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The widespread clearance of native vegetation has been identified as one of the major environmental issues facing Australia. Impacts of clearing include dryland salinity, weed invasion, soil erosion, soil structural decline and the loss of species. Development of effective polices to deal with remnant native vegetation (RNV) decline has been hampered by lack of detailed data on the economic benefits and costs of RNV conservation. This study measured the on-farm benefits and costs associated with RNV in the two study areas, the northeast Victorian catchment and the Murray catchment of NSW. Data were collected using landholder surveys. The most important economic benefits from RNV under current management regimes in the Victorian study area were productivity effects associated with prevention of land degradation, firewood production, and for the NSW study area, stock and crop shelter. The most significant cost in both study areas was weed management. A proposed conservation management scenario that included fencing of the RNV, and limitations on grazing and firewood and post removal would negatively effect most of the survey participants. The differences between the net present value (NPV) of the current management regime maintained over a 40 year period, and the NPV of the proposed scenario were large and negative. For Victorian participants, the marginal effect of the conservation proposal was - $2 million, and for NSW participants -$15 million. In both study areas, the incremental economic costs of the scenario outweighed the incremental economic benefits for at least 89% of participants. This study confirmed that one of the major barriers to protecting RNV is the economic costs associated with conservation management. A large proportion of participants cannot expect a positive return from investing in RNV conservation. Any policy approach to achieve conservation objectives for RNV requires significant financial incentives for landholders to undertake conservation activities.


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