 45(3): 459-475.
Citation for this brief version: Pannell, D.J., McFarlane, D.J. and Ferdowsian, R. (1999). "Rethinking the Importance of Off-site Impacts for for Dryland Salinity in Western Australia", SEA Working Paper 99/11b, Agricultural and Resource Economics, The University of Western Australia. http://www.general.uwa.edu.au/u/dpannell/dpap9911b.htm
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