7.3 The qualitative system dynamics model of the WA agricultural region
7.3.3 Social Capacity Loop
the notion of social cohesion; a more cohesive society will, in general, have a higher level of social capacity. For example, it will be able to support a wider range of market exchanges and non-market interactions and institutions.
However, natural resource management has paid too little attention to how social capacity affects environmental outcomes.
Although it is assumed that increasing social capacity will produce more desirable outcomes (for example, sustainable natural resource management) there is evidence to suggest that this may not always be the case (Barr and Cary, 2000). On the one hand, it is proposed that social capital serves as a resource to provide robustness to an existing system or to make possible the composition of a new system when the potential within the system is great enough (Resilience Alliance, 2002). On the other hand, increased social capacity may create tension between social norms, institutions and wellbeing (Petrie, 2002). The notion of wellbeing is a complex construct related to social capacity and productive capacity (Petrie, 2002). For example, strong group bonds can make organisations exclusive, prioritising the group’s goals to the detriment of the broader society, as has been suggested to occur in the agriculture industry (Holling and Gunderson, 2002). In some instances group norms over time may be detrimental and reduce the potential for innovation. Thus there may be many complex feedback effects between social capital, its sources and its effects (Productivity Commission, 2003). These two dichotomies, between the benefits and detrimental effects, corroborate ideas inherent in the adaptive cycle that (1) increasing connectivity produces the structures for success, and (2) beyond a certain degree of connectivity, organisations may become overly rigid and lack flexibility, and increasing connectivity precipitates a collapse or crisis within an organisation (discussed in Section 5.6.4). These aspects of social capacity are now incorporated into the model of the WA agricultural region.
One of the seven themes of Australia’s National Land and Water Resources Audit was an investigation of the capacity of, and opportunity for, farmers and other natural resource managers to implement change (Table 3.1) (Cary et al., 2001, 2002). These studies focussed on human capacity, that is, the characteristics that influence an individual landholder’s capacity to change and adopt more sustainable land management practices. It is introduced here because it is one of the components involved in the overarching construct, social capacity. However, a comprehensive discussion on the psychology and sociology of an individual’s decision making is beyond the subject of this book. Caryet al. (2002) concluded that human capacity to adopt sustainable land management practices was context dependent and hence it was difficult to make any generalisations in this regard. These findings are consistent
with the argument of Gallopin (2002) in which capacity is only one of three interacting factors that are involved in change; the other two are willingness and understanding. Caryet al. (2002) contended that there was potential for significant structural change within parts of rural Australia, caused by a cohort of older farmers potentially exiting the industry, and proposed that this may have significant consequences, not only for natural resource management but also for community wellbeing in these regions. They recommended the need for improved monitoring of ongoing structural change in rural Australia.
Cary et al. (2002) inferred a relationship between rural reconstruction and community wellbeing, but the nature of the relationship was not made explicit.
In an extensive review of Australian rural producers, it was found that human capacity to change to more sustainable practices varied across the regions and localities of agricultural landscapes. Therefore, to effect change it is critical that future natural resource management policy needs to take account of these differing social capacities (Table 7.2) which reflect differing socio-economic characteristics and locality advantages (Caryet al., 2002).
Table 7.2.Factors influencing rural producers’ capacity to change to sustainable practices
1. The use of sustainable practices will depend on how landholders assess the value of recommended practices.
2. Landholders seek to reduce the risk of adopting a new practice.
3. Socio-economic factors which can influence adoption of sustainable practices include farm income, age, training, having a farm plan, perception of financial security and community Landcare membership.
4. Pro-environmental stewardship values and attitudes have a relatively minor influence on the adoption of sustainable practices.
5. Future structural and social changes in agriculture will influence the capacity of landholders to adopt more sustainable land use practices.
6. There is a need to adopt, identify and develop locally applicable sustainable practices.
Source:Caryet al. (2002)
It is contended (and sometimes assumed) that the use of what are considered to be sustainable practices (Cary et al., 2002) will lead to more sustainable resource management. However, this association is often constrained and is likely to vary for different localities. There may be long time lags before the use of a sustainable practice results in a more sustainable state being achieved.
Human behaviour related to implementing sustainable practices is adaptive, rather than simply reactive, in its nature. Appraisal and implementation of these practices will depend on assessment of, and experience with, the use of
such practices. Therefore, the difficulty for landholders in observing linkages between many recommended sustainable practices and desired sustainable outcomes lies in the fact that the benefits may be intergenerational and will not accrue to the individual in the short term. Caryet al. (2002) proposed that broader conceptions of sustainable management embrace the need for strategies for sustaining both food security and the need to conserve natural resources.
This last conception requires the adoption of different model boundaries and assumptions about endogenous model variables. The qualitative model presented here is an attempt to broaden the conception by moving sustainability into the mainstream of natural resource commodity system economics.
Figure 7.10 shows the causal loop diagram of the WA agricultural region including the commodity system and the Social Capacity Loop which is made up of loops B1 and B2, and the additional variable ‘Desired Social Capacity’.
The commodity system is linked to the social system through the variable
Total commodity production
Demand
Price Efficiency and scale Capacity
Profits
Reinvestment + +
––
+ ++
++
R1
R2 R3
Climate and weather
Social capacity Social capacity discrepancy
Desired social capacity
+
+
–+
B1
B2
Community wellbeing
Intergenerational transfer rate
Farmer age Farm
consolidation rate
Number of farms
+
– +– –
+
+
Fig. 7.10. Causal loop diagram of the WA agricultural region showing the commodity system and the social system. The Social Capacity Loop is composed of loops B1 and B2. System dynamics causal loop construction conventions are used.
‘Price’ in the commodity system. The model is read as follows: Loop B1 – high commodity prices increase land sales (through the expectation of future gain) and increase the rate of farm consolidation, reducing the number of farmers, and potentially the total rural population in the broadacre areas of the WA agricultural region. One way this can be interpreted is that a reduced number of farmers reduces the social capacity through the reduction in the number of relationships between farmers, which in turn reduces the overall community wellbeing and potentially the social capacity. Further research is required to fully understand the complex social relationships and their outcomes (Tonts and Black, 2002).
In the WA agricultural region the number of farm establishments dropped from approximately 23 000 in the late 1960s to less than 10 000 in 2000.
Higher land values in general shadowed commodity prices and tended to provide a greater incentive to sell small farms and thus farm consolida- tion rates increased during buoyant seasons (Cary et al., 2002). During low commodity price periods the incentives for farm consolidation were greatly reduced (Barr, 2000). The growing body of literature in rural sociology suggests that agriculture in North America and Australasia is experiencing a gradual shift away from traditional family farms towards farm business structures that are more corporately orientated (Tonts and Black, 2002; Cary et al., 2002). Corporate farming takes two common forms: either the corporate farm is owned by a diverse group of shareholders or contract farming is used (Tonts and Black, 2002). However, in some areas the consolidation rate has not been as rapid as anticipated as a result of a reduction in the rate of inter- generational transfer (Loop B2). Low profit levels of family farm enterprises reduce the rate of transfer of the farm from father to son, resulting in older farmers continuing to remain in the industry (Barr, 2000), most commonly in the medium sized farms in the broadacre regions. In recent years, however, inter-generational transfer appeared to be unrelated to commodity price fluc- tuations and reflected a deeper social trend in the lifestyle preferences of younger generations and the attraction of alternative career paths through improved educational levels (Caryet al., 2002).
In this model, the price is linked through the number of farmers to commu- nity wellbeing and through to social capacity, although the difficulties with this cause and effect are recognised as community wellbeing is a complex index. In macroeconomics one measure of community wellbeing is reported, in terms of Gross Domestic Product (GDP). This translates to higher growth in per capita income, and better living and environmental standards (Department of Foreign Affairs and Trade, 2003). However, this is not the only index. The United Nations Development Programme’s Human Development Index (HDI)
has been proposed since the early 1990s as an alternative international index of standards of living, incorporating social indicators and economic output, while other indices that incorporate both consumption and life expectancy have been also been suggested (Dowricket al., 2003).
The consolidation rate reduces the number of farm establishments and the number of farmers in the region. As the number of farmers declines there may also be a decline in the associated social services provided to a lower population size as, for example, is occurring in the hospital and banking sectors in Western Australia. This will potentially reduce the interactions, the social capital and cohesion of the rural communities based on the assumptions made above and from resilience theory, discussed in Chapter 6. Consequently social capacity may be reduced under these conditions. Tonts and Black (2002) reviewed the literature on the effect of changing farm business structures on rural communities and found that little research had been undertaken in Australia to examine the impacts of changing farm structure on community wellbeing and regional capacity. In comparison much of the research in this area undertaken in North America links the expansion of corporate and contract farming with radical changes in community structure and social interaction (Tonts and Black, 2002). Although anecdotally it was thought that community wellbeing might be undermined through the introduction of a large-scale seasonal and mobile labour force, an alternative view was that more vibrant communities may be created through new opportunities for downstream processing and support services (Tonts and Black, 2002).
However, no research in Australia exists to substantiate either position (Tonts and Black, 2002).