SECTION 5 AGRICULTURE
Agriculture consists of the production of food and materials for use in the economy, and represents, in an ecosystems services view, the benefit derived from a package of services provided by the environment. These ecosystem services include soil nutrient uptake and fixation, soil water abstraction, and pollination. They all contribute to the production of crops and of fodder for livestock. Farmers manage the overall land environment and harvest crops using labour and machinery.
There are two approaches to the measurement of the input of ecosystem services to the production of agricultural goods. The first approach is to count the entirety of the end product as being equal to the value of the ecosystem services, irrespective of the level of human management and input. This is called the 'harvest approach'.
The second approach recognises that all factors are essential to the benefit being obtained. Under this approach, a share of the benefit obtained (ie, the output of agricultural products) is apportioned to each input, both human and the ecosystem.
Following this second approach, the SEEA Experimental Ecosystem Accounting proposes measuring ecosystem inputs such as soil nutrient cycling and pollination, considering them alongside human inputs (i.e. labour, produced assets, fertilisers), and apportioning the final benefits in proportion to the value of inputs. If these ecosystem services were unavailable for use in production, they would need to be replaced with other factors of production, or production would be reduced or stopped.
This approach provides a measurement boundary which concords with the System of National Accounts production boundary. It also concords with the boundary for the classification of natural inputs as described in the SEEA Central Framework. The approach can be applied across different types of cultivated resources.
It would be difficult to identify the specific package of ecosystem services feeding into agricultural activity with a 'bottom-up' approach as it would require extensive access to individual farm records and links to land values. A 'top-down' resource rent approach has instead been taken, deducting National Accounts variables from total output in order to estimate a rent figure.
Resource rent is taken to represent ecosystem services rent in a manner analogous to resource rent in other areas of the economy. If the human inputs can all be identified and deducted from the value of output, then the remaining share represents the input of the ecosystem to production, used for free by the economy to produce benefits such as crops and fibres.
This publication also contains tables on the total value and quantity of agricultural activity in the GBR Region. This should not be taken as representing a 'harvest approach' to valuation but instead provides context to the resource rent calculations.
TABLE 5.1: TERRESTRIAL FOOD AND MATERIALS PROVISIONING SERVICES, GREAT BARRIER REEF REGION, 2001-02 to 2012-13, Selected Indicators
|Total area crops and pastures (square kilometres)|
|Share of area devoted to crops and pasture (percentage)|
|Total food production value ($ million)|
|Total food production quantity ('000 tonnes)|
|Total other agricultural production value ($ million)|
|Total other agricultural production quantity ('000 tonnes)|
|Agriculture industry regional GOS ($ million)|
|Ecosystem service value ($ million)|
|Ecosystem service as percentage of GOS (percentage)|
|na - not available|
|GOS - Gross Operating Surplus|
|Note: Excludes the Cape York NRM Region|
|Sources: See the complete list at the end of this Section|
The value of the ecosystem service from food and materials provisioning rose from $897 million to $1,344 million (or 50%) between 2001-02 and 2012-13. The value of the service represents 61.2 per cent of gross operating surplus in 2001-01, increasing to 70.5 per cent in 2012-13. There was a significant increase from 2010-11 to 2011-12 in the value of the ecosystem service, from $963 million to $1,331 million, as a result of the impact of lower interest rates on returns to fixed capital which resulted in higher residual economic rent after other factors of production had been deducted.
The physical quantity of food provisioning in the region declined substantially from 34,276 million tonnes to 24,890 million tonnes between 2007-08 and 2010-11, before increasing to 27,603 million tonnes in 2012-13. This change was driven mostly by fluctuations in the production of sugar cane, which is the dominant crop (by volume) in the Mackay Whitsunday and Wet Tropics NRM Regions.
Materials provisioning services measured in physical terms consists mostly of hay and silage in the GBR Region, and peaked in 2008-09 with 458,235 tonnes. By contrast, the total value of materials produced increased from $173 to $301 million between 2007-08 and 2011-12, before decreasing to $237 million in 2012-13. This category of service predominantly covers nurseries, cut flowers, cultivated turf, cotton, hay and silage.
LIST OF REFERENCES
ABS System of National Accounts
(cat. no. 5204.0)
ABS Australian National Accounts: Input-Output Tables
(cat. no. 5209.0.55.001)
ABS Agricultural Commodities, Australia
(cat. no. 7121.0)
ABS Livestock Products, Australia
(cat. no. 7215.0)
ABS Livestock and Meat, Australia
(cat. no. 7218.0.55.001)
ABS Value of Agricultural Commodities Produced, Australia
(cat. no. 7503.0)
Reserve Bank of Australia: Statistical Tables