1301.0 - Year Book Australia, 2006  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 20/01/2006   
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This article was contributed by the Australian Centre for International Agricultural Research (ACAIR), September 2005

The General Assembly of the United Nations (UN) declared 2006 as the International Year of Deserts and Desertification. The objective is to help prevent the exacerbation of desertification worldwide by raising public awareness and supporting activities combating desertification and land degradation. Desertification is a major economic, social and environmental problem that affects one third of the world’s land surface and about one billion people in more than 100 countries.

The United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa provides a framework to assist affected developing countries to deal responsibly with land degradation and desertification. Australia signed the Convention in 1994 and ratified it in September 2000.

Australia's support for the work of the Convention is channeled mostly through the UN's Global Environment Facility, which was established in 1991 to help developing countries fund projects and programs that protect the global environment. The Australian Government separately, through AusAID and ACIAR supports a range of bilateral programs to combat desertification in developing countries, with the aim also of reducing poverty and achieving sustainable development.

Australia's capacity to contribute to international efforts to prevent land degradation stems from the knowledge of its Indigenous peoples, who have coped for millennia in the driest inhabited continent on earth, the experiences of generations of immigrants who have sought to make a living, notably in arid and semi-arid parts of Australia, and quality scientific and social research.

Fire and grazing are integral elements of Australia's arid landscape, and their management is critical for the prevention of land degradation and desertification. For example, changes to the magnitude, frequency, intensity and type of fire regime can have significant undesirable impacts on biodiversity, and soil and water stability.

Through lessons learnt domestically and by application of Australian experience overseas, Australia is highly regarded as a partner in countries affected by land degradation and desertification and in multilateral bodies working in the field.

Two ACIAR-funded research projects under way in the Yellow River Basin in north-west China are tackling land and water resource degradation that is threatening the social, economic and ecological sustainability of the region.

In the first project, Australian National University Professor Jeff Bennett is working in partnership with the China National Forestry Economics and Development Research Centre to evaluate the effectiveness of the Grain for Green (GFG) program, which encourages farmers to convert steep cropland into forest and perennial grasslands.

The practice of planting annual crops and grazing livestock on deforested lands with a slope of more than 25 degrees has led to accelerated rates of soil erosion in China, particularly in the Yellow River Basin.

The Chinese Government established the GFG program in 1999 on a pilot basis in Shaanxi, Sichuan and Gansu provinces, to help bring soil erosion and consequent problems - such as sandstorms and frequent flooding - under control. When the program was formally launched in 2002, its scope was extended to include 25 provinces and autonomous regions. It has involved more than 100,000 villages, more than 15 million farmer households and more than 60 million people. It is the biggest participatory forestry development program in China.

Under the program, farmers who volunteer to convert existing cropland into grassland or forests are paid in grain and cash. The duration of the payments depends on the type of conversion made: farmers who plant trees for ecological protection purposes (and at a higher density than commercial plantings) receive payments for longer than farmers who convert cropland to grassland, or who turn cropland into forest using commercial species of trees. Farmers are also encouraged to reforest areas that are not currently agriculturally productive but suitable for growing trees.

Professor Bennett says that in the first stage of the research - an investigation of the financial impacts of the program on farmers in the Ansai, Binxian, Gonghe and Minhe counties - preliminary data obtained in a household survey of participating farmers showed they were 'financially much better off' through the program, both through the subsidies gained for conversion activity and because the new forest crops and grasslands represented long-term, more profitable income streams. In addition, previously barren lands are being brought into productive use, increasing crop yields and farmers’ incomes, and tree crops are protecting existing crops, effectively forming buffer zones around them, he says.

Researchers will next undertake a social cost-benefit analysis of the program to investigate its impact on greater social wellbeing. This will involve estimating the ‘off-site’ environmental and social benefits (such as better air and water quality in ‘converted’ areas, as well as in distant cities such as Xi’an and Beijing) in an effort to determine the natural resource management outcomes preferred by the broader community and the price it would be willing to pay for them.

Using information obtained in the first two stages of the project, researchers will assess the policy mix and suggest alternative policy strategies, using a technique called Institutional Economics Analysis. For example, Professor Bennett says that at this stage it seems the Chinese Government could have adopted a more strategic approach, with some parts of northern China needing more funding than others.

Professor Bennett says the collaboration with the China National Forestry Economics and Development Research Centre is important on many levels, including providing a good avenue into government decision-making with the aim of making the research a policy reality.

The second ACIAR-funded research project aims to increase the productivity and sustainability of water use in Yellow River Basin irrigation systems by establishing equitable institutional arrangements, including water trading, that promote more efficient water allocation and management, as well as maintaining social cohesion.

Northern China is an important agricultural region and the site for much of the country’s industrial production, but has a much lower per capita water endowment than in the south. There is rapidly increasing demand for water but an increasingly precarious supply, due in part to serious and growing water pollution, water misallocation and deteriorating irrigation systems.

In signing up to the World Trade Organization, China has relinquished trade barriers, putting pressure on farmers to lift productivity.

The success of this endeavour demands that water be used most efficiently, on the right crops, in the right amounts and at the right time. With China’s move to a more market-oriented economy, farmers now have more freedom and significant opportunities to cultivate less intensive, horticultural crops that generate higher returns, such as sunflowers and vegetables.

Establishing an integrated water allocation system that is more flexible and responsive to these new developments, as well as being ecologically sustainable, has therefore become a priority.

Dr Stephen Beare, chief economist at the Australian Bureau of Agricultural and Resource Economics in Canberra, is working with the Centre for Chinese Agricultural Policy and the International Water Management Institute to develop a simulation model to evaluate the economic impact of alternative water trading and other allocation policies in the basin. This will enable the research team to provide recommendations on more effective water trading arrangements between villages and sectors, as well as policy tools to aid the sustainable management of water resources.

Dr Beare says the project is progressing well, with two additional resources - the Economic Research Service of the United States Department of Agriculture and Professor Scott Rozelle from the University of California - agreeing to collaborate on the project. With their assistance, the first stage of the project has been completed.

Researchers have put together the most comprehensive data ever collected on the hydrological, physical, agronomic and socioeconomic conditions existing in the Yellow River Basin. The international research partners have signed two memorandums of understanding with the Chinese Ministry for Water Resources, giving the project important backing at a political level.

Researchers will estimate the economic productivity of water uses by sector for different regions of the basin and a preliminary simulation model is to be completed by May 2006. Policy recommendations are to follow in June 2006.

Dr Beare says the project will provide the tools to evaluate policy options, and identify practical targets and opportunities to reallocate water with the aim of promoting economic, environmental and social sustainability in the region.