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Article

Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment

by
Romy Greiner
River Consulting, Nietta, TAS 7315, Australia
Land 2023, 12(7), 1310; https://doi.org/10.3390/land12071310
Submission received: 14 May 2023 / Revised: 24 June 2023 / Accepted: 28 June 2023 / Published: 29 June 2023
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Abstract

:
Australia’s tropical savannas are a vast landscape of grasslands with high biodiversity value. Effective biodiversity conservation in this landscape requires private contributions to complement the under-sized formal conservation estate. The landscape is dominated by rangelands, in particular extensive cattle grazing on pastoral stations which typically measure hundreds or thousands of square kilometers. The paper reports the results of a discrete–continuous (or “two-stage”) choice experiment conducted with savanna pastoralists. A discrete choice experiment explored the stated willingness to participate in two long-term conservation strategies: (i) total exclusion of cattle from designated parcels of land with management of that land for biodiversity, and (ii) the implementation of rotational grazing systems governed by the requirements of biodiversity, among other contractual attributes. An extension question asked about the area that respondents were willing to supply and a contract they were willing to accept. Double-hurdle (type II tobit) modelling was used for combined data analysis. The results show that potential participation in voluntary conservation contracts by pastoralists is primarily influenced by contract attributes, namely, the conservation action required, the stewardship payment received, contract length and whether the contract contains flexibility provisions. Land productivity is also significant. The level of stewardship payment required to incentivize participation in the conservation of grasslands is in line with opportunity costs, in particular option value. The amount of land that pastoralists are willing to supply is determined by the conservation payment as well as farm size and intrinsic motivation. This research illustrates strategies for integrating biodiversity conservation into cattle grazing operations in Australia’s tropical savannas, which are applicable to grasslands globally. It provides data of an economic nature to inform the development of multi-tenure biodiversity conservation strategies.

1. Introduction

Biodiversity decline is a global problem, caused largely by human activities including direct use, habitat fragmentation and destruction, and pollution, and is accelerated by climate change. Public protected areas, which make up about 13–17% of the world’s land surface, have been the cornerstone of conservation efforts. However, while this network of protected areas has provided significant biodiversity benefits, it has been unable to halt biodiversity decline [1,2]. More comprehensive strategies are required to safeguard biodiversity and the ecological processes and human wellbeing it supports [3,4]. These strategies need to include conservation on private land, which in almost all nations far exceeds the area of conservation reserves. Much of the private land is used for agricultural purposes and changes in land use or land management practices may be required to sustain particular patterns of biodiversity [5].
Tropical savannas are vast landscapes of grasslands in tropical latitudes and exhibit varying densities of trees and shrubs. They are highly biodiverse with species adapted to monsoonal rainfall conditions with high seasonal, inter-annual, and spatial rainfall variability [6,7]. Mobile species, particularly birds, respond to spatial and temporal resource heterogeneity through migration, while other species, including mammals and reptiles, require more locally specific refuges to survive [8].
Like other types of grasslands, tropical savannas have experienced extensive degradation globally, resulting in profound declines in biodiversity and ecosystem services [9]. Australia’s tropical savannas are vast, covering around 1.9 million km2, and make up 9% of the currently remaining global tropical savannas [9]. They have seen little visual transformation since European settlement. Indeed, Australia has the largest area of “highly intact” tropical savanna [9]. Nevertheless, there have been regional or more extensive declines in and losses of some native plant [10,11,12,13] and animal groups, particularly mammals [14,15,16,17] and, less so, birds [18,19]. Part of this decline followed soon after the advent of pastoral establishment [16,19,20,21], but broad-scale declines are continuing for some groups of species [15].
While, in global comparison, the protection level of Australia’s tropical savannas is high [9], less than 7% of the landscape is contained in formal conservation reserves, while a similar area is classified as Indigenous protected areas [22]. Reserves are discontinuous (largely surrounded by pastoral lands) and geographically concentrated in higher rainfall (northern) areas [23]. It is consequently unrealistic to think that biodiversity conservation in Australia’s tropical savannas can be achieved with public protected areas alone. Landscape-scale approaches which increase landscape connectivity and secure refuges are critical to securing biodiversity in the face of multiple threats, most importantly climate change [24,25].
The vast majority (75%) of Australia’s tropical savannas are rangelands and used for extensive beef cattle grazing. Individual beef grazing enterprises can be tens of thousands of km2 in size, and collectively occupy >95% of environments with the highest productivity [26,27]. A very large farm size means that a single landholder’s land management actions can have implications for soil, water, and biodiversity conditions at the regional scale. While the clearing of native vegetation, the introduction of non-native grasses, overgrazing, and the replacement of native herbivores with domestic animals are detrimental to endemic biodiversity [9], it has been shown that the conservation of many species of animals and plants can be compatible with grazing, provided grazing land management respects the needs of these species [28,29]. Rangelands therefore have the potential to complement the existing reserve systems and be used for “off-reserve” conservation [30].
Many landholders have a strong land stewardship ethic and are intrinsically motivated to care for their country and its biodiversity [31]. However, financial and technical constraints limit landholders’ capacity to dedicate land to biodiversity conservation [32]. Financial incentives that are sufficiently high to cover the direct and opportunity costs of conservation action have been hypothesized to be effective in enticing landholders in the tropical savannas (“pastoralists”) to participate in voluntary, contractual biodiversity conservation [33], as such incentives have been found to be effective elsewhere, e.g., in the USA [34] and Europe [35]. It is unknown to what extent Australian pastoralists are willing to participate as there has been no history of financial incentive schemes, and very few and only locality-specific surveys have been previously conducted [36,37]. It is also unknown what factors play a role in determining how much land may be available for on-farm conservation.
The research presented here seeks to fill this knowledge gap and ascertain how northern Australian pastoralists—and therefore the north Australian beef industry—may engage with biodiversity conservation programs on pastoral land. To this effect, a landscape-scale discrete choice experiment (DCE) was designed and implemented [38]. Choice experiments have been used extensively to inform the design of contractual biodiversity conservation (CBC) and agri-environmental schemes (AESs) globally [39,40,41,42,43,44]. The applied relevance of this paper is that it provides economic data which can assist negotiations between landholders and potential investors in biodiversity conservation action. It helps articulate a negotiation position for the north Australian beef industry and provides a reference tool for potential investors—governments, non-government organizations, developers, and individuals. Secondly, the paper illustrates strategies for the integration of biodiversity conservation into cattle grazing operations, which are applicable to grasslands globally. Thirdly, the paper also makes a methodological contribution to the scientific literature as it presents a rare example of an extended DCE design. The discrete–continuous formulation explores not only the stated participation by private landholders in AESs but how much land they are willing to supply. Differentiating the two decision points is important for optimizing the area of coverage of AES schemes for maximum biodiversity benefit, rather than maximising farmer participation [45].

2. Materials and Methods

2.1. Research Area

The study area (Figure 1) included approximately one million km2 of tropical savannas with particular focus on the more southerly and lower rainfall parts which are under-represented in the formal reserve system.

2.2. Survey of Pastoralists

A survey was conducted on pastoralists operating in the area. The number of potential research participants was estimated to be fewer than 700 (Western Australia ≈ 35, Northern Territory ≈ 110, Queensland ≈ 550) due to the generally large size of properties and consolidation of properties into larger pastoral enterprises. A combination of formats of research participation was offered to accommodate pastoralists’ preferences and to appropriately capture decision making within business units. Providing various opportunities for pastoralists to participate in the research served to maximize response rate and minimize potential participation bias of the sample [46].
The survey was principally administered via face-to-face interviews during visits by the lead researcher on pastoral properties or the city headquarters of some corporate pastoral properties during April–July 2013. Interviews were pre-arranged and all pastoralists who were prepared to participate in the survey and available at a suitable time were interviewed. Interviews typically took between 40 to 55 min and complete. The survey was governed by ethics approval H12025 from Charles Darwin University.
The survey included demographic questions and explored farm business characteristics as well as existing grazing practices. It explored respondents motivations, attitudes, and risk preferences through Likert scales [47]. It also contained a discrete–continuous choice experiment, which is further described below.

2.3. Discrete Choice Experiment

The aim of the survey was to develop the data foundation for estimation of, firstly, pastoralists’ willingness to participate in voluntary biodiversity conservation, and secondly, the potential supply of land to conservation contracts. To that effect, a DCE was included in the survey. In the context of conservation agriculture, DCE is a commonly used method to reveal the contract preferences of farmers and support the design of voluntary incentive programs [48]. It is conceptually embedded in the theory of consumer choice, which states that individuals’ choices depend on utility or value gained from the attributes of the goods being purchased [49], and integrates concepts of conjoint analysis and discrete choice theory [50]. In the context of AES, DCE explores the willingness of farmers to accept compensation for contractual arrangements which bind them to deliver environmental services. Contract attributes specify the compensation level they stand to receive and other contract conditions, including contract duration, land-use requirements or required conservation outcomes, flexibility provisions, and technical support offered, among others [48]. Farmers’ willingness to accept compensation is established by presenting survey respondents with repeated samples of hypothetical contract alternatives (choice tasks), which are drawn from all possible choice tasks according to statistical design principles [51]. Key design considerations for a DCE include the selection of choice alternatives, number of choice tasks, response format, attributes, and attribute levels. The design process and methodological choices underpinning this DCE are detailed elsewhere [38]. An illustration of one choice task put to survey respondents is shown in Appendix A Figure A1, while Appendix A Table A1 provides a summary description of experimental design parameters. Contract attributes included required conservation action, annual per-hectare payment, contract length, the level of flexibility in contract conditions, and monitoring arrangements.
While contract attributes and attribute levels are shown in Appendix A Table A2, a description of the conservation options is warranted here. The definition of conservation requirements was guided by (a) the idea of a multi-tenure reserve system [52], which would see land taken out of cattle production and managed, by the pastoralist, exclusively for biodiversity conservation, and (b) the co-existence of grazing and biodiversity, based on the premise that conservation of many species of animals and plants is compatible with grazing, provided grazing land management respects the needs of these species [28]. Three levels of biodiversity conservation activities were designed to achieve broad-scale conservation by maintaining the habitat integrity of flagship species and grazing-sensitive species. This was done to ensure relevancy of conservation activities across a wide range of geographical and business situations. It also aligned with a specification of stewardship remuneration on a dollar-per-hectare basis. To make the conservation alternatives relevant for pastoralists, they were expressed in terms of their relationship with the principal enterprise, cattle grazing. Exclusion of cattle from areas designated for biodiversity conservation was expressed in terms of duration of exclusion and impact on grazing productivity. Management requirements associated with a shifting focus of land management to biodiversity conservation were specified, including weeds, feral animals, and fire management. This approach put respondents in a position to make informed choices in the DCE between current land use and conservation contracts offered on the basis of relative income, opportunity costs, option value, perceived risk, and discount rate.
In particular, two types of conservation actions were defined: (i) “Cattle exclusion” demanded that cattle be removed from the area contracted for conservation for the duration of the contract. Active land management aiding biodiversity conservation needed to be undertaken including ongoing control of feral animals and declared noxious weeds, maintenance of fences, and removal of stray cattle from the area. This meant that graziers incurred opportunity costs from lost cattle production as well as costs for ongoing land management and, if the contract specified self-monitoring, costs of conducting monitoring activities. (ii) “Rotational grazing” allowed grazing of the land during parts of each year but required that the grazing system be modified to aid biodiversity conservation. This meant that cattle had to be excluded from the contract area at times of highest sensitivity of biodiversity to grazing or presence of cattle. Rotational grazing could take two forms. Short exclusion periods would cause no production losses [53]. An illustration offered to research respondents was the exclusion of cattle from grasslands containing lagoon areas during the breeding season of brolga (Grus rubicunda) to protect eggs and chicks from cattle impact and thus increase breeding success. Longer exclusion periods were assumed to result in a loss of cattle production from the contract area of up to 50%. Such a conservation scenario could involve the exclusion of cattle from grasslands to allow seeding of grasses as a food source for Goudian finch (Erythrura gouldiae).
When considering the alternatives contained in a choice situation, respondents were able to assess the full realm of benefits and cost of options, including stewardship payment compared to opportunity and management cost [54,55]. “Cattle exclusion” provided cost savings from reduced labour, fuel, and veterinary costs because the cattle herd would be reduced. However, general maintenance of fences and watering points incurred ongoing costs. Some contract alternatives required that pastoralists provided regular monitoring of contract areas. Opportunity costs included foregone cattle production and subsequently reduced cattle sales in a historically highly volatile market for beef cattle, and forgoing intensification and agricultural development opportunities in some cases. Costs of providing environmental management as part of contract conditions could be associated with staff wages, e.g., for mustering stray cattle and undertaking weed control, and the variable costs of, e.g., weed control. If participation in a contract meant a reduction in the size of the cattle herd, respondents were also prompted to consider the cost of re-building their cattle herd post contract. Respondents considered the benefit of receiving regular and known stewardship payments compared to the risks of participation in BCB. Such risks included exposure to higher-than-expected costs and inconvenience (e.g., more frequent mustering of stray cattle), institutional risk (e.g., investors reneging on contracts), environmental risk (e.g., contract areas reducing the ability to shift cattle around the property in response to environmental calamities such as fire and inundation), and market risk (e.g., missing out on a possible bonanza in times of very good cattle prices).

2.4. Discrete–Continuous Extension

The methodological aspect which is most relevant for the current line of inquiry is the extended design of the DCE, in the form of a discrete–continuous formulation; also referred to as two-stage design. Many DCEs with farmers include an area component as a choice attribute, e.g., % farm area or % cropping area [56,57]. This approach considers the quantity question as being part of the participation choice and assumes that farmers have the capacity to incrementally adjust land management across their land as per the area attribute levels stipulated in the experiment. In contrast, the discrete–continuous design involves the selection of a preferred contract option and the supply of area for the chosen option as two separate but interdependent choices [58]. The main advantage of the discrete–continuous design is that it enables a more accurate estimation of the potential enrolment of land compared to standard DCEs, which tend to overestimate area supply [59]. Despite this advantage, discrete–continuous design has been applied in few instances in the context of AES participation by farmers [45,60,61,62,63,64,65,66,67].
In the context of tropical savanna rangelands, the discrete–continuous design is particularly aligned with the layout of vast pastoral stations which are divided into large paddocks. Paddocks are typically fenced to landscape features and can be tens or hundreds of km2 in size, and of varying production and biodiversity values. Operationally, following each discrete choice task in which respondents selected a contract alternative, they were asked how much land they would provide in that contract alternative. The minimum area offer required was 400 ha in recognition of the large scale of the conservation task at hand. Respondents were also asked to describe the land they were offering to provide.

2.5. Data Analysis Using Type II Tobit Modelling

The discrete–continuous format of the choice tasks—asking a “participation decision” prior to an “amount decision”—predisposes the data to analysis using two-part models and, more specifically, a double-hurdle model. A hurdle model is suited to situations where one decision is made first and affects the second decision [68]. The model chosen is a type II tobit model, which represents a hurdle model [69]. Hurdle models estimate the first and second steps sequentially and allow for the analysis of separate marginal effects [70,71]. For the given data, the model initially analyses the participation decision, then the area supply decision. In doing so, the decisions are assumed to be independent and homoscedastic, with normally distributed error terms [72]. The type II analysis makes it possible for an independent variable xj to have a positive effect on the probability of participation (P) and a negative effect on the amount offered (E). The participation decision is given by P(y > 0|x) and the intensity equation is given by E(y|x,y > 0). In the tobit model, by definition, the area supply variable is censored at zero because supply cannot be negative. The distribution is characterized by many zeros, which are genuine zeros, meaning respondents implicitly choose to supply zero area if they choose the “none” alternative in the preceding choice task.
The hurdle model was implemented in NLogit software [73]. The dependent variable was the land area offered. Area data were Log(10)-transformed to reduce skewness of data and generate a normal distribution of the dependent variable (and the independent farm area variable), thus enabling linear regression analysis in the area supply model component. Explanatory model variables included the five contract attributes given in the DCE as well as variables describing business and personal attributes, which were hypothesized to potentially influence participation in AESs. The business attributes were directly obtained from the survey data and included property size (km2), land productivity measured as stocking rate (head of cattle/km2), existing grazing system (binary variable with value of “0” indicating a fixed stocking rate and “1” indicating that the property used rotational grazing), and prior participation in conservation programs (binary variable with value of “1” indicating prior participation). Two explanatory variables captured respondents’ personal attributes, namely, “attitude towards biodiversity” and “financial motivation”. Both variables represent factor scores which were derived by exploratory factor analysis from Likert scales contained in the survey, the process of which is described in [47]. “Financial motivation” represents the extent to which respondents’ decision making is driven by financial and economic considerations. “Attitude towards biodiversity” represents the extent to which respondents are concerned with the native flora and fauna on their land and sums up their intrinsic motivation for biodiversity conservation.

3. Results

3.1. Descriptive Results

The survey yielded 104 valid responses. The responses captured approximately 15 percent of the estimated sample frame with coverage achieved in all three states/territories and a range of property sizes and situations represented in the sample (Table 1). Respondents were found to present a characteristic profile of the pastoral industry, representing all bioregions within the research area and including the full range of enterprise sizes, grazing systems, and ownership structures. The average property size was 2411 km2 (median = 775 km2), with properties in the Northern Territory and Kimberley sections being significantly larger than those in Queensland.
The average stocking rate was 8.9 head of cattle per km2 and was significantly higher in Queensland compared to the Northern Territory and Kimberley. Overall, the profile of sample properties was in line with other snapshots of the pastoral industry, including national farm statistics [74] and a 2010 NT pastoral properties survey (DPIF 2010), and consistent with industry expectations. The total area managed by survey respondents was approximately 250,000 km2, or about one quarter of the research area.
Of survey respondents, 12.5% indicated that part of their land—between 1 and 60%—was currently “unused”. There were two principal reasons given for why land was not being used. Firstly, land was not deemed suitable for grazing for economic reasons (very low productivity) or because of a presence of introduced toxic plants, such as belly ache bush (Jatropha gossypiifolia). Secondly, specifically on larger properties, not all land that was suitable for grazing had been developed (through fencing and installation of watering points), and in most such cases plans were in place to bring this land into production in the foreseeable future.

3.2. Participation and Area Supply Model Results

Of 104 survey respondents, four were removed from the analysis of choice data as they did not truly engage with the choice experiment, thus did not reveal true preferences. Most respondents completed six choice tasks, some completed fewer, and pre-test respondents completed twelve choice tasks. In total, there were 1584 choice observations available for analysis, of which 1198 (76%) were associated with choice of the “none” alternative. Of respondents, 50% chose the “none” option in all choice tasks, while 10% chose one of three available contract options in all six choice tasks. A further 29% of respondents chose a contract option in four or five of the six choice tasks. The selection of a contract option in a choice task was followed by an area supply offer for the type of contract chosen. Area size offered ranged from 4 to 2100 km2, with an average offering of 279 km2 and median offering of 100 km2. This equated to between <1 and 100% of property size being offered into the chosen contract, with an average of 24% and a median of 12%.
The hurdle model results are shown in Table 2. The coefficients, significance levels, and standard errors are given. It is immediately evident that the decision to participate in voluntary conservation contracts was driven by factors that were largely different from the decision on how much land to supply.
The participation decision was significantly influenced (p < 0.01) by all contract attributes other than “monitoring arrangements”. In particular, the “stewardship payment” had a significant positive influence on the participation decision, while more stringent “conservation requirements” had a significantly negative influence. The direction and significance of both variables was as expected as these two variables principally represented the opportunity costs associated with participating in a CBC. Respondents significantly preferred a shorter “contract duration”. They were also significantly more likely to participate in contracts that stipulated “flexibility provisions” compared to contracts that offered no flexibility. Contractual flexibility allowed contracts to be temporarily suspended in seasons of exceptional climatic circumstances so that the conservation land became available for grazing. It thus served to mitigate risk. Contracts could be suspended no more frequently than one year in every consecutive five years of contract duration. No payment was received while the contract was suspended.
Of business attributes, land area was not a significant factor in explaining participation. Land productivity, measured as stocking rate (head of cattle/km2), negatively correlated with participation at p < 0.05, indicating that pastoralists on less-productive land were more likely to engage with AES. The “existing grazing system” had a significant influence in that respondents who rotationally grazed their land were significantly more likely to participate than those who did not routinely shift their cattle. “Prior participation in conservation programs” had no significant effect.
Of personal attributes, neither respondents’ “financial motivation” nor “attitude towards biodiversity” significantly influenced the participation decision.
The results of the participation model thus suggest that the decision to sign up to a voluntary conservation contract is principally a business decision, whereby the contract demands are considered within the current grazing system and assessed on financial merit and risk considerations.
Keeping all other factors constant, the shadow price (AUD ha−1 a−1) for each variable was obtained by dividing the variable coefficients by the stewardship payment coefficient. Implementing conservation grazing, i.e., grazing permitted for most of the year except bird breeding season, required an average compensation of AUD 3.81 ha−1 a−1 (values for year 2013). In comparison, the requirement to remove cattle completely from the contract area and manage the area for conservation required an average financial incentive of AUD 11.43 ha−1 a−1. Each additional year of contract duration required, on average, an additional payment of AUD 0.40 ha−1 a−1. Introducing flexibility provisions reduced the required stewardship payment by, on average, AUD 8.69 ha−1 a−1. Respondents required an average premium increase of AUD 1.18 ha−1 a−1 per additional unit of carrying capacity. To put these numbers into perspective, the observed profitability of cattle grazing in the tropical savannas, measured as farm cash income per hectare, in the two years preceding the survey ranged from AUD 1.00 ha−1 a−1 to AUD 9.05 ha−1 a−1 across tropical savanna subregions [75]. The average earnings before interest and tax were AUD 10.84 per adult cattle equivalent for the 12-year period 2005–2016 [76].
The right-hand side of Table 2 shows the land supply coefficients that are conditional on respondents’ positive participation decision. The supply decision was significantly influenced by only one of the contract attributes: increasing “stewardship payment” significantly increased the area supply into a given contract configuration. Of business attributes, “farm area” was the only variable significantly positively correlated with area supply, meaning that if a contract was accepted, larger farms contributed significantly more land. Of personal descriptors, “attitude towards biodiversity” had a significantly positive coefficient, meaning that respondents with a high intrinsic motivation for biodiversity conservation were inclined to put forward a significantly larger area into a chosen contract configuration. Sigma, the error from the supply model, was positive and significant, indicating that there were residual factors influencing supply. The model constant was not significant, indicating that the participation and supply decisions were independent of each other.
Respondents were asked to describe the land they offered for CBC. Respondents typically offered land that was currently unused for grazing into “total exclusion” contracts, in particular land that had not been developed for grazing or land that was temporarily unused to allow grassland restoration. Many respondents emphasized that subscribing areas to CBC would defer their intended development. Additionally, paddocks with low productivity were offered, including hilly, rocky, and desert areas. Few respondents specifically considered the contribution that their land could make to biodiversity conservation and offered paddocks that were most suitable for that purpose, including paddocks of high productivity. Of respondents, only two made the minimum area offering (400 ha) to trial CBC on land they deemed particularly biodiverse. Respondents who were rotationally grazing offered land into conservation contracts that they regarded as compatible with the existing grazing regime to minimize potential production impacts. This shows that landholders recognized the potential of CBC to provide an additional income stream from the biodiversity assets on their land with generally very low opportunity costs in terms of foregone cattle production.

4. Discussion

This research complements a growing body of work using choice modelling to explore the willingness of farmers to participate in AES and to support AES design. Specifically, it explores the stated willingness of private owners of large pastoral properties in northern Australia to participate in CBC. While the sample may not be sufficiently large to deliver a statistically representative sample of the northern beef industry [77], it adequately captures the diversity of business situations occurring across the tropical savannas. It is also sufficiently large for the purpose of the research, which is to reliably estimate the likely response of private landholders to the introduction of CBC [38,78].
The discrete–continuous design of the choice experiment was based on the assumption that the participation and area supply decisions of respondents were separate but interdependent decisions [58]. Based on the results of data analysis using type II tobit modelling, this assumption was confirmed. The two decisions were found to be influenced by largely different factors. The results of both the participation and area supply decisions offer several important insights.
Similar to North American ranchers, pastoralists in Australia’s topical savannas exhibit a preference for non-participation in CBC [47,79]. However, in both cases, contract configurations exist which incentivize participation. This research finds that many north Australian pastoralists are willing to countenance a range of biodiversity conservation actions on their properties in return for recurring stewardship payments.
Consistent with utility theory and the vast body of DCE research conducted with farmers [48], higher payments attract higher participation. The level of required payment is directly linked to perceived opportunity costs, i.e., the foregone utility associated with entering into a contract. Opportunity costs principally arise from the impact the conservation requirement has on income as compared to the existing grazing system [80]. The size of this impact is, in turn, determined by land productivity, the existing land use system, production costs, and market conditions. Taking observed farm cash income per hectare as a reference point for production-related opportunity costs, it is evident that, across the industry, pastoralists expect a monetary incentive which far exceeds industry-average per-hectare income from cattle grazing. This is specifically true since, of conservation options explored, only a “total exclusion of cattle” is incompatible with grazing, whereas temporary exclusion requirements may be very small if any beef production is lost. Across the tropical savannas, grazing profitability can range from zero on marginal and unused land to ten-times the landscape average on fertile soils. In addition, there is high income volatility as a result of high inter-annual rainfall, and hence production variability combined with large product price fluctuations [81], resulting in a coefficient of variation of income of 100% [82]. This means that in good years, incomes from grazing are substantially higher than averages may suggest, and pastoralists may be using good years as a reference point when considering participation in CBC. Research with ranchers in the Colombian Orinoco rangelands found that they required similarly high premiums to enrol in conservation practices [83].
Another reason for the high payment required to entice north Australian pastoralists to participate in CBC is contract duration. This research finds a significant negative influence of contract length on stated participation in CBC, consistent with the DCE literature [48,84] and, in particular, north American rangers [79]. Similarly, enduring conservation requirements, in the form of conservation covenants, have been found to severely curtail participation in CBC [85]. To deliver an effective contribution to landscape-scale biodiversity conservation, CBC requires conservation actions to be maintained for many years into the future, with this research considering contract durations between 5 and 40 years. Having to comply with conservation requirements into the future limits pastoralists’ ability to change their production system in response to emerging opportunities. Longer contracts therefore incur an opportunity cost in the form of the option value that pastoralists attach to not being locked into a multi-year contract. The average option value is AUD 0.40 ha−1 a−1, but there is significant heterogeneity among pastoralists in their perception of option value [78]. Thus, where cattle exclusion is critical to biodiversity conservation, stewardship payments need to be higher to ensure participation.
A further aspect of option value and therefore opportunity cost is captured by the attribute “contract flexibility” [83]. Contractual flexibility—in this case allowing pastoralists to suspend the contract conditions and associated payment once in every five consecutive years of contract duration—is an important feature of AES to enable farmers to cope with external uncertainty, in particular the occurrence of extreme weather events [86]. Contractual flexibility generates large utility and reduces the required payment by AUD 8.69 ha−1 a−1. This result is consistent with the DCE literature in that contractual flexibility provisions significantly and positively influence AES participation [48,87,88,89]. This finding is also consistent with the risk aversion shown by many north Australian pastoralists [90]. Risk aversion has been shown to significantly limit farmers’ willingness to participate in AES regardless of benefits to their average profit [91]. In terms of designing CBC programs for the tropical savannas, willingness to participate can be significantly increased and program cost savings can be achieved by introducing contractual flexibility.
Of contract attributes, monitoring arrangements in this research context have no significant influence on pastoralists’ willingness to participate in CBC. This is also consistent with the DCE literature relating to AES [48].
Securing large areas for CBC is important if private conservation is to make a contribution to landscape-scale biodiversity conservation. In landscapes that exhibit little fragmentation, such as tropical savannas and other vast grasslands, the biodiversity conservation benefit generally increases as each conservation area increases [92,93,94]. This research shows that for higher payments, pastoralists are not only more likely to sign up to conservation contracts but also offer significantly larger areas of land into contracts. Similarly, farmers in the Netherlands have been found to respond to a financial bonus with larger land enrolment into biodiversity offset contracts [66]. Across the pastoral industry, the area offered into contracts also increases with property size. Larger properties may contain larger areas of currently unused or low-productivity land. Also, pastoralists with a higher intrinsic motivation offer significantly more land into a chosen conservation contract, thus seeking to make a larger contribution to biodiversity conservation. A previous exploration of pastoralists’ preferences for contract features, including the conservation payment, has shown significant heterogeneity [78], meaning that some pastoralists are willing to supply the same conservation action on the same type of land at much lower costs than others. Such differences can be explained in part by cost heterogeneity and in part by stewardship motivations and biophilic attitudes, meaning that pastoralists who derive an intrinsic benefit from biodiversity on their land are more likely to participate at a given payment level [47]. In theory, such heterogeneity bodes well for the use of competitive mechanisms, such as conservation tenders or auctions, for allocating funding into on-ground programs as a way of unlocking potential efficiency gains [95]. However, it is unlikely that competitive contract allocation processes would work well in a landscape such as the tropical savannas, as farm sizes tend to be very large and an individual landholder can influence landscape-scale biodiversity outcomes [96]. Consequently, it is paramount that negotiated approaches with key landholders are embraced and contract conditions are tailored, to the extent possible, to landholder preferences—without compromising the intended conservation outcome. This is in contrast to the southern parts of Australia and countries such as the UK or Switzerland, where farms are small and consequently a specific conservation service can be potentially purchased from a multitude of farmers, opening the way for competitive approaches such as conservation tenders [97,98,99]. The targeted engagement of larger pastoralists with an interest in biodiversity conservation is the most promising. Securing larger areas for CBC across fewer properties may cost more on a per-hectare basis but save on transactions costs, and can therefore yield efficient as well as effective conservation outcomes [55].

5. Conclusions

The discrete–continuous choice model presented here provides a rare illustration of a choice experiment with farmers, which treats the decision to participate in AESs separately to the decision of how much area to hand over to the AES. Differentiating the two decisions is important if the aim of an AES is to maximize the conservation efficacy of the area enrolled, as compared to optimizing the per-hectare financial efficiency of a program, and reflects “the reality of conservation contracting” [45] (p. 499). Area selection and maximization are key for an AES that seeks to enlist the participation of private landholders in on-farm biodiversity conservation in a landscape where individual land holdings are vast and the land management decisions of a small number of landowners can influence landscape-scale conservation outcomes. Australia’s tropical savannas and other vast grasslands such as the North American prairie are examples of such landscapes. The key to effective biodiversity conservation here lies in securing the enrolment of critical biodiversity refuges into CBC to systematically complement the existing formal conservation estate [99]. In Australia’s tropical savannas, multi-tenure conservation efforts, including on private land, are deemed paramount for the survival of many species [52,100,101,102]. Private conservation can take the form of privately owned reserves, but pastoral landholders also have much to offer, because the co-existence of native biodiversity and pastoralism on extensive rangelands is ecologically possible [103] and, as this research shows, may have little impact on beef production.
From the perspective of the northern Australian beef industry, the existing biodiversity assets provide an opportunity for private landholders to generate additional income through CBC [76,104]. This research shows that many pastoralists are ready to embrace the notion of multifunctionality of landscapes [105,106,107,108] by stating their willingness to participate in conservation efforts through voluntary contractual arrangements. Pastoralists have a clear understanding of the opportunity costs of enrolling in long-term conservation contracts. Hence, participation does not come cheaply, particularly on fertile land, which is least represented in the reserve system. A time-limited opportunity exists for securing large areas of as-yet-unused land through contractual arrangements, before they are developed for cattle production. Future research is required to establish the biodiversity baseline to support decisions about where to carry out certain types of investment efforts, and systematic trials are also required to establish the ecological and socio-economic dimensions of paid-for conservation on private land.

Funding

This research was conducted while the author was employed by Charles Darwin University and funded by the National Environmental Research Program’s Northern Australia Hub.

Data Availability Statement

The survey data are available online at https://doi.org/10.4225/37/5461A1553254F and http://espace.cdu.edu.au/view/cdu:41684 (accessed on 13 May 2023).

Acknowledgments

The author would like to thank all research participants and John Woinarski for the extensive discussion of the material presented. The author also acknowledges the helpful comments provided by three anonymous reviewers.

Conflicts of Interest

The author declares no conflict of interest. The funders had no role in the design of the study; in the collection, analysis, or interpretation of data; in the writing of the manuscript; or in the decision to publish the results.

Appendix A

Land 12 01310 g0a1 550
Figure A1. Illustration of a discrete choice task.
Figure A1. Illustration of a discrete choice task.
Land 12 01310 g0a1
Table
Table A1. Summary description of the choice experimental design [38].
Table A1. Summary description of the choice experimental design [38].
Design ElementsExpressionExplanation
Conceptual constructWillingness to acceptWTA provided construct validity as farmers have property rights over their land and contracts ask them to give up elements of those rights in return for recurring payments.
Response formatBest-worst scalingCompared to ‘pick one’, best-worst scaling delivers a full ranking of all alternatives contained in the choice task. Ranking was achieved through sequential identification of ‘best’, ‘worst’, and ‘second best’ alternatives.
Number of alternativesThree alternatives plus ‘none’ optionThree contract alternatives were offered plus a ‘none’ option to ensure conceptual validity of choice task given that participation in contractual biodiversity conservation was voluntary.
Labelling of alternativesUnlabelledGeneric contract options were offered to focus respondents’ attention on trading off contract attributes.
Number and types of attributesFiveAttributes were developed in consultation with the pastoral industry and confirmed through pilot testing and pre-testing. Attributes defined the hypothetical conservation contracts in terms of the conservation requirement and its impact on cattle production, conservation payment, contract length, flexibility and monitoring arrangements. Attribute details are shown in Table A2.
Number of choice tasks per respondentSixThe final design included 24 choice tasks, which were blocked into four versions of six choice tasks each. Each survey contained one block, i.e., each respondent answered six choice tasks. Blocks were assigned randomly. In the pre-test, respondents answered two blocks each.
Statistical propertiesBayesian d-efficientCompared to orthogonal designs, efficient designs lead to smaller standard errors in model estimation at smaller sample sizes. Modified Fedorov algorithm was used, which does not force attribute-level balance. D-error criterion was used to optimise efficiency of the experimental design. The design was updated following pre-test of the survey with priors derived from pre-test choice data. The Bayesian D-error for the final design was 0.0716. Design was optimised for choice data analysis with RPL.
Table
Table A2. Choice experimental design: contract attributes, attribute levels, and explanation [38].
Table A2. Choice experimental design: contract attributes, attribute levels, and explanation [38].
AttributesLevelsDefinition and Other Relevant Details
Conservation requirement3 levels:The conservation requirement expresses the environmental service to be remunerated. Focus is on broad-scale biodiversity conservation by removing cattle from the contract area either completely for the duration of the contract period or temporarily (i.e. ‘spelling’ the contract area every year) during times when biodiversity is particularly sensitive to grazing. Defined relative to cattle grazing and associated opportunity cost.
Short spellingSHORT SPELLING: Exclusion of cattle for short periods each year depending on biodiversity need, e.g., during nesting season of brolga (Grus rubicunda). There is no reduction in cattle production associated with short spelling. Short spelling is the base level for this contract attribute.
Long spellingLONG SPELLING: Prolonged spelling of contract area each year, e.g., wetlands or riparian areas are spelled during entire dry season, or grassland supporting Gouldian Finches (Erythrura gouldiae) is spelled during wet season and until after grasses have seeded. This may result in up to 50% reduction in cattle production from the contract land.
Total exclusionTOTAL EXCLUSION: All cattle are removed from the contract area (‘locking up country’), resulting in zero cattle production from that land. Fences need to be maintained. Weed and feral animal control need to be conducted. Stray cattle must be removed from contract area every year. A burning regime may have to be implemented to achieve desired biodiversity outcomes.
Annual conservation payment6 levels:
$1, $2, $4, $8, $16, $32 [$ per ha and year]		The contract stipulates and annual per-hectare conservation payment. The value shown is for year 2013 and the payment is indexed for the duration of the contract period, i.e. adjusted for inflation. The payment does not cover fixed costs: necessary infrastructure is paid for separately and up-front. Note: To enhance respondents’ ability to assess the conservation payment in the context of their cattle enterprise, their business situation was established and an indicative value of per-hectare income from cattle production derived. Respondents were also prompted to consider the cost implications of each of the conservation requirements—e.g., cost savings associated with running a smaller herd or additional costs feral animal control action—and risk dimensions—e.g., accumulated biomass exacerbating fire risk and therefore requiring controlled burning.
Contract length4 levels:
5, 10, 20, 40 years		No perpetual arrangement or covenants (when conservation requirements are registered on the land title) are considered. If property is sold, the contract transfers to new owner unless he/she chooses to discontinue.
Flexibility2 levels:
Flexibility/No flexibility		No flexibility: Standard contract with fixed contract conditions. Penalties may apply if conditions are violated. Base level. Flexibility: Farmer has the right to negotiate a 1-year suspension of the contract in ‘exceptional circumstances’ and, if suspension is granted, graze the contract area during specified exclusion periods without incurring a penalty. Maximum frequency 1 in 5 years. No conservation payment received during that year.
Monitoring (conducted by)2 levels:
External/Self		External monitoring: The administrating agency undertakes regular monitoring or contracts an independent provider for the task. Base level. Self-monitoring: The pastoralist undertakes the monitoring but random spot-checks are conducted to results of self-monitoring. Each year the reports of 25% of program participants are validated.

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Land 12 01310 g001 550
Figure 1. Overview of research area.
Figure 1. Overview of research area.
Land 12 01310 g001
Table
Table 1. Overview statistics of survey respondent characteristics.
Table 1. Overview statistics of survey respondent characteristics.
TotalQueenslandNorthern TerritoryWestern Australia
(n = 104)(n = 61)(n = 25)(n = 18)
Property size (km2)
Mean24111010 a5150 b3354 b
Median77554945002375
Minimum18402018
Maximum16,116695016,11612,955
Total250,75061,610128,73860,368
Herd size (head)
Mean15,92510,302 a29,872 b15,259 a,b
Median70005300200006000
Minimum5060030050
Maximum110,000110,00092,00060,000
Total1,656,200628,422746,800274,659
Stocking rate (head/km2)
Mean8.911.2 a6.3 b4.2 b
Median8.111.35.34.2
Standard deviation4.94.82.81.5
Minimum0.83.00.82.3
Maximum22.822.812.57.5
Profit of the beef enterprise in previous year (% of respondents)
Large profit7%8%8%0%
Small profit36%37% a24% a50% b
Broke even21%18% a36% b6% a
Small loss17%13%20%25%
Large loss20%23%12%19%
Respondent’s role on the property (% of respondents)
Owner-Manager62.1%76.7% b40.0% a44.4% a
Employed manager26.2%15.0% a48.0% b33.3% a
Other11.7%8.3%12.0%22.2%
Gender of primary respondent (% of respondents)
male81.6%83.3%84.0%77.8%
Age of primary respondent (% of respondents)
<30 years5.8%6.7%8.0%0.0%
30–39 years24.3%13.3% a44.0% c33.3% b
40–49 years26.2%30.0% b16.0% a27.8% b
50–59 years25.2%28.3%24.0%16.7%
60+ years18.5%21.7% b8.0% a22.2% b
Business structure (% of respondents)
Family owned80.8%88.5% b60.0% a83.3% b
Corporation owned19.2%11.5% b40.0% a16.7% b
Length of current property ownership (% of respondents)
<5 years8.7%10.0% b12.0% a,b0.0% a
5–9 years11.7%5.0% a32.0% b5.6% a
10–19 years26.2%21.7% a24.0% b44.4% b
20–39 years29.1%31.7% b12.0% a44.4% b
40+ years24.3%31.7% b20.0% a5.6% a
Membership of industry/NRM organisation(s) (% pf respondents)
Yes76.7%68.3% a96.0% b77.8% a
Superscripts denote significant differences (Unequal N HSD test, Fisher’s exact, p < 0.05).
Table
Table 2. Results of the type II tobit model.
Table 2. Results of the type II tobit model.
Participation ModelSupply Model
CoefficientSigSECoefficientSigSE
Variables
  Conservation requirement (0 = no conservation action, 1 = grazing allowed for part of the year, 3 = total exclusion of cattle)−0.257***0.0550.036 0.045
  Stewardship payment ($ per ha and year)0.067***0.0060.012**0.006
  Contract duration (years)−0.027***0.0030.001 0.003
  Flexibility provisions (0 = no, 1 = yes)0.587***0.082−0.001 0.069
  Monitoring arrangement (0 = external, 1 = self)−0.077 0.0770.067 0.068
  Farm area (log10[km2])0.038 0.1290.611***0.046
  Land productivity (head of cattle/km2)−0.079**0.038−0.018 0.025
  Interaction term between farm area and land productivity0.022 0.014−0.002 0.009
  Grazing system (0 = set stocking, 1 = [some] rotational grazing)0.176**0.0800.088 0.076
  Prior participation in conservation programs (0 = no, 1 = yes)−0.239 0.1630.105 0.090
  Attitude towards biodiversity (factor score, higher values = more intrinsically motivated to look after biodiversity)0.018 0.0440.083**0.035
  Financial motivation (factor score, higher values = more profit-driven)0.056 0.039−0.029 0.037
Constant−0.496 0.434
Sigma 0.615***0.027
Model statistics
  Observations (N)1584
  Number of parameters26
  Log likelihood−1105
  AIC/N1.428
  BIC/N1.516
SE = standard error; Sig = ***,**-->significant at 1%, 5%; AIC = Akaike information criterion, BIC = Bayesian information criterion.
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Greiner, R. Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment. Land 2023, 12, 1310. https://doi.org/10.3390/land12071310

AMA Style

Greiner R. Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment. Land. 2023; 12(7):1310. https://doi.org/10.3390/land12071310

Chicago/Turabian Style

Greiner, Romy. 2023. "Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment" Land 12, no. 7: 1310. https://doi.org/10.3390/land12071310

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