Introduction

When we sell a car we have to get a pink slip to indicate the condition of the car. When we buy a house, and ask for bank finance, we are often required to have a building assessment to show that the asset is sound as loan security. Yet when we buy or sell rural land, there is no formal environmental assessment asked for or given. This paper addresses this issue.

You may well ask why we would want another, what may seem to be, expensive bureaucratic hurdle to cross when we are buying or selling rural land. After all, don't we know from a close and "experienced" inspection what the land is like? We know from the vendor and the agent its carrying capacity, its crop yields, and the state of land degradation. In any case, we have never needed a formal land condition assessment in the past, so why do we need it now? I am sure that many of you will say that this is another waste of time and effort. Maybe it is, but I think this is changing. I will put the situation before you as simply as I can and then ask you for your views.

The aim is to come up with something that is useful and helpful to the rural community, as well as something that will assist in improving the environment. That is the business of the Soil Conservation Service (CALM).

Jonathan Chancellor, the property editor for the Sydney Morning Herald, in an article in the Saturday edition (14 August 1993) indicated that the percentage change in the return on assets for rural land for the period 1988-1993, was an increase of 15%, whilst inflation for the same period increased 30%. By comparison, Sydney taxi plates experienced about a 45% increase for the same period. For the year ended June 1993, with inflation being 1 to 2%, the percentage change in return on assets for rural lands was a decrease of 5%. With our asset value and returns decreasing, I consider it very timely that we thoroughly investigate our farm environment assets to assist us to make sound property management planning decisions.

Davis (1993) has some good advice concerning the purchase and management of rural properties:

"Whether it is a hobby farm or a major rural holding, it is an area requiring specialist advice. This is especially so if the holding is to be the sole or main source of future income. Many persons retire to such holdings in the expectation that they, with part-time assistance of family members, will be able to run the operation as a viable economic entity. If you do not have a rural background in that particular activity, you will have ongoing problems."

How true it is that the vision splendour turns to ashes, because of ill informed decisions based on misinformation and lack of knowledge, even if you do have a rural background.

In considering the human dynamic of the farm environment "pink slip" concept, I find that 67% of the general population and 73% of those directly involved in farming are people who are mainly interested in the realities of a given situation. Reality for them is what can be observed, collected, and verified directly by the senses - by seeing, hearing, touching, etc. Because the kind of judgement they trust is thinking, they make decisions by logical analysis, with a step-by-step process of reasoning from cause to effect, from premise to conclusion (Briggs-Myers et al., 1989).

Without ignoring the intuitive and feeling aspects of decision making, it is clear that there is an under-emphasis on the sensing/thinking approach when investigating property management planning decisions.

It is in this context that the farm environment "pink slip" concept was evolved as a method of certifying resource status of a rural property at a given time, using the appropriate and state-of-the-art technologies to achieve objectivity and consistency by competent environmental or agricultural managers, consultants, and practitioners. A more professional nomenclature would therefore be a Property Environment Inventory (PEI).

In this paper, I look at the assessment of land degradation issues, and farm water resources. The PEI is viewed in the context of:

• Economic Imperative

• Legal Responsibilities

• Winners and Winners

• Community and Political Aspects

• Proposed Implementation and Costs

I propose to be provocative, seeking your response to the concepts delivered, the validity of the concept, stakeholder interest, as a management tool, cost effectiveness, the advantaged/disadvantaged players, and applications.

The Economic Imperative

Historically, the over-riding practice in land management has been determined by relatively predictable productivity, based on good commodity returns. Between 1945 and 1969, land values increased, based on the perceived and/or actual increases in commodity returns. With the introduction of wheat quotas and the collapse of wool returns, the factors affecting good productivity influencing land values came into question (Kemp, personal communication, 1993).

The economic effect of land degradation attracted little consideration, in that the effects of capital gain and inflation covered up or masked any land value diminution caused by land degradation. The advent of successive technologies also masked the effects of land degradation, as discussed and illustrated by Burch, Graetz, and Noble (1987) (Figure 1). The rise in wheat yields since 1900 is associated with the use of fertilisers, the introduction of clovers and pasture/crop rotations, variety improvements, and mechanisation. The decline in yields, and the plateau of yield curves, despite the increase in fertiliser applications, indicates the effect of land degradation on yields.

Figure 1: Mean decennial wheat yields 1870-1980, and the history of superphosphate application in Australia (from Burch et al., 1987)

The concepts of "The land will always produce", and "What you see is what you get", were prevalent in the 1960s, the 1970s, and the heady days of the 1980s, with property sales. In the back of people's minds was the idea of capital gain; "whatever happens, if things don't work out I can always sell, and come out in front". The misconception of using capital gain to cover the losses sustained because of reduced returns and reduced productivity due to increased degraded lands, needs to be considered in the context of the times. Other factors influencing returns include fluctuating to poor commodity prices, increases in interest rates and taxes, and seasonal aberrations. The net result is that thousands of farmers have not benefited from any perceived capital gain but, rather, have lost everything.

The visible detriments of land degradation, including gully erosion, wood shrub infestation, mass movement and, to a lesser extent, sheet and rill erosion, are usually appraised and accounted for when a property is valued for sale or purchase, loan application or review, or for rating purposes (Kemp, personal commmunication, 1993). These issues were "accepted", as part of the farm environment with any land market deal.

In the 1970s and the 1980s substantial efforts were made to reduce farm inputs to improve productivity, whilst at the same time giving consideration to land degradation issues, for example, the Conservation Farming Program.

The involvement of farmers in adopting these techniques, and implementing other land degradation management strategies, is limited by cash availability and the affordability of such measures. Whilst there were and are taxation concessions, and low interest loans to encourage farmers to undertake land degradation management measures, such concessions and incentives are only effective if cash flow and positive net income exist (Haynes, 1985).

A study by King and Sinden (1988) showed that soil conservation structural works were the "minimum works necessary to conserve soil and mitigate erosion". The study found that there was a benefit to be derived in the land market, by having these works done, in comparison with properties without the works. The "minimum works" only addressed the "visible detriments" of land degradation issues, depending on appropriate land management by the owner to complement the structural works.

The current situation is that commodity returns are depressed, productivity has declined, causing land values to reduce. The land degradation scars of past productivity excesses are now more evident, not only the "visible" issues, but the "invisible" land degradation issues, including salinity, acidity, soil structure decline and rising water tables.

The effect of the land degradation issues, particularly the "invisible" issues, are long-term. The effect of this in terms of future productivity and future land values is highly significant in terms of sustainable land use.

Fraser and Greeves (1990) estimated in 1987-1988 that the gross value of production lost due to soil acidity as being $13.2 million in the Wagga Wagga area for wheat, oats and barley crops. Their discussion evolved around a 50% reduction in crop yield due to soil acidification, with a pH reduction from 5.0 to 4.6 (CaCl2).

In pastures, problems associated with acidity in south-eastern Australia include poor establishment and persistence of lucernes, and the degradation of subterranean clover pastures, leading to reduced animal productivity and lower crop yields after pasture rotations (Burch et al., 1987).

Areas studied by Williams (1980) show a decline in soil pH or soil acidification with long term use of superphosphate on subterranean clover pastures. The pH was observed to reduce progressively from about 6.0 for unimproved land to 4.8 or less after fifty years or so.

Burch et al. (1987) assert that the implications of these findings are now serious for extensive areas of highly productive (or what used to be highly productive) agricultural land.

Lime as a soil ameliorant can be used in part to correct the effects of acidity, but the cost of providing continued treatment to maintain plant productivity and yield may be beyond the bounds of sustainable land use.

The economic loss due to soil structure decline is difficult to cost in direct terms, as other agronomic factors are more obvious. Soil structure affects the ability of the soil to hold available moisture for plant use. A variation in porosity or bulk density of the soil due to soil structure decline will result in plants being unable to access needed moisture, either by the inability to penetrate compacted sub-soils or the soil not being able to hold available water.

Work done by Murphy (1990) indicated yield reductions of 200 to 300 kg per hectare, in 50% of years, due to the loss of usable rainfall as runoff because of low infiltration rates. Yield reductions of 300 to 1000 kg per hectare, depending on soil type and the season, have been attributed to poor seedbed condition due to soil structure decline.

Closely related to soil structure decline is soil loss due to erosion, mainly sheet and rill, either by water runoff or wind. Ten millimetres of soil over a hectare contains 2 kg of available phosphate and 8 kg of available nitrogen (Murphy, 1977). Nutrient replacement costs could be as high as $150 per hectare.

Soil structure decline and soil loss can have a large effect on productivity on many soils. In the current economic climate we cannot afford to ignore the risks with unprotected lands exposed by successive cultivations to soil structure decline and soil loss (Thorne, 1992).

Reduction in yields due to salinity vary depending on the seasonal condition and the variety of the species affected. In 1991, an estimated 200 hectares (plus) was out of crop production, with another 30,000 hectares affected by salinity in the Goran Basin area (Taylor, 1991). In the Inverell area, an estimated 5000 hectares of pasture land was out of production and a further 10,000 hectares of pasture was affected to the extent that production was reduced by 30%.

Some basic formulae have evolved throughout the economic discussion. The assumption I have made is that the land use is agricultural production, and not, in the worst case scenario, sub-division and sale, a land use very often taken, particularly within a few hours driving home time from major urban centres.

1. Land Degradation Increase = Productivity Decrease

LD ↑ = P ↓

2. Productivity Decrease = Land Value Decrease

P ↓ = LV ↓

If, through appropriate land management based on objective and consistent property status assessment, we can reduce the effect of land degradation then,

3. Land Degradation Decrease = Productivity Increase

LD ↓ = P ↑

4. Productivity Increase = Land Value Increase

P ↑ = LV ↑

I see that there is an urgent need to objectively assess and measure the status and degree of land degradation for economic purposes in production decision making, valuations, and asset protection. There are strong implications for managers, owners, prospective purchasers, financial institutions, real estate agents, and government agencies involved in property management planning to assess the current status relative to advice given and decisions made.

The Legal Responsibility

I am not a solicitor, nor do I profess to be an expert with any degree of competence in legal matters. It is in this context that I present some views of legal responsibility in relation to the PEI.

Whilst there is no legal obligation to obtain a PEI, as with a motor vehicle, there are several legal responsibilities and obligations to which the application of a PEI would facilitate its achievement.

There are two main areas of legal impact affecting the farm environment. First there is advice given by professionals, either for fee or as a service, under Common Law or Tort, dealing with negligence, duty of care, and breach of duty. Second there is the case of a property being available in the land market, with misleading or deceptive conduct, error or misdescription and false representations under the Commonwealth Trade Practices Act (1974), and the Fair Trading Act (NSW) (1987).

In some circumstances, if a person negligently makes a statement of fact, or gives advice to another, the other can recover damages resulting from action taken in reliance on the statement or advice (Boulton, 1990). The kind of situations that may occur are many. A person may buy land having been advised by the local council that the land is not adversely affected by impending resumption; or a person may purchase a property on the advice from an agricultural consultant that the carrying capacity is greater than it really could be expected to be.

Boulton (1990) gives some examples of professions in which the duty might arise and the situations in which it might arise:

(a) valuers - in giving a valuation of a property;

(b) accountants and auditors - in the preparation of accounts of a company;

(c) bankers - for advice as to the financial standing of a client;

(d) solicitors and barristers - for advice as to the legal rights of persons;

(e) real estate agents - for statements, descriptions and representations given with regard to a property (Davis, 1993);

(f) agricultural consultants - for advice as to the ability of pastures and crops to yield beyond what could be reasonably expected;

(g) soil conservationist - for advice as to the water holding capability of soil material at a dam site.

Most actions in this regard are based solely in Tort. In Australia, the law in relation to such matters is divided into three areas:

(a) physical damage due to carelessness in statement or action;

(b) economic loss due to careless statement; and

(c) economic loss due to careless conduct.

(Davis, 1993).

In New South Wales, where a person who suffers damage as a result of the negligence of a member of a profession was a client of the professional person by reason of having made a contract with the professional, it would appear to be the law that the person can sue in both Tort and Contract in respect to damages (Boulton, 1990).

Justice Gibbs said in Shaddocks vs Parramatta City Council (1981) 55 ALJR, and even before that case, settled by Hedley Byrne and MLC vs Evatt (1968) CLR, "that a person can be liable for financial loss resulting from a negligent mis-statement of fact or opinion, although the mis-statement was honestly made, and although there was no fiduciary or contractual relationship between the parties".

Where person (A) knows, or ought to know, that the other party (B) relies on him (A) to take such reasonable care, and may act in reliance on the advice or information which he (B) is given, and unless it would be reasonable for that other person (B) not to rely or act, he (A) may be liable for damages.

Davis (1993) explains that a duty of care will be present if there is an undertaking, expressed or implied, that care would be used in giving information or advice. If a person claims to have the necessary skill and competence to give advice in a particular area of expertise, comparable to those in the business, "the law requires him to make good his claim". In the law of negligence, standards of care are always objective.

It is in the context of this objectivity that the PEI is able to assist the professional to adequately discharge the duty of care.

With regard to property in the land market, the "Contract for the Sale of Land - 1992 edition" clearly stipulates the conditions of the sale. I find that it is essential to read the conditions, even on standard forms, so as to more fully understand rights and obligations of the contract.

Clause 6, Error or misrepresentation, states "The purchaser can claim (but only before completion) compensation for an error or misdescription in the contract (whether as to the property or as to the title or not)." The obligation on the vendor is to make full disclosure under the Conveyancing Act (1919) and the Conveyancing (Vendor Disclosure and Warranty) Regulation (1986).

Schedule 1 of the Contract draws the vendor's attention to several certificates and documents required before the sale of the property can proceed. Attention is also drawn to numerous Acts and Government Agencies to whom referral is advised, to seek clarification on matters that may affect the rights of the parties in the Contract. An example of such a referral is an enquiry under the Soil Conservation Act 1938, requesting "information as to whether the undermentioned land is in any way affected by the provisions of the Soil Conservation Act, 1938". Failure to seek such information may affect the rights of the purchaser, in that provisions under Section 21C of the Act prohibit the destruction of trees in defined categories of Protected Land.

The information may influence the decision to purchase, depending on the aims and objectives for the proposed purchase.

Clause 12, Certificates and Inspections indicates that "The vendor authorises the purchaser, subject to the rights of any tenant -

1. to have the property inspected to obtain any certificate or report reasonably required;

2. to apply (if necessary in the name of the vendor) for any statutory certificate or a copy of any statutory approval, certificate or consent in respect of the property; and

3. to make one pre-completion inspection of the property".

It is under this clause that a PEI inspection could be conducted. Refusal to comply with such an inspection, reasonably required, may result in a breach of the conditions of the Contract.

Apart from land market issues, there are several Acts that affect or impact on environmental issues about which owners, managers, consultants, etc, should be aware (Carlos, 1993). These include:

(a) Environmental Planning and Assessment Act (1979);

(b) Endangered Fauna (Interim Protection) Act (1991);

(c) Soil Conservation Act (1938);

(d) Forestry Act (1916);

(e) Rivers and Foreshores Improvement Act (1948);

(f) Clean Waters Act (1916); and

(g) National Parks and Wildlife Act (1974).

Davis (1993) suggests some additional Acts:

(h) Rural Lands Protection Act (1989);

(i) Dividing Fences Act (1951);

(j) The Catchment Management Act (1989); and

(k) The Water Act (1912).

Mecham (personal communication, 1993) considers the importance of the PEI in clearly ascertaining the title to the land. Many properties have portions of Crown Land (albeit they may be small), attached to, or within the boundaries of freehold land. For example, the Wagga Wagga office of the Department of Conservation and Land Management, the Hay office and the Griffith office administer 1150, 848, and 991 perpetual leases respectively. Searches of title, ownership, and conditions of the leases are in many cases inadequate to facilitate the proper negotiation of transactions including rental arrears due to transfer of title and conversions. The conditions affecting Crown leases may affect the purchase price on conversion or transfer of lessee.

In respect of Crown lease land, the following Acts are relevant:

(a) Crown Land Act (1989);

(b) Crown Land (Continued Tenures) Act (1989).

Knowledge and application of relevant parts or sections of the Acts mentioned above are important to the good management and sustainable land use of agricultural lands within a total catchment management context.

Whether it be to assist a vendor disclose, or a prospective purchaser seek a property inspection report, or an agricultural consultant or adviser give advice, or a manager or owner seek to apply sound management options to property management planning, the farm environmental "pink slip" would assist in providing objective and consistent information to achieve their respective objectives.

Winners and Winners

I find it difficult to group stakeholders into winner/loser categories, or who will benefit and who would lose with a PEI. My experience confirms the importance of assessing accurately all factors affecting a situation before deciding on a course of action based on options presented. Nothing has emphasised this to me more than those situations that may result in life and death outcomes.

In terms of sustainable land use, I believe we are at a point where, as a result of our deciding on a course of action, the results will either ensure our future land use and quality of lifestyle, or otherwise.

In the long term, all stakeholders would be winners. In the short term, some perceived loss may be experienced, but this should be offset by the knowledge that the correct property management planning decisions were made, based on objective and consistent information.

Whilst a property owner may not achieve a hoped for stock carrying capacity, because of land degradation management considerations, medium to long term productivity may increase. For example, reducing the area of grazing land by the development of timber lots, wind breaks or reserves, may reduce the number of sheep carried. This may well be offset, however, by a reduction in lamb mortality, or an increase in meat/wool production and quality per unit, due to reduced energy consumption and more effective unit metabolism not only to survive but to achieve productivity growth.

The ability of an owner to conserve and transfer feed from one season to another, making provision for droughts, would significantly contribute to productivity over the medium to long term. Such management would help ensure sustainability and reduce the cost to the community through drought subsidies and other rural adjustment/support schemes.

Most prospective purchasers enter the land market with their eyes closed. This may be all right entering the tunnel of love at Luna Park, but it is not when entering a mine field, or the land market. A prospective purchaser would benefit from a farm environmental "pink slip" inspection, in establishing more clearly the "product" being purchased. Going into the land market with eyes open not only protects the purchaser but also the vendor. Open disclosures, honest representation and intent go a long way towards developing and enhancing human relationships resulting in a win/win outcome. Discovered deceit, misrepresentation and ill intent destroys relationships with a win/lose outcome that inevitably ends up in protracted judicial processes.

Property vendors may feel disadvantaged by environmental disclosures that may perceivably reduce the asking price for the property. It needs to be borne in mind that it is incumbent on the purchaser to make an offer, which invariably is considerably less than any perceived value or asking price the vendor may have in mind. The PEI may achieve a more realistic value expectation for the vendor than currently available.

In an era of low inflation, falling interest rates, and low commodity prices, the idea of making a profit in terms of capital gain, particularly in the short term, is not as easy to achieve as could be done in the 1970s and the 1980s.

Owners who are in a forced sale or near forced sale situation need to accurately evaluate their situation and all factors affecting it to develop a strong position from which to negotiate a restructure of affairs, achieving asset protection. A PEI may well ensure the strength of the negotiating position, particularly in support of a property management plan focusing on sustainable land use and asset protection.

Some owners may feel threatened by a PEI approach to assessing environmental factors on their property. The reality is that the environmental factors and issues are there, whether or not an inspection is carried out. The inspection and report is a human resource as part of astute property management planning in factor assessment. It is my view that it is better to know than not to know, so that I can make informed decisions concerning my property.

Financial institutions, which attempt to balance between equity, economic viability and asset value, are interested in ensuring long term protection of the asset upon which lending is secured. A PEI would provide a financial institution with information upon which two things can be determined: first, the capacity of the property to be sufficiently productive (subject to commodity returns and degree of diversification of enterprises) to service and reduce the capital of the loan; second, that the secured asset value will be maintained through the application of appropriate land management strategies.

Real estate agents, upon whom vendors and prospective purchasers depend, benefit from a PEI by assisting in determining a fair representation and description of the property. Officers of the Department of Conservation and Land Management, including the Soil Conservation Service, the Crown Lands Service, and the Valuer-General's Office, together with officers of the Departments of Agriculture have been approached for assistance in presenting a fair and accurate description for real estate agents, vendors, and prospective purchasers (Welsh, McDonald and Penfold, personal communication, 1993).

It may at times appear to be a hard thing to "put down" or "disappoint" someone by stating what needs to be stated. Some cultures and management styles avoid situation conflicts by ignoring relevant issues, hoping that the situation will resolve itself over time. Unfortunately, it is evident that this approach has not worked with human relationships, or human/land relationships. For too long we have "spared the rod and spoilt the child", so to speak, when seeking to resolve human-human-land management relationships. It may hurt in the short term to be told of the environmental status of a farm, but long term tragedies and irrecoverable disappointments may be averted. I see the PEI assisting in this role.

Community and Political Aspects

The rural community has recognised the need to respond more positively to farm environmental management. The development of the Landcare movement demonstrates a clear grass roots response to that need. In New South Wales, the number of groups has increased from 10 in January 1988, to 345 in June 1993 (Siepen et al., 1992), with 1400 groups Australia-wide. The size of the groups ranges from 4 to 230 property owners. The main focus of the groups is on the identification and management of land degradation issues in order to achieve sustainable land use.

Woodhill et al. (1992) discuss land degradation as a social issue, the impact of human activity on the landscape. There is a growing commitment of citizens within the community to act with a higher degree of environmental responsibility than in previous generations. Community participation (as distinct from just community consultation) in land degradation management is impacting in a positive way as the community takes responsibility for, and seeks remedies to, identified issues.

The PEI provides for community groups an aid to empowerment as the groups come to terms with issues and develop appropriate land management strategies.

The Property Management Planning Program soon to be launched is a good example of the government or political response to empower community groups to address land degradation issues (Letts, 1992). No longer is it a case of bureaucratic "numbers of farm plans done", but an empowerment of groups and property owners to plan and implement sustainable land management strategies.

Letts (1992) says:

"One means of reducing the demand for follow-up one-to-one services generated by Property Management Planning workshops is to provide participants with written aids they can use as reference documents to make their own assessments and decisions without having to seek the assistance of technical experts. There is a growing trend toward the production of these aids and the NSCP continues to support their production".

Examples of successful written aids are the Soil Structure Decline Assessment Kit (McGuinness, 1991) and the Dryland Salinity, Salt Action series (CALM, 1991). Both are publicly funded and assist in the property management planning process. The PEI is an application and an extension of these aids to a wider community, including the property owners, and the tertiary industries servicing agricultural production and land management.

Whilst Letts asserts that property owners will be able to apply these kits without assistance, I propose a realist's view that the technical experts are relevant as a resource to whom the stakeholders are able to refer for information and advice.

Eliason (personal communication, 1993) of the National Farmers' Federation, supports in principle the farm environment "pink slip" concept as an information, data collection tool to assist property owners or groups to develop an accurate inventory as part of the property management planning process. There are similarities with the American Farm Bureau's "Professional Self Help for Farmers", in applying an inventory check list of land use/management practices affecting the resources of the farm, aimed at achieving sustainable land use.

Politically, support for strategies to effect the implementation of the State's Catchment Management, Soils, and Trees policies, and the National Soil Conservation Strategy, is provided by both State and Federal Governments and from all political parties. The PEI could be viewed as an effective environmental audit implementing the policies and strategic plans.

Voluntary participation and application of the PEI is seen as a preferred option rather than legislating for compulsory use. This supports the grass roots community group approach to the ownership, identification, and management of land degradation issues.

There is a growing community awareness of land degradation issues and the political need to do something about them. There is increasing community and political support to assess the environmental status of properties to achieve sustainable land use in a total catchment management context. I believe that this is most effectively achieved through grass roots voluntary community groups.

Implementation

Mues (1993) proposes a "Property Appraisal Scheme" looking more specifically at the "invisible" land degradation issues. The emphasis is on the land market (sales/purchases) rather than as an aid to sustainable land management. I propose the emphasis to be on the management decision process, irrespective of the objectives of the process. The ultimate aim is to be able to make an informed decision based on objective and consistent investigation and analysis.

Davis (1993) affirms the position that rural land depends primarily on the productivity or the earning capacity of the land itself on a long term basis. It is in the context of the "long term basis" that the productivity of the land is reduced by the long term effects of land degradation.

In assessing the status of a property, whether it be for sale, purchase or management, the physical elements inspected should include geology, climate, soils, topography, vegetation, land degradation, land management history, water resources, protected land, land tenure and title, land capability classifications, land suitability classes, primary production status, seasonal effects, current seasonal status, accessibility, and status of land management structures. All these elements are included in the charter and responsibilities of the Department of Conservation and Land Management, as expressed in the "Guarantee of Service" (CALM, 1993).

To provide an objective and consistent assessment, criteria need to be established and applied. For example, the land degradation issues assessed for the 1987-88 State Land Degradation Survey (Graham, 1989), included sheet and rill erosion, gully erosion, mass movement, wind erosion, dryland seepage salinity, irrigation salinity, scalding, soil structure decline, soil acidification, perennial bush, woody shrub infestation, waterlogging, and stream bank erosion.

The methodology of assessment included hazard determination and current status, using Aerial Photographic Interpretation (API), Universal Soil Loss Equation (USLE), and field inspections. Other methodologies involving state-of-the-art technologies are available, including objective tests, objective visual appraisals, satellite imagery, cadastral inventories, and Geographic Information Systems (GIS). Two examples of objective criteria are given, demonstrating hazard determination and current status for sheet and rill erosion and dryland seepage salinity respectively, in Appendix A.

In determining the water resources of a property, issues of access, stability, water quality and quantity, capacity, impediments and detriments would be assessed. Water resources would include rivers, creeks, bores, bore potentiality, dams, springs, tanks, troughs, pumps, pipes, and, of course, water. An example of a water resources assessment sheet is shown in Appendix "B".

When would a PEI be done? The answer to that is any time. A request for a PEI could be applied to any land management decision making process, including property purchase, valuation for loans, strategic reviews, property management planning, mortgage review, assessment of lease conditions, development applications, proposed changes in land use, and environmental plan variations or amendments.

Carlos (personal communication, 1993) suggests that the PEI would be helpful in making an accurate inventory of the status of all farm resources as an essential part of the "Situation Analysis" stage of a business planning process. The PEI is not the decision phase of "relevant strategies" or "implementation", but part of the data collection that will assist in making sound judgements and decisions. The process of business planning is presented in Figure 2.

Figure 2 (After Carlos, personal communication,1993)

Who would initiate the PEI? In the main, it would be the property owner. Other interested stakeholders, with property owner consent, may also request a PEI. This could include rural consultants, financial advisers, real estate agents, vendors, purchasers, property lessees, local government managers and public sector clients (such as RTA or SRA).

Who would do the inspection and complete a PEI? With assistance from the Property Management Planning Program, land owners could develop the expertise to do a PEI on their properties. Requests for a PEI by other than property owners would need to be serviced by qualified and competent environmental or agricultural managers, consultants, and practitioners. This would include land management specialists such as agronomists, soil conservationists, property planning management advisers, land resource planners, environmental consultants, agricultural consultants, rural economists, and Section 75D registered persons.

To ensure consistency and quality of approach, land management specialists could be certified and registered (as with the section 75D list), after completing a Vocational Education and Training Accreditation Board (VETAB) approved course, satisfying The National Training Board (NTB) competency criteria.

What would a PEI cost? For property owners doing their own properties, the cost would be limited to materials and information on methodology. This could be between $200 and $500, depending on the extent of inspection and investigation. Testing of bores and pumps, for example, could cost between $200 and $1000 plus, depending on the tests and the details required.

A fee-for-service would be applicable for a PEI done by land management specialists. These fees could range from $1000 upwards, depending on the size of the property and the extent of the investigation requested by the owner or stakeholder. Whilst this may initially appear to be high, experience has shown that costs incurred in proper survey and design of a water reticulation scheme are nearly recouped by efficiency savings and competitive selection and purchase of systems.

An example is the cost effectiveness of a pre-purchase PEI, costing $3500, for a 2000 hectare property costing $2.5 million. The PEI is 0.14% of the property cost, a worthwhile expenditure for information to assist the decision process as to whether to buy or not, or to negotiate an offer price.

Conclusion

Whether or not a thorough investigation is done of the farm resources and a PEI is produced is ultimately a decision to be made by the owner of a property. With or without a PEI, the condition of the farm environment is what it is; the PEI does not change that. What the PEI does change is the property owner's knowledge of the environmental condition of the farm. It is with this more informed objective and consistent knowledge that the owner or stakeholder is able to make sound property management planning decisions.

I view the PEI as a means of supporting professionals in the advice they give to farming clients, protecting them and the property owner from potentially disastrous outcomes based on advice given on inappropriate information.

I see the PEI assisting the property owner to take control, in a spirit of cooperation with other stakeholders, to manage the farm environment so as to achieve the future sustainability of agricultural production.

Appendix A

Environmental Hazard Determination and Current Status - Sheet and Rill Erosion

Definitions -Sheet Erosion: The removal of a fairly uniform layer of soil from the land surface by raindrop splash and/or runoff. No percepible channels are formed.

Rill Erosion: The removal of soil by runoff from the land surface whereby numerous small channels, generally up to 30 cm deep, are formed. Typically occurs on recently disturbed soils.

(Houghton and Charman, 1986).

Although sheet and rill erosion are different erosion forms, they are considered together because farm management and soil conservation techniques for controlling them are usually the same.

The hazard of sheet and rill erosion is calculated using a modified form of the Universal Soil Loss Equation (USLE). This is a statistical equation developed by regressing soil loss on a wide range of parameters and finding which parameters give the highest correlations. The calculated soil losses to determine the sheet and rill erosion hazard classes are tabulated below.

Description	Class	Calculated Soil Loss t/ha/year	Sample Land Use/Topography
Negligible	1	< 1	most pastures and timbered lands
Minor	2	1 - < 5	flat to gently sloping cropping land with banks, poor and/or very steep pastures
Moderate	3	5 - < 10	banked cropping land and some gently sloping cropping land without banks
Severe	4	10 - < 25	steeper cropping land
Very severe	5	> 25	cropping on steep slopes or in areas subject to high runoff rates.

(After Graham, 1989)

Environmental Hazard Determination and Current Status - Dryland Seepage Salinity

Definition:"Saline soils are those that contain sufficient salt in the external solution to limit the growth of plants. Alkaline soils contain enough exchangeable sodium for the resultant soil properties to be unsuitable for crop production. Saline-alkaline soils contain excessive quantities of salts and simultaneously a large amount of exchangeable sodium ions." (Blake, 1967).

Dryland seepage salinity occurs when rising water table levels enable dissolved salts to flow laterally underground and surface lower down the slope. A measure of the electrical conductivity (ECe) of the soil can confirm visual appraisals of saline areas. DeciSiemens per metre (dS/m) is the standard unit for measuring soil and water salinity for New South Wales. The degree of salination is tabulated below.

Description	Class	dS/m ECe
No significant level of salinity	0	< 2
Low level salting	1	2 - 4
Moderate level salinity	2	4 - 8
Severe salinity levels	3	> 8

(After Fogarty et al., 1992 and Bozon et al., 1989).

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