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Abstract
Farm and catchment managers in Australia face decisions about controlling invasive
native species (or scrub) which may infest agricultural land. The treatment of this land
to remove the infestation and re-establish native pastures is likely to be expensive for
landholders. Yet there are potential social benefits from such remediation and so a
policy question arises of what to do to about facilitating such change. New South
Wales state government legislation addresses this issue through regulations, and the
Catchment Management Authorities are responsible for administering public funds to
achieve associated natural resource improvements. However, the extent of the private
costs and social benefits associated with such changes are not known, which
precludes benefit-cost analyses using the traditional welfare economics framework.
This paper reports results of a social and private economic analysis of the impacts of a
typical infestation remediation decision. We show that for the landholder the private
costs exceed the benefits achieved from increased livestock productivity. However,
there are social benefits expressed by the willingness to pay by members of the local
catchment community for improvements in native vegetation and biodiversity. When
these social benefits are included, the economic analysis shows a positive social net
benefit. This raises questions of how to reconcile the public and private accounting,
and whether any changes to policies, regulations or procedures for natural resource
management in New South Wales are warranted.