Why do Farmers Adopt EMS? Market-Oriented Environmental Schemes and the Governance of Farm Management
1School of Humanities, Communications and Social Sciences, Monash University, Churchill VIC 3842
2School of Geography and Environmental Science, Monash University, Clayton VIC3800
3Faculty of Science, Engineering and Information Technology, James Cook University, Townsville
Market-oriented environmental schemes, such as EMS, have been hailed as a promising mechanism for linking on-farm ecological improvement to marketplace benefits. However, in the absence of assured market benefits, are there other reasons for farmers to adopt and persevere with the continuous improvement practices associated with EMS? Through data from a 2005 study – conducted with a selection of participants in the Gippsland Beef and Lamb EMS Pilot Project – we explore the diversity of reasons that shape farmer adoption and use of EMS practices.
adoption, capacity building, EMS, environmental governance, farming practices, farm viability
The search for measures to simultaneously enhance farm economic viability and improve environmental performance has featured prominently on the Australian political agenda for some time, and voluntary mechanisms to achieve this goal have recently been developed (Dibden & Cocklin 2005; Mech & Hugo 2004). Market-oriented environmental schemes have been proposed as a promising set of instruments for farmers to incorporate the costs of managing natural resources in the market price (e.g., AFPRG 2006; NRMMC 2002, 2006). Environmental Management Systems (EMS), and variants such as Farm Management Systems (FMS) and Property Management Systems (PMS), represent a prominent example of a market-oriented environmental scheme currently being promoted in Australia. EMS are process standards based on a continuous improvement philosophy of ‘plan, do, check, act’ (Carruthers 2005).
Despite the claimed potential of EMS as a tool for integrating a range of financial, environmental and social issues, and a number of success stories in various parts of Australia, there is growing evidence that ‘linked environmental-marketplace benefits are, to date, proving elusive t o find with EMS in agriculture’ (Mech & Hugo 2004: 4; see also Gleeson & Carruthers 2006). In the absence of immediate financial or market benefits, are there other reasons for farmers to adopt and persevere with EMS practices? If market benefits are weak, what sustains farmer interest in market-oriented mechanisms such as EMS? These are questions of some significance for Australian agriculture since the assumption in recent policy thinking is that market drivers provide the primary basis for EMS adoption by farmers (Gleeson & Carruthers 2006: 5). In order to address these questions, we draw upon research conducted in 2005 on the Gippsland Beef and Lamb EMS.
As greater scrutiny is exercised over the ecological consequences of industrial activity, schemes based on EMS provide a mechanism for firms to avert public criticism and costly regulation, as well as potentially contributing to increased revenue from market premiums (Wall et al. 2001). In the case of Australian agriculture, EMS has been argued to represent a particularly useful way forward in both addressing natural resource degradation and improving farm economic viability. EMS is of interest to Australian governments since it integrates a range of environmental, food quality, trade and farm management issues. Nevertheless, there have been generally low adoption rates for certified EMS across a number of industries (e.g., Pahl 2007; Seymour et al., 2007). This reluctance to adopt has been linked to limited consumer willingness to pay premium prices for ‘environmentally friendly’ produce. It might be argued that farmers will not adopt schemes based on EMS until the market ‘signals’ for environmentally certified food become stronger and the private (economic) benefits outweigh the costs. However, we argue that it is necessary to move beyond a purely economic perspective to examine the complex variables that influence why and how farmers adopt, reject, or partially adopt more sustainable environmental management practices.
Drawing on an extensive review of the adoption literature, Pannell et al (2006) argue that there are two key issues that shape farmers’ decisions whether or not to adopt conservation and environmentally-oriented practices. The first is relative advantage, which refers to the extent to which an innovation/practice is better than that which it supersedes: this is shaped by ‘a range of economic, social and environmental factors’ and depends specifically ‘on the landholders’ unique set of goals and the biophysical, economic and social context where the innovation will be used’ (Pannell et al. 2006: 1413-14). The second feature is trialability, which is basically the extent to which an innovation/practice can be trialled on-farm, and the various factors – economic, social and environmental – that shape what a farmer can realistically learn from the trialling process. Trialling is a vitally important process, since it ‘allows the landholder to avoid the risk of large financial costs if the practice turns out to be uneconomic or fails due to inexperience’ (Pannell et al. 2006: 1416). The concepts of relative advantage and trialability point to the need for researchers to take account of a range of context-dependent issues – not just financial benefits – in examining adoption processes.
The history of the Gippsland EMS dates back to the late 1990s when members of Gippsbeef (later renamed Gippsland Natural), a producer alliance, were looking for ways of meeting future market demands. At the same time, Meat and Livestock Australia (MLA), a producer-owned company, was searching for producers to ‘test’ the application of EMS. Seven Gippsbeef members became involved in the MLA pilot project and spent two years developing an EMS relevant to Gippsland beef producers. Subsequently, Gippsland Natural applied successfully to participate in the Federal Government’s $8.5 million National EMS pilot program. This funding covered the costs of training, co-ordination, legal advice and auditing. The pilot project was launched in 2004 under the banner ‘Gippsland EMS’ with the meat marketed using the ‘Enviromeat’ brand – prime pasture-fed beef that is quality assured (through Meat Standards Australia), hormone-free, and environmentally certified to ISO14001 EMS standards. By November 2005, 60 beef producers in Gippsland had implemented an EMS and 25 had obtained third party certification and qualified to supply Enviromeat.
In order to investigate why this group of farmers adopted, and persisted with, EMS, we conducted interviews during 2005 on 18 farms with 28 farmers (10 couples and 8 individuals). At that time, only a few farmers were involved in supplying Enviromeat due to the fact that supply contracts had not yet been finalised with retailers, and selling of the meat was therefore restricted to a farmers’ market. As a consequence, very few reported financial benefits. Recently, Enviromeat has been sold through a small number of butchers and restaurants in and near metropolitan Melbourne and farmers have been receiving 10-45 per cent better prices than they obtained for ‘conventional’ beef (Williams & O’Sullivan 2006: 34). While there are currently 25 accredited suppliers, only a few of these supply meat regularly due to restricted (although rapidly growing) demand. As a result, farmers can supply only a small number of beasts at any one time, and this is not always an economically viable option. Given the lack of immediate financial benefits for some, it could be assumed that these farmers would see little point in continuing with an EMS. However, this was not the case: farmers cited several different reasons for persisting with EMS practices.
While many farmers wished to avoid the economic, social and environmental problems associated with selling into conventional markets, they recognised the selling of a niche product as but one strategy for ensuring their long-term viability. Despite the present low domestic demand for non-organic environmentally-certified products, the adoption of an EMS was viewed as having longer-term benefits in terms of access to ‘conventional’ markets. EMS was argued also to be important in pre-empting future regulation of environmental activities, by both governments and overseas retailers, and thereby ensuring there were no restrictions preventing market access. The adoption of EMS in the short term was thus a mechanism for giving farmers control over how they were regulated. As two farmers noted:
In the absence of immediate market benefits, many of the farmers decided not to proceed to third-party certification, but considered that an ‘informal’ EMS process would still be beneficial in building capacity to deal with future public and private environmental regulation. The significance of EMS is demonstrated in the National Pilot Program Final Report which found that, while most participants believed that market drivers did not exist for adopting third-party certified EMS, 81 % intended to continue using EMS (URS 2006: 3-10).
Most farmers interviewed found the EMS process was useful in reinforcing and extending their existing environmental and business management practices. For this reason the EMS was not viewed as a radical departure from their existing on-farm natural resource management activities (Higgins et al., 2007; see also Carruthers 2005; URS 2006). For instance, a common view was that ‘the EMS was really just spelling out the philosophy that I already had … So philosophically it was in line with what I was already doing. It just reinforced it’. Many believed that they had ‘always sort of been environmentally aware’, and that they ‘didn’t find a lot of things that we were not doing correctly’. Others were interested in EMS as a way of gaining exposure to ‘different views and different ways of looking at things’. Although EMS may be seen primarily as reinforcing existing attitudes and practices, it did have an impact on environmental management. Such improvements were evident in our study through changes in stocking rates, grazing strategies and land use. In fact, one farm management team reported reducing their stock from 500 to 350 head since commencing an EMS. Most of the immediate changes focused on fencing off environmentally sensitive areas from stock. While the short-term changes may not seem significant, the longer-term social changes prompted by doing an EMS were seen as the most important benefits.
While the EMS process reinforced what a number of farmers were already doing, it also changed to some extent their thinking about farm management, and contributed to different ways of organising managerial practices. These less tangible personal benefits have been reported elsewhere (e.g., Carruthers 2006; Carruthers & Vanclay 2007) but as yet have been given little sustained attention. The farmers interviewed reported a number of these benefits. For instance, the formalisation of farming practices through the (much disliked) EMS documentation was believed to provide farmers with a more holistic and accurate view of their farms. For example:
Documenting practices also assisted in prioritising projects around the farm and giving farmers confidence that they were employing ‘best-bet’ practices.
Improved documentation, and increased capacity to prioritise environmental issues, had a range of productive effects on farm management. While EMS may not have contributed to major changes in farming practices, the EMS process provided participants with the capacity to achieve environmental best practice.
Finally, the EMS process assisted farmers in ‘proving’ responsible environmental stewardship to governments, consumers and the broader community, and demonstrating capacity to undertake environmental management activities. Not only was EMS viewed as an important mechanism for improving the environmental image of farmers, but it also represented a source of personal pride in showing that they managed their land and water resources responsibly. For instance:
The capacity to demonstrate environmental management in a formal way was seen as a particular advantage in enabling farmers to apply for natural resource management funding. In a political environment where farmers are expected to improve their environmental practices with minimal government support, adopting of an EMS was seen by some as increasing their chances of securing funding, especially for the provision of ecosystem services (Cocklin et al. 2003).
With EMS approaches likely to become a central part of new natural resource management arrangements after the expiry of the Natural Heritage Trust and National Action Plan in 2008 (see NRMMC 2006), it will be interesting to see whether farmers’ capacity to demonstrate good environmental stewardship is used by government agencies as a prerequisite for access to funding programs.
This paper concurs with recent literature which argues that private economic benefits provide an important starting point in explaining farmer adoption of EMS practices. The farmers in our study initially were attracted to the Gippsland EMS pilot primarily by the prospect of gaining a premium price for their meat. However, many discovered a range of alternative benefits which represented significant ‘drivers’ for them to persist with an EMS, even if this may not have been third-party certified. Re-visiting the arguments of Pannell et al. (2006), we draw two key conclusions concerning the implications of our research for EMS adoption. First, the farmers we interviewed participated in the Gippsland EMS due to its high relative advantage: it involved low short-term input and adjustment costs (since training and auditing fees were government funded), there was the longer-term prospect of economic advantage through a premium price and/or improved capacity to compete in the face of more restrictive future environmental regulations; it was highly compatible with landholders’ existing practices, beliefs and values, and it was not reported as making decision-making more complex. Second, the adoption of ‘informal’ EMS practices (i.e., use of the EMS processes without necessarily pursuing full certification) may be viewed as a strategy by Gippsland farmers for ‘trialling’ EMS but without the ongoing costs or risks of third-party certification. This was seen as a logical strategy by farmers to position themselves as good environmental stewards should stricter resource management regulations be imposed by governments or overseas markets in the future. As a consequence, most of the Gippsland EMS farmers we interviewed had, for all intents and purposes, ‘adopted’ an EMS regardless of whether or not they had third-party accreditation.
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