Understanding why landholders choose to participate or withdraw from conservation programs: A case study from a Queensland conservation auction

Journal of Environmental Management 141 (2014) 169e176

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Understanding why landholders choose to participate or withdraw from conservation programs: A case study from a Queensland conservation auctionq Emma Comerford * University of Queensland, Australia

a r t i c l e i n f o

a b s t r a c t

Article history: Received 22 September 2013 Received in revised form 28 January 2014 Accepted 31 January 2014 Available online 8 May 2014

Ensuring adequate participation by private landholders in a conservation scheme is a challenge for program managers around the world. This paper uses a case study of the Vegetation Incentives Program from Queensland, Australia, to contribute additional information to the literature on influences on participation in conservation, and to offer insight into ways to improve program design to optimise participation. The research is particularly of interest to programs that include a tender mechanism or conservation covenant in their designs. Participation in the Vegetation Incentives Program was limited outside two small geographic areas, with the result that the budget was not expended. A survey of participants revealed that a narrow subset of the rural population was attracted to participate, namely highly educated, experienced landholders with positive environmental attitudes and a low opportunity cost of participation. The research also investigated why some landholders chose to withdraw from the program before full participation. Both qualitative and quantitative methods were used in the analysis. There were a variety of reasons for making the decision to leave, including disliking the requirement for permanent protection, the tender mechanism employed, and not understanding the process well enough. This information can help improve conservation outcomes by understanding where to target limited efforts in a catchment, and clarifying the likely limitations of some aspects of scheme design. Ó 2014 Elsevier Ltd. All rights reserved.

Keywords: Vegetation protection Incentive programs Conservation covenant Attitudes Participation

1. Introduction There are a multitude of schemes that fund conservation by landholders. However, there is no guarantee that landholders will participate in any funding scheme, and low participation reduces the potential environmental benefit of the intervention. For conservation auctions, participation is particularly important to generate competition and opportunity for cost-effective selection. Various theoretical frameworks have been used to explain environmental behaviour. Adoption theory uses a variety of psychological, economic and sociological models to explain uptake of technologies and actions (Rogers, 2003). There is a long history of using this framework in association with conservation (eg:

q This work is based on Comerford, E., 2008, Designing more effective conservation auctions: lessons from Queensland’s Vegetation Incentives Program, PhD thesis, University of Queensland. Opinions expressed in this work are purely those of the author and do not reflect Queensland or Australian Government policy. * Present address: Department of Science, Information Technology, Innovation and the Arts, GPO Box 2454, Brisbane 4001, Australia. Tel.: þ61 7 3170 5761. E-mail address: [email protected]. http://dx.doi.org/10.1016/j.jenvman.2014.01.049 0301-4797/Ó 2014 Elsevier Ltd. All rights reserved.

Baumgart-Getz et al., 2012; Pannell et al. 2006; Mbaga-Semgalawe and Folmer, 2000; Turrell and McGuffog, 1997; Ervin and Ervin, 1982). This body of research is important to understanding participation, as it is likely that landholders will need to be comfortable with the proposed conservation activities before participating in a program. The adoption framework also provides a useful indication of the decision making process that landholders might take when they join/do not join an incentive program (Morris et al. 2000).1 It is likely that participation in an incentive scheme will also be influenced by a range of factors, such as the characteristics of the farm business, the scheme structure itself, and personal characteristics beyond attitudes. Brotherton’s (1989) model posits that both the social and economic characteristics of the landholder (“farmer factors”) and the technical and economic characteristics of the scheme (“scheme factors”) are important to participation. The

1 There are alternative names for these stages, such as Pannell et al.’s (2006:3) process of awareness of the problem or opportunity, non-trial evaluation, trial evaluation, adoption and non-adoption/dis-adoption.

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landholder factors can be further split into personal landholder characteristics and those belonging to the property. Wilson (1997) adds “information environment” and “dynamics within the farm district” as important influences. Despite the emphasis on farmer and farm factors, it is important to note that rural landholders may not be producers but rather “lifestyle” property owners who buy properties for non-production related reasons. The framework for influences on participation in Fig. 1 is broad enough to encapsulate the many different factors that can influence participation. There are some property and community characteristics that appear to consistently and positively influence willingness to participate, such as property size (Ma et al., 2012; Frisvold and Deva, 2012; Wilson and Hart, 2001; Beedell and Rehman, 2000; Luzar and Diagne, 1999; Drake et al., 1999), security of tenure (Lambert et al., 2006; Soule et al., 2000; Crabtree et al., 1998), and a more accepting community, perhaps with higher levels of trust/ lower levels of mistrust (Januchowski-Hartley, 2012; BaumgartGetz et al., 2012; Wunscher et al., 2011; DeFrancesco et al., 2008; Richards, 2005; Vanclay, 2004). Programs that are aimed at populations with these characteristics are more likely to have a high participation rate. However, it is generally difficult to generalise about the influence of individual factors e such as demographic characteristics e on adoption and participation, with contradictory results from different programs (Baumgart-Getz et al., 2012). The importance of

the different factors is likely to vary for each incentive program and region. This uncertainty is exacerbated by the considerable overlap between the influences of different factors. Scheme characteristics may offer more opportunity for policy makers to influence the participation outcome. The program characteristics identified in the literature that encourage participation include the level of financial assistance (eg Wossink and van Wenum, 2003; Crabtree et al., 2001; Watkins et al., 1996), providing clear information about the program to reduce uncertainty and improve understanding about the program’s goals (Whitten et al., 2013; Baumgart-Getz et al., 2012; Luzar and Diagne, 1999) and flexibility and attractiveness of activities proposed (Mettepenninggen et al., 2013, Pannell et al., 2006; Rogers, 2003; Wilson and Hart, 2001; Morris et al., 2000). It is important to consider the private benefits of proposed actions and the related incentive to carry them out or not (Pannell, 2008). Often shorter term arrangements are preferred over permanent legal arrangements, perhaps due to the greater flexibility offered under a short term arrangement (Rodriguez et al., 2012; Schirmer et al., 2012; Whitten et al., 2013; Van Putten et al., 2011; Hill et al., 2011; Greiner et al., 2008). This paper uses a case study of a conservation program from Queensland, Australia, to contribute additional information about some of the key factors on this list, namely scheme duration, property size, use of the land, environmental attitude, education, financial support offered, uncertainty, and relationship with government. These are discussed in the results section of this paper. This information can help with various aspects of conservation program design. Firstly, it might be helpful to understand where to target limited efforts in a catchment. Secondly, they can help understand the limitations of a program. For example, if program design reduces the likely participant pool to a certain type of landholder this could be problematic for the desired outcomes. Finally, the research offers insights into improved conservation scheme design, particularly for conservation auctions. 2. Material and methods 2.1. Case study2 This paper uses a case study of Queensland’s Vegetation Incentives Program (VIP). The VIP was run as a discriminatory price, single round conservation auction intended to fund private landholders to protect and manage high quality non-remnant vegetation in Queensland. The Queensland Department of Natural Resources and Water (NRW)3 introduced the VIP, with a $AUS 12 million budget, as part of a financial assistance package that accompanied extensive changes to the State’s vegetation management legislation in 2004. The program was run in three phases in 2004, 2005 and 2006. Greening Australia, an environmental non-government organisation, delivered the VIP in each region. Landholders received a site visit to help them develop a five-year management plan that accompanied the covenant. A very restrictive covenant was designed for the use of the VIP in the first round. This covenant could not be varied between properties and carried significant implications for positive management obligations into the future. Very few tenders were submitted and no tenders were funded as bid prices were considered to be too high for the expected environmental gains. Difficulties associated with phase one led to the introduction of more flexible permanent protection options (along

Fig. 1. Influences on participation. (Adapted from Wilson, 1997).

2 3

This section is based on Comerford (2013). This Department has since changed structure and names several times.

E. Comerford / Journal of Environmental Management 141 (2014) 169e176 Table 1 Summary of the VIP. Southern Far North/Coastal Central/Western South East Phase One Phase Two Phase Two Phase Three Date finished Expressions of interest Applications

July 2005 21 8

Approved 0 Average size 130 property (ha) a

December 2005 58 31 14 11.5

December 2005 26 7 2 2441

June 2006 112 62 (51 people)a 22 130

Some people submitted more than one property and tender.

with the 5 year management plan) in the subsequent two phases. Nearly all participants chose to use a Nature Refuge, an existing covenant program managed by Queensland’s Environmental Protection Agency. Nature Refuges allowed for terms specific to a property. There were some positive management actions in the future in many of the agreements, but these tended to be formulated as continuation of responsible land management practices rather than significant changes. Overall the VIP had a low participation rate. It was not possible to calculate the true participation rate as the total number of eligible properties e those with high value regrowth vegetation e was not known. However, as shown in Table 1 only 110 tenders were received from 97 applicants across Queensland. The majority of the budget was not expended due to this low participation rate. However, there is no baseline for conservation auctions in Queensland with which to compare the VIP. The Environmental Protection Agency’s Biodiversity Incentives Tender/NatureAssist programs that ran at a similar time in Queensland attracted similar levels of participation. The lag time that is often apparent in adoption curves for uptake of a new technology (Pannell et al., 2006) may apply also to participation in a new type of incentive program, meaning that future rounds might have attracted more participants. Of more concern than the total participation rate is that the majority of the participants were clustered into small areas in South East Queensland and Far North Queensland. Only 15 landholders submitted bids from other regions in Queensland. As discussed later in the paper, VIP participants demonstrated a high degree of homogeneity as well. 2.2. Analyses4 This research used both qualitative and quantitative methods of research and analysis. A census of participants in the auction (97 people), as well as those landholders who decided not to progress beyond the expression of interest stage (109 people) provided the bulk of the data.5 This census was in the form of mail-out questionnaires in 2004e2006 that asked about motivations for participation in the VIP as well as social and economic information about the respondent and their property. Questions were both closed and open-ended. The survey of landholders who chose to withdraw is referred to as the “non-participant” survey. As the characteristics of the population are unknown, it is not possible to judge if the

4

The first paragraph of this section is based on Comerford (2013). True non-participants e those that chose not to participate at all e were not surveyed as identifying eligible landholders (i.e. those with non-remnant vegetation on their properties) was not possible at the time of the research due to lack of government data or landholder knowledge of which properties possessed nonremnant vegetation. Although the survey was designed as a census, a small proportion of landholders did not receive their questionnaires. 5

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respondents were characteristic of the population. Respectable response rates of 55% and 57% were achieved for the participant and non-participants questionnaires respectively, so it is expected that selection bias was minimised. Although interviews with landholders were not possible due to probity considerations around the bidding process, nine landholders (some of whom had submitted questionnaires) also voluntarily telephoned the researcher to discuss their experiences with the program in more depth. All but one of these landholders were either ineligible participants or had chosen to withdraw. An additional five semi-structured interviews were carried out with Greening Australia staff, and two with key government staff members. Process observation of the program’s development and assessment panels further enriched the analysis. Quantitative analysis was carried out using SPSS (versions 12.0 and 21.0). Bivariate correlations between participation or nonparticipation and a range of variables were carried out. When the distribution of variables was normal, Pearson’s r, or associate biserial (rbis) or point-biserial (rpb) was used. When the distribution not normal, even when transformed, the nonparametric correlation measure of Kendall’s tau-B (s) was used. A t-test was used to compare parametric variables to test for differences between the means while a ManneWhitney U test (U) was used to compare non-parametric variables and test for differences in the groups.

3. Results and discussion 3.1. Self-reported motivations for participation Questionnaire respondents reported a wide variety of reasons for participating in the VIP. Seven statements querying reasons for participation were presented to landholders. These statements, and the responses, are shown in Table 2, where “extremely important” and “very important” are collapsed into one category, and “not very important” and “not at all important” into another in order to clarify the explanation. Most of the reasons did not attract substantial support. The public and private benefits statements are the only ones that had more responses saying it was important than not. The public benefit statement received overwhelming support, with 98% of respondents saying it was very important or extremely important to their decision to participate in the VIP (301% very important, 67% extremely important). This is an important result that demonstrates the environmental motivation of the VIP participants. The high level of support for the private benefits statement also suggests that landholders are more inclined to participate when they can identify these benefits, which is in line with economic theory (Pannell, 2008) and other program experience in Queensland (Januchowski et al., 2012). A recent survey of Australian landholders revealed many managed native vegetation for financial reasons such as productivity gains (Ecker et al., 2013) (Table 2). Desiring a stable source of income was the least important reason behind participation, with 53% of respondents saying it was not very or not at all important, closely followed by 52% stating that the utility of the income for family members was not very or not at all important. This result indicates that participants were generally not motivated by financial considerations when joining the VIP. This is similar to the results of Farmer et al. (2011) investigated the motivations of landholders choosing covenants in five US states, and found that financial considerations had the lowest motivation. Principle-component analysis was not suitable to investigate any common factors behind participating as indicated by inadequate KMO statistic (0.468).

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Table 2 Self-reported motivations for withdrawing from the VIP (n ¼ 49). Statement

% Extremely or very important

% Not very important or not all important

% Neither important nor unimportant

It will be good to have a secure source of income It’s important to Australia to conserve the bush It’s important to my property’s future to conserve the bush The application process appeared to be reasonable I was not that interested in farming that patch of bush I like the idea of being able to set my own price on the work The extra paid work will be useful for family members

34 98 75 38 24 20 21

53 0 13 11 44 38 52

13 2 13 51 33 42 27

Table 3 Predicting requests for a covenant payment with logistic regression. Statement

% Extremely or very important

% Not very important or not all important

% Neither important nor unimportant

The requirement for permanent protection The process took too long and I lost interest I didn’t have enough time to develop a plan The paperwork was too complicated I didn’t like dealing with GA I didn’t like dealing with NR&M I didn’t think I would get the amount of money I needed I didn’t like having to nominate my own amount of money I was confused by the range of protection options I did not understand the process well enough I didn’t trust the government to fulfil their obligations

57 24 14 45 23 23 47 55 37 52 48

27 59 59 38 50 53 37 31 43 39 39

17 17 28 17 27 23 17 14 20 10 13

3.2. Self-reported motivations for non-participation Landholders withdrew for many different reasons. Eleven statements were presented to these individuals with a Likert scale. The statements and the responses for eligible withdrawers are shown in Table 3. The reasons that received the most support were the requirement for a covenant, disliking the tender process and not understanding the process well enough; with more than half of the respondents stating that these reasons were very or extremely important to their decision to withdraw. The statements that elicited the least support were lacking time to develop a plan, the process taking too long and disliking working with NRW, with more than half of the respondents stating these reasons were not very or not at all important to their decision not to continue. Often an equal number of people found a reason unimportant or important, which is a sign of the heterogeneity of experiences of the VIP. Principal-component analysis was used to analyse the factors underlying the reasons for withdrawing. This scale is reliable, with

Table 4 Rotated component matrix for the reasons for withdrawing scalea. Item

3.3. Landholder characteristics

Component 1

I didn’t like dealing with GA I didn’t think I would get the amount of money I needed I didn’t like dealing with NR&M I didn’t trust the government to fulfil their obligations I didn’t like having to nominate my own amount of money The requirement for permanent protection I didn’t have enough time to develop a plan I did not understand the process well enough I was confused by the range of protection options The paperwork was too complicated The process took too long and I lost interest

a Cronbach’s Alpha of 0.858.6 Three components, or underlying connected groups of variables, emerged after rotation. Almost 70% of the variance was explained by the three identified components, with the majority of the variance (45% of the 70%) explained by component one. Table 4 shows the items and their loadings onto each component. These loadings were all moderately high. Component one was based on the items that centred on distrust. Component two contained dislike of the permanent protection element of the VIP. Component three was made up of items that related to not understanding the program or not having enough time to develop a plan. These three components are discussed further later in this section. Eighteen per cent of eligible non-participant respondents did not complete the “reasons for withdrawing” question, although the majority of these people provided separate comments that gave their reason for not continuing. The qualitative reasons behind nonparticipation included, once again, a dislike of the requirement for a covenant, lack of adequate information about the program, the drawn out process and lack of assistance.

2

3

.909 .853 .784 .679 .617 .838 .434 .921 .871 .759 .610

a Extraction Method: Principal Component Analysis. Rotation Method: Oblimin with Kaiser Normalization. Rotation converged in 11 iterations. Underlined values indicate a double loading on two factors. Loadings highlighted in bold indicate the factor on which the item was placed.

3.3.1. Awareness and knowledge This analysis of the VIP indicates that that understanding a program’s goals and what participation entails is important to the decision to participate. The program’s brochures may not have clearly communicated the intent of the VIP to potential participants. Greening Australia reported that landholders felt the “helping you keep the bush” logo implied that management of remnant vegetation (which landholders are legally obliged to keep) was the aim of the program. Similarly, the VIP’s communication strategy was

6 Bartlett’s test of sphericity and the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy were used to evaluate the strength of the linear association amongst the variables. Bartlett’s test of sphericity was significant (c2 (55) ¼ 149.805, p  0.001), and the KMO statistic was 0.703.

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Table 5 Responses to NEP. Item

Participant (% that agree)

Non-participant (% that agree)

Difference between two groups ManneWhitney (U)

Effect size (r)

The Earth has plenty of natural resources if we just learn how to develop them Plants and animals have as much right as humans to exist The balance of nature is strong enough to cope with the impacts of modern industrial nations The so-called “ecological crisis” facing humans is greatly exaggerated Despite our special abilities humans are still subject to the laws of nature

69.4

47.4

646.5a

0.273

83.7 93.9

84.2 84.2

878 94.5a

0.056 0.805

85.7 93.8

76.3 81.6

235.5a 734.5b

0.659 0.206

a p  0.01, b p  0.05 one-tailed. (n ¼ 87).

undermined by a lack of clear guidelines early in the program, which led to poor information for both GA and landholders. For example, it was not clear how the different permanent protection options would be managed, and this uncertainty appears to have been communicated to landholders. A representative landholder comment was “Information given/available about the covenants is not very comprehensive and has put a lot of people off participating”. More people who pulled out of the program reported that they did not understand the selection process for the VIP as compared to participants e 45% compared to 38%. This difference was not statistically significant using a one-tailed ManneWhitney test (U ¼ 862.5, ns, r ¼ 0.086). Despite the lack of statistical significance, perhaps due to low sample size, 52% of non-participant respondents stated that not understanding the process well enough was very or extremely important to their decision to pull out of the VIP. The third component of the principal-component analysis also related substantially to items about confusion. 3.3.2. Previous experience The VIP participants had high levels of previous experience in NRM programs, reinforcing the view from other research that previous experience increases the likelihood of a landholder participating in another program (eg Ma et al., 2012; Fielding et al. 2005; Wilson and Hart, 2001). Eighty per cent of participant respondents had had experience in at least one government NRM program, while 64% of non-participant respondents had participated in another program. This is higher than would be expected with a typical landholder, as indicated by a recent national survey that found that 36% had participated in Landcare (a wellestablished community based program rather than a funding mechanism) and 16% in the Federal Government’s leading funding program Caring for our Country (Ecker et al., 2012). 3.3.3. Attitude It is difficult to link attitudes to behaviours such as participation in a conservation program, however this analysis of the VIP indicates that a positive attitude towards the environment did influence participation behaviour. Environmental attitude was measured using an abridged version of the New Environmental Paradigm (NEP) (Dunlap et al. 2000). This set of questions measures the ecological worldview of participants rather than their attitude to the environment in general, but can provide insight into the differences between respondents. The results from the VIP suggest that a positive ecological worldview does encourage participation in environmental incentives programs. A five-point Likert scale ranging from “strongly disagree” to “strongly agree” was established. Table 5 displays the responses to the NEP scale presented in the questionnaires. Items one, three and four were reverse coded (ie disagree became agree). Although there is no population baseline against which to compare the score, this average appears to be high. As shown in Table 5 all the individual

NEP items except for statement two have significantly different responses between participants and landholders who withdrew when tested using the ManneWhitney test. As a result of these different responses, non-participants had a lower total NEP score than participants (U ¼ 664.5, p  0.05). The more positive ecological worldview of participants may have induced them to participate compared to the non-participants. Within the participant group, the proportion of agriculture on a property had a significant relationship with NEP (s ¼ 0.214, p  0.05 one-tailed). This negative relationship is not surprising as landholders who have bought their rural property for nonproductive purposes would appear to be more likely to have a pro-environmental worldview. Moon and Cocklin (2011) also found that non-production landholders in Queensland displayed more pro-environment views using a NEP scale. These results are consistent with Dunlap et al. (2000:436) finding farmers were likely to have lower NEP scores than the general population. This relationship was non-significant within the non-participant group, however at a higher level of significance, there was generally a negative relationship between being dependent on the property and the NEP score. Having no off-farm income was negatively and moderately correlated with the NEP score (rpb ¼ 0.237, p  0.1) and the greater the proportion of agriculture on the property the lower the NEP score (s ¼ 0.157, p  0.1 one tailed). This reinforces the relationship between the proportion of agriculture on a property and the NEP score in the participant group. 3.3.4. Education VIP applicants had high levels of formal education. Almost all had finished high school (91.6%), almost half of them had bachelor degrees or higher and 22% had post-graduate degrees. Rates were also high amongst non-participants e 73% had finished high school, 41% had bachelor degrees or higher and 16% had post-graduate degrees. These rates are far greater than the Queensland average of 37% for grade twelve completion, 10.8% for bachelor degrees and 1.4% for postgraduate degrees (OESR 2004). The extremely high education levels of the VIP participants supports the concept of formal education increasing capacity to participate in environmental incentive schemes that some other researchers also found (eg Ma et al., 2012; Ecker et al., 2012). As the characteristics of the population of VIP participants and non-participants are unknown, it is not possible to judge if selection bias of educated landholders to the questionnaires occurred. However, these results indicate that even applicants to the VIP who did not progress with the program were not representative of the wider population. 3.4. Property characteristics 3.4.1. Agricultural production The VIP provides additional support for the concept of nonfarming landholders being more willing to join conservation programs. Most of the people attracted into the program were

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generally not landholders engaged in agricultural productive enterprises. Just over half (57%) of the respondents reported having any agricultural production on their land, with an average across all participants of 27% of a property under agricultural production. Only 10% of respondents had 95% or more of their property under agricultural production. More non-participants had agriculture on their property than those who submitted a full bid. Seventy-four per cent of respondents to the non-participant questionnaire had some agricultural production on their properties, with an average across all non-participants of 38% of land under agricultural production. Nearly all of these respondents had 10% or more of their property under agricultural production. The difference between the participants who said they had over 30% agriculture and non-participants who said the same was statistically significant (c2 (1) ¼ 2.835, p  0.05 one-sided). This overrepresentation of non-agricultural producers is likely to be a response to the requirement for permanent protection in the form of a conservation covenants, as agricultural producers would have faced higher opportunity costs in the future than small scale hobby farmers or lifestyle blocks. There is other evidence from Queensland that non-production landholders prefer permanent conservation options compared to production landholders (Moon and Cocklin, 2011). In addition to the higher proportion of agriculture amongst those who pulled out, it is likely that having a high opportunity cost turned potential participants away from the VIP even before they submitted an expression of interest. 3.4.2. Property size Evidence from this analysis of the VIP does not support results from other studies that landholders with larger properties are attracted into environmental incentives programs. The average self-reported size of participant’s properties was 2017 ha and median 36 ha (this large difference was due in part to an outlier in terms a bid from a large business with 2.8 million hectares). The average size of non-participant properties was 717 ha, and the median 65 ha. Although property sizes were different between the participants and those who didn’t submit a bid, this difference in property size was not significant (t(86) ¼ 0.406, ns, r ¼ 0.04, ns). This was an unanticipated result as property size is one of the few factors influencing participation that the literature reasonably consistently suggests positively influences participation in a devolved funding program. In the case of the VIP, it is likely that the preponderance of lifestyle properties rather than agricultural producers may have resulted in smaller properties being attracted into the program, as their low opportunity cost outweighed the potential gains from economies of scale. It is also possible that true non-participants e those who did not submit expressions of interest e may have had different property characteristics again.

that being able to nominate their own amount of money was important to their decision to participate. Landholders with high opportunity costs, such as those with a high proportion of their land under agricultural production and low off-farm income, were not attracted to participate despite the conservation tender mechanism. 3.5.2. Auction mechanism The VIP indicated that the funding mechanism itself can impact participation levels. The competitive tender mechanism was a relatively new method of allocating funds for NRM in Queensland, and may have been off-putting to potential participants. The risk of participating in a new program and the uncertainty over the bid amount led to reduced participation. Greening Australia staff reported that many landholders were confused over the lack of financial guidance, particularly with regards to the covenant payment. The questionnaire data supports the idea that the mechanism limited participation, with 45.7% of non-participant respondents saying dislike of nominating their own amount of money was very or extremely important to their decision to not continue with the VIP. A participant landholder commented that “tendering process a bit of stab in the dark, with few, if any, precedents re "$’s value" for conservation covenants.” This is consistent with the experience of landholders in some other auctions who have also expressed uncertainty over forming bids (Burns, 2011; Hill et al., 2011; Ulber et al., 2010). 3.5.3. Uncertainty and risk The analysis of the VIP suggested that landholders are less likely to participate when a program is not credible or reliable. Due to limited design time and high staff turnover within NRW, the rules of the VIP changed considerably even within the different phases, which discouraged participation and increased uncertainty for landholders. The permanent protection options changed from the strict covenant of phase one to a range of different options in phase two to the eventual preference for Nature Refuges. The various options were introduced too late in phase two to allow for new expressions of interest, and confused many potential participants, especially as it was not made clear which of the options was preferred by the Government. Greening Australia staff were often confused as to which activities were eligible, what the selection rules would be and what advice they could give. As a result, they were not able to clearly communicate accurate information to potential participants. One participant reported “This has been a DNR&M ‘make the rules up as you go’. At my submission of tender was 2 options for covenants, within days there 5 options!”. The importance of uncertainty to non-participation was reflected in the principal-component analysis of the self-reported reasons for withdrawing from the VIP. Much of the risk associated with the VIP was linked to the covenant, and is discussed in Section 3.5.4.

3.5. Scheme characteristics 3.5.1. Level of financial support It is possible that the use of a tender mechanism could mitigate the barrier of inadequate financial support for participation. However, this research did not support this idea. Landholders were able to nominate whatever sum they thought they needed. However, competition and program rules constrained the amount that would be funded so landholders with high opportunity costs were less likely to be successful unless they had ecologically desirable properties. Some landholders were aware of this restraint and chose not to participate. Forty-seven per cent of respondents to the non-participant questionnaire said that “I didn’t think that I would get the amount of money I needed” was important to their decision not to submit a bid. Only 20% of participant survey respondents said

3.5.4. Scheme duration e management plan and use of a covenant7 There were two elements to the duration of the scheme for participants. The first was the five year management plan which required participants to outline their management plans and its costs in detail for five years. It’s possible that this plan deterred some potential participants, as illustrated by one landholder who said “I felt it too difficult to specify exactly for 5 years in advance what I would do when factors (e.g. dry weather) dominate which I can’t control.” This type of concern was exacerbated by a lack of clear guidelines relating to events such as fire and drought. However, GA did not describe a high level of concern over the

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Some of the information for this section is from Comerford (2013).

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development of the five-year management plan. Indeed, 32% of questionnaire respondents reported that they had developed their management plan alone, with another 46% reporting that most of the plan was their idea. It is possible that the widespread previous experience with other NRM programs helped participants to be familiar with appropriate management plans and short term contracts. Additionally, the flexibility inherent in the management plans was likely to have increased attractiveness to landholders (Mettepenningen et al., 2013; Wilson and Hart, 2001). The requirement for a form of permanent protection was more important in its impact on participation. The negative impact of the covenant on participation in the VIP demonstrates that the duration of an environmental incentives scheme is crucial to participation rates. The first phase covenant, which was very strict, was widely felt by Greening Australia and departmental staff to be the main cause of the low participation rate. Not only did it lack flexibility, but landholders probably mistrusted that the government would renegotiate the management agreement after five years (when the original management agreement expires) which would leave them operating under the covenant’s restrictions. One landholder sent a letter saying that they were withdrawing due to the covenant requirement before the non-participant questionnaires were even developed. Another landholder decided to participate but commented that “We feel that the covenant as it stands is draconian and needs to be flexible to suit each applicant’s needs. We need to realise that if the government wants this to happen, then they need to work with landholder not dictate terms”. Even in later rounds, when the covenant restrictions were relaxed, the requirement for permanent protection had a large impact on participation rates. The most important reason for not continuing with the VIP given by non-participants was the requirement for permanent protection, with 57% of respondents saying it was very important or extremely important to their decision to withdraw. This was reflected in the importance of this factor in the principal-component analysis of the self-reported reasons for withdrawing. Ongoing management obligations implicit in most of the covenants, such as the need to control weeds, may have deterred some potential participants. Although the first covenant was not the sole option after the first phase, the second and third phase covenants still contained some obligations for landholders to continue to manage their land responsibly. This had financial and legal implications for landholders. One person who withdrew commented “I got the impression that Greening [Australia] A. take the covenant and give me some money to look after it but only for 5 yrs and I can’t do anything on it. Q. What happens after 5 years it’s not mine but I still have to pay to look after it.” There was also a fear that the government would punish participants who failed in their covenant obligations. A landholder who pulled out commented that he was concerned that if he did not keep weeds out of his property and it had a covenant on it, the government might be able to justify taking it over. Another commented “I feel safer revegetating my property myself. If I fail I haven’t failed in an agreement with the govt. An obligation I am held to for an eternity.” The covenant also attracted some participants. Greening Australia staff reported that some landholders were eager to place a covenant upon their property in order to preserve their vegetation. Some landholders commented positively about the covenant on their questionnaires. For example, one person commented that “it’s the only way to stop future owners from clearing it again”. 3.6. Community characteristics Anecdotal evidence reported widespread distrust of the Queensland government in rural areas when the VIP was introduced, particularly after the State introduced changes to the

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vegetation legislation that significantly reduced the amount of land clearing possible. Landholders felt that their property rights had been reduced unfairly by the government, and without adequate consultation. This is reflected by the submissions from landholders to the Productivity Commission inquiry into the impact of native vegetation legislation (2004). For example, one response in the “Used to have an excellent relationship with DNR&M. Relationship is now one of mistrust and anger”. The VIP suggests that trust in the government is an important influence on participation. Greening Australia staff generally felt that there was a relatively high level of distrust of NRW and the state government in the community, particularly regarding the covenant. Forty-eight per cent of respondents to the nonparticipant questionnaire said that not trusting the government to fulfil their obligations was important to their decision to withdraw. This was reflected by the second component of the reasons for withdrawing scale relating to distrust. Of course, it is possible that participants also distrusted the government. Moon et al. (2012) found that participants in biodiversity conservation programs in Queensland had lower levels of distrust in the government than non-participants, but noted that some participants were willing to continue with a program despite their distrust. 4. Conclusion Examining the VIP participants informed theory on participation in incentive schemes. The applicants to the VIP appear to be from a moderately homogenous sub-set of the community. They were highly educated and had previous experiences with NRM programs. Landholders who chose to withdraw had more agricultural production on their properties, which indicates the importance of opportunity cost to the decision to participate. Contrary to expectation, landholders with larger properties were not more likely to participate, perhaps because of the preponderance of lifestyle properties. Participants consistently displayed a positive environmental worldview and were participating because of the chance to help the environment. They had a higher score on ecological worldview scale than non-participants. Both participants and non-participants appear to have been far more educated than the average Queensland resident. The landholders who chose to withdraw from the program had a variety of reasons for making the decision. One of the most important factors was the requirement to commit to permanent protection. Distrust in the program also appeared to be an important factor in reducing the participation rate. The conservation auction mechanism did not appear to assist with participation. Instead, concern over forming a bid and confusion over the operation of the mechanism was widespread. These observations from the VIP contain lessons for conservation program design. The VIP appealed to a narrow subset of the rural population. This indicates that conservation programs run with comparable elements as the VIP may also attract a similar group of landholders. Depending on the objectives of the scheme in question, additionality may be limited due to the committed nature of the landholders. The impact on the natural environment may also be limited if this pool of participants is small. Alternatively, if funding is restricted, then understanding where participation is likely to be highest could be useful for targeting support. The reasons that applicants withdrew emphasises that the careful choice and design of a market based instrument is crucial to ensuring high participation. In particular, a program designer should be aware that choosing to use a covenant may restrict the pool of potential participants. Using a tender mechanism may require more active engagement from the program manager to help

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reduce uncertainty over participating. For example, communication methods such as workshops may be able to help with the engagement process with landholders (Whitten et al., 2013; Rolfe et al., 2009). Distrust of the government is harder to deal with in the short term, but similarly better communication methods could help alleviate this problem. For example, the terms of the covenant could be clearly explained. Although having a high participation rate is important to the success of a conservation program, particularly one that relies on competition to generate cost-effective outcomes, caution is required. The target participation rate still needs to be suited to the project’s size. It may be discouraging to landholders if most applicants are rejected due to the budget limitations, which could lead to poorer engagement in future programs. Acknowledgements Thanks to Jackie Robinson and John Rolfe for their help with this research, and the three anonymous reviewers of the draft of this paper for their constructive comments. Thanks also to the participants in the VIP who generously shared their experiences with me. Funding for the research was provided by the Australian Government’s National Action Plan for Salinity and Water Quality. References Baumgart-Getz, A., Prokopy, L.S., Floress, K., 2012. Why farmers adopt best management practice in the United States: a meta-analysis of the adoption literature. J. Environ. Manage. 96, 17e25. Beedell, J., Rehman, T., 2000. Using social-psychology models to understand farmers’ conservation behaviour. J. Rural. Stud. 16, 117e127. Brotherton, I., 1989. Farmer participation in voluntary land diversion schemes: some observations from theory. J. Rural. Stud. 5, 299e304. Burns, E., 2011. Environmental stewardship program: where we have been and where we are going. In: Designer Carrots: National MBI Forum. 28 July 2011, Canberra. Comerford, E., 2013. The impact of permanent protection on cost and participation in a conservation programme: a case study from Queensland. Land Use Policy 34, 176e182. Crabtree, B., Chalmers, N., Barron, N.J., 1998. Information for policy design: modelling participation in a farm woodland incentive scheme. J. Agr. Econ. 49, 306e320. Crabtree, B., Chalmers, N., Eiser, D., 2001. Voluntary incentive schemes for farm forestry: uptake, policy effectiveness and employment impacts. Forestry 74, 455e465. Defrancesco, E., Gatto, P., Runge, F., Trestini, S., 2008. Factors affecting farmers’ participation in agri-environmental measures: a northern Italian perspective. J. Agr. Econ. 59, 114e131. Drake, L., Bergstrom, P., Svedsater, H., 1999. Farmer’s attitudes and uptake. In: Huylenbroeck, G., Whitby, M. (Eds.), Countryside Stewardship: Farmers, Policies and Markets. Pergamon, Oxford; New York, pp. 89e111. Dunlap, R.E., Van Liere, K.D., Mertig, A.G., Jones, R.E., 2000. Measuring endorsement of the new ecological paradigm: a revised NEP scale. J. Soc. Issues 56, 425e442. Ecker, S., Thompson, L., Kancans, R., Stenekes, N., Mallawaarachchi, T., 2012. Drivers of Practice Change in Land Management in Australian Agriculture, ABARES Report to Client Prepared for Sustainable Resource Management Division. Department of Agriculture, Fisheries and Forestry, Canberra. Ervin, C., Ervin, D., 1982. Factors affecting the use of soil conservation practices: hypotheses, evidence, and policy implications. Land Econ. 58, 277e292. Farmer, J.R., Knapp, D., Meretsky, V.J., Chancellor, C., Fischer, B.C., 2011. Motivations influencing the adoption of conservation easements. Conserv. Biol. 25, 827e 834. Fielding, K., Terry, D., Masser, B., Bordia, P., Hogg, M., 2005. Explaining landholders’ decisions about riparian management: the role of behavioural, normative and control beliefs. J. Environ. Manage. 77, 12e21. Frisvold, G.B., Deva, S., 2012. Farm size, irrigation practices, and conservation program participation in the US southwest. Irrig. Drain. 61, 569e582. Greiner, R., Gregg, D., Miller, O., 2008. Conservation Covenants and Conservation Management Agreements in the NT: a Pastoralists’ Perspective. In: Report to the Northern Territory Department of Natural Resources. Environment and the Arts.

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