WHAT ARE NSW FARMERS’ EXPERIENCES OF ENVIRONMENTAL MARKETS?

EXECUTIVE SUMMARY PURPOSE Having synthesized the current state of knowledge in the first EMLP report, BWA conducted semistructured interviews with NSW farmers and landholders. The goal is to understand how the experience of different barriers and facilitators and the local context of participating in, and shaping, environmental markets in NSW, varies between farmers already involved in some form of Environmental Market (EM) versus those who are curious but not yet engaged. Differences identified indicate possibly useful leverage points for EMLP and parallel initiatives to target in efforts to increase participation and shaping of EMs by farmers, and as such, are useful topics for program monitoring and evaluation research to track . APPROACH Our qualitative, exploratory interviews seek to understand potentially important differences in the barriers and facilitators experienced by NSW farmers who currently ARE participating in environmental market transactions (EMTs), compared with those who are not. Respondents also answered questions on trusted information sources, valued aspects of capability and network building program design, and experiences of support from NSW Local Land Services (LLS). The current report builds on a previous literature and practice review study identifying common understandings in the literature, for interviewed policy and program designers and administrators. Interviews took place with 7 current EMT participants (3 carbon, 4 biodiversity scheme participants), and 13 non-participants, who were interested, but not yet engaged (including some skeptical farmers). RESULTS Current participants described environmental markets (EM) as transaction incentivizing farmers to produce environmental services on their land, that they can then sell (or potentially use to offset their own impacts). Only a minority of non-participants describe it this way, with most expressing confusion about exact meanings. About half of them saw EMs as being exclusively carbon related. Beyond ‘offsetting’ transactions, non-participants are also thinking of direct payments, environmental certification and marketing, and supply chain pressures. This broader understanding is more consistent with EML program definition: An environmental market is created when an economic value can be placed on natural capital or environmental services that benefit society, AND there are people willing to produce, sell, buy, or otherwise exchange these in the market. BARRIERS AND FACILITATORS OF EM PARTICIPATION Environmental markets are not seen as easy to understand, nor easy and cheap to access and participate in by participants and non-participants alike. Financial return is a key facilitator inversely, but this is undermined by perceptions of scheme complexity and uncertainty. A lack of a trustworthy, independent source of advice and support for making good decisions, without conflicting interests, is felt strongly. EM participants appear to successfully reconcile environmental values with land stewardship values (i.e. good for the farm, farmer and landscape), whereas non-participants with environmental motivations have doubts as to EMTs ability to support their values. This suggests a possible gap in articulating how EM participants realise stewardship values – which would be of value to more environmentally minded and mainstream farmers alike. Participants also mentioned tensions with tradition as a barrier, but also the aesthetic pleasure and satisfaction of seeing their land thrive, whereas non-participants are not anticipating these experiences. Non-participants also anticipate problems with opportunity costs (being locked into an agreement when better value options to leverage environmental services emerge) and limited flexibility for future land management and business decisions, to a greater degree than participants, potentially reflecting the above gap in articulating the stewardship middle ground. They were also more likely to mention anticipated difficulties in measurement and reporting as barriers than participants, and not being able to ‘count’ existing good land management practices. They were suspicious of what happens with and who controls environmental data about their farm, and are discouraged by potentially being complicit in ‘greenwashing’ someone else’s bad behavior via offsetting. Non-participants were more likely to contrast the relative value of this with ‘insetting’ (i.e. improving their own net balance environmental performance). Participants emphasized the value of ‘honest brokers’ and intermediaries, whereas non-participants are worried about dodgy brokers with conflicting interests, indicating the important and problematic role of intermediaries and experts in EM. Unsurprisingly therefore, both groups see trusted, independent knowledge sources as important. Participants value the chance to share and learn from each other, but non-participants may not be thinking of this potential. INSIGHTS FOR PROGRAM DEVELOPMENT For the EMLP, these results indicate perceived barriers and facilitators we can anticipate for our program participants. We recommend that both the online platform and supportive network activities directly address the above perceptions, and particularly emphasise the chance for peer-to-peer learning, practical learning and field/case based learning. Articulating how EMT can help realise stewardship values and the outcomes of environmentally friendly and profitable farms is key. Simplifying information where possible, and providing strategies and approaches for making good decisions under uncertainty and time pressures (i.e. entrepreneurship) is also going to be important. This includes on the business side, but also regarding EGS methods, measurement and reporting. While doubts were expressed about the current capacity and resources of LLS in this space, results indicate that active support of participating LLS staff is welcome and important, but also that of other farmers, agronomists and local networks. While online learning is not preferred by most respondents, encouraging in-person interaction between LLS staff and participants from the same regions might offset this negative design characteristic of the program. It is likely that our interview sample represents fairly interested farmers, already involved in practices like regenerative agriculture, and is less representative of mainstream farmers and corporate farms / agri-businesses. We also suspect that biodiversity scheme participants were less dissatisfied with some scheme aspects relative to the Emissions Reduction Fund (ERF) and carbon trading, but need more evidence to confirm this. The results also indicate that even with this group of farmers who are relatively interested in EM, there are important differences in experience and level of engagement, which shape perceptions and experiences of barriers and facilitators. These results are indicative, and their relevance and distribution across the broader population of NSW farmers requires further research, e.g. via the forthcoming quantitative population survey, and program participants survey.