The Australian cotton industry is committed to improving the environmental management of cotton farms in Australia. The main tool being used to drive improvements in environmental performance on cotton farms is the industry’s Best Management Practices Manual ("Manual").

The Australian Cotton Growers Research Association ("ACGRA") and the Cotton Research & Development Corporation ("CRDC") are the two industry organisations responsible for the development of Manual—CRDC through its funding of the original research program and the on-going Manual maintenance and development, and ACGRA through its Executive Officer, who is the author of the document, and responsible for the on-going maintenance of the Manual. Cotton Australia, the peak cotton grower body, is responsible for the implementation of the Manual in the field.

The Manual provides cotton growers with a framework to help them identify the critical components of their farming operation from an environmental perspective, and then plan and record how they are going to manage those components in a way that minimises the risk of environmental harm. This framework involves growers assessing their operations against established best practices, and then developing farm-specific plans to address the significant identified risks.

Whilst the Manual currently focuses on pesticide management, it is planned to gradually expand its coverage to more general resource management issues. The decision by the cotton industry to focus on pesticides was quite deliberate—it was, and remains today a critical issue for the industry, the importance of which can be easily conveyed to growers, and thus used to induce improvements in farm environmental management. In developing the Manual, the industry considered that adopting an overly broad approach to resource management at the outset would run the risk of each issue being given only superficial treatment. Additionally, it was believed that to introduce change to cotton production practices, a clearly identifiable driving force for the need to change was vital, as opposed to diffuse or broad concepts against which resistance may be easier to muster. The change in thinking that may be required to begin adopting an Environmental Management System ("EMS") means that a focussed, relatively simple starting point such as the pesticide management focus of the Manual can act as an introduction to and building block for these more sophisticated systems. The cotton industry sees the use of an EMS as an issue worthy of full investigation—see the section headed ISO 14001.

The cotton industry is serious about demonstrating that it is capable of planning its own agenda for improving environmental performance (including responsible pesticide management), and it accepts the responsibilities associated with this. The first is the need for the documented analysis and planning approach exemplified by the Manual. The second is the need to gradually expand the coverage of natural resource management issues addressed by the Manual. Other issues for the cotton industry will be checking compliance, and certification of that compliance. In other words, gathering the evidence that the Manual is actually being used, being used properly, and having a positive impact. This evidence will most likely require some type of audit process.

The rationale behind introducing an auditing scheme is to have a means of demonstrating actual compliance with the contents of the Manual that combines industry control over the process, with a degree of external assessment sufficient to satisfy the various external stakeholders of the cotton industry. However, the many issues and complexities that are required to be addressed in developing such a scheme need to be recognised.

It also needs to be stressed that the audit process is part of the education program; audits offer ‘opportunities for improvement’ and will be the focus of rewards for achievement (the Cotton Industry Grower of the Year awards have an extremely strong focus on BMP compliance). Audits are voluntary and are not intended to provide the basis for regulatory action. The Manual was not designed to perform this type of role; indeed the core concept of planning and continuous improvement embodied by the Manual would be at odds with any attempt to use the Manual in this way.

The cotton industry is currently investigating the two concepts inherent in a move towards an industry based EMS— the general issue of auditing, and the appropriate system to use (in this case ISO 14001; however, other standards will be investigated). While in theory there are many advantages, there are many practical issues that need to be fully considered when contemplating introducing such broad schemes on an industry-wide basis. Some of these include:

1. The feasibility of introducing one standard across a large range of operations—is it practical or possible? how is this best achieved?
2. The cost of introducing and maintaining the system, including the direct costs involved in auditing
3. The internal bureaucratic structure required, and the cost of running this
4. The training (and availability) of appropriate personnel
5. Ensuring stakeholder involvement, including the setting of appropriate standards within the ISO (or other) framework.

The Australian cotton industry recognises that credible verification of its chosen standards (i.e. the best management practices) of resource management is required. To help achieve this, the industry is developing the following infrastructure and expertise:

• Training people with cotton industry experience as auditors under the Best Management Practices Program
• Developing the necessary protocols for auditing compliance with the Manual
• Establishing a dedicated ‘Audit Office’ to ensure the smooth running of the audit process.

The establishment of the auditing framework has been facilitated by a voluntary pilot program designed to investigate the issues and requirements associated with the development and implementation of an audit and certification scheme based on adoption of the best management practices contained in the Manual. Issues considered under the pilot program included the capability of the current industry infrastructure to accommodate an audit scheme, and financial and human resource requirements, including those associated with auditor training. Attention was particularly paid to the issue of ensuring that costs to cotton growers are kept within acceptable limits.

34 cotton farms were assessed under the pilot program, and a follow up audit of those farms is nearly complete. Every cotton-growing region has at least one farm involved in the pilot program and it is planned to hold field days on these farms once the program is complete. These field days will be used to disseminate information on the auditing process, as well as generating discussion on the issue within the industry.

The cotton industry, through CRDC and the BMP Management Committee, selected an external provider of environmental auditing and training services to assist in the running of the pilot program. This brought auditing and training expertise to the pilot program and also assisted the development of appropriate audit documentation and protocols. The industry now has 4 registered, fully trained, independent auditors who are currently operating in all cotton growing regions. It is hoped that up to 14 industry auditors will be trained by May 2000. To date, some 45 cotton farms have been audited, with another 13 planned in the near future.

It is the ACGRA’s position that ISO 14001should be investigated as the potential basis for future development of environmental management systems in the Australian cotton industry. Adopting an international standard has a number of advantages, including providing a common framework that would allow for integration between different agricultural commodities (given most growers produce more than one commodity), and increasing the likelihood of international recognition.

The process through which cotton growers are guided under the BMP Program fits with the generic "Plan, Do, Check, Review" concept which underpins any management system. However, the Manual is not comprehensive—it only covers pesticide management and does not offer any guidance on some of the specific EMS requirements, such as emergency planning or document control. It must be borne in mind that, as a generalisation, farmers are not particularly fond of paperwork. Thus it is critical that there is a gradual and staged introduction to the concepts embodied in a broad management system such as an EMS. This issue, and other issues associated with upgrading the Manual into an EMS, is being addressed by a specific research project, a description of which follows.

ACGRA, CRDC and the Murray-Darling Basin Commission are collaborating on a project titled "The feasibility of, and guidelines for, introducing an appropriate Audit and Certification model to foster better management practice in natural resource management in the irrigated cotton industry". This project has the following objectives:

1. determine the drivers, constraints and opportunities associated with introducing a more rigorous Certification/Audit Standard for the cotton industry,
2. determine whether ISO 14001, or another Standard, is appropriate for introduction throughout the cotton industry,
3. determine the extent to which the introduction of ISO 14001, or the other identified Standard, throughout the cotton industry will meet the MDBC’s Natural Resource Management objectives,
4. determine the understanding and the receptiveness of the various sectors of the cotton industry to the adoption of an International Standard based Certification/Audit system,
5. gain a better understanding of the learning, and better management practice adoption, practices of the growers in the cotton industry,
6. undertake a detailed analysis of the requirements of the adopted Standard (possibly ISO 14001) making particular reference to how these requirements may be different to those of the adopted cotton BMP Manual and Auditing process,
7. develop an implementation strategy and action plan identifying how the learning patterns of the various industry sectors will be accommodated and the timeframe needed for implementation,
8. identify the Key Performance Indicators (KPI) by which the success of the introduction of the Certification and Audit model can be measured, including the natural resource outcomes,
9. identify any Research and Development requirements to enable the introduction of the nominated Standard to occur and for cost effective measurement of the nominated KPIs,
10. determine the cost and resource requirements for the introduction and ongoing operation of the Certification and Audit system, and
11. investigate and document the options for a cost-sharing model suitable for recovering both the implementation and ongoing cost of a Certification and Audit system in the cotton industry.

From the cotton industry’s perspective, some the critical issues to answer through the feasibility study are:

• cost-effectiveness of the development and implementation of a certification standard
• what incentives may be available to cotton growers adopting such a standard
• how realistic is it to expect all cotton growers through out the industry to develop a comprehensive EMS

The last point is critical, particularly given that cotton in Australia is predominantly grown on family farms. As with most agricultural industries, the Australian cotton industry includes a diverse range of people operating under differing geographic situations and circumstances, with differing levels of resources, training and skills.

The final report for the project is due in September 2000. The report will then be the subject of widespread industry consultation. It needs to be stressed that before any decision is made on developing the Manual into a comprehensive EMS, the largely technical assessments that the above project will deliver will be subject to a full and comprehensive consultation process with cotton growers and other stakeholders, such as the various government agencies involved in natural resource management.

One of the critical assessments of the feasibility study will be whether any tangible benefits will accrue to cotton growers or the industry as a result of adopting an EMS. The benefits of the BMP Program to date have been generally realised at the industry level rather than the individual cotton grower level.

The Australian Cotton Industry has the advantage of having an individual cotton farm that has achieved ISO 14001 certification. That farm, "Oakville", situated in northern New South Wales is closely involved with the feasibility study, with its proprietor being on the project steering committee, and Oakville’s environmental officer being seconded to assist with the project during the winter season. Oakville Pastoral Company has also kindly allowed the project team access to its ISO 14001 documentation.

The benefits realised by Oakville through its implementation of an EMS are difficult to quantify, but have included the ability to access a market through product differentiation (ie environmental certification), and the improved ability to access finance as a result of being able to present itself as a professional farming operation.

It needs to be noted however that Oakville is one of the only cotton farms in Australia to actually spin and market yarn. Thus the first mentioned benefit may not realistically be within reach of the majority of cotton farms in Australia lacking this vertical integration.

While the potential may exist for an environmental premium to be paid by cotton merchants, to date no merchant has offered one in Australia. The markets that are likely to be influenced by an environmentally differentiated product are those that can afford to be choosy. However, a large percentage of cotton consumption occurs in parts of the world that are unlikely to pay a premium for an environmentally branded product. Furthermore, a large percentage of world cotton production is used for ‘lower value’ uses such as work wear, casual wear, under garments, and some manchester uses such as towelling, sheeting and blankets. These types of product are less amenable to differentiation than higher value uses, such as polo shirts, branded denims, business shirts and women’s knitwear fashions. Thus there is little scope for premium pricing, and subsequently only very limited direct financial reward for cotton growers who are able to differentiate their product along environmental lines.

There is a strong argument that those farmers who are making a conscious and quantifiable effort to manage environmental risks whilst continuing to be productive may ultimately be rewarded for that practice through being ahead of the game if and when tighter controls over land use practices are introduced. They will be able to readily demonstrate their responsible management practices, and therefore be recognised for their commitment.

The cotton industry has in place a comprehensive program to improve the management of pesticides. The program is focussed on the Best Management Practices Manual.

In 1993, a joint research program between the Cotton Research & Development Corporation, Land & Water Resources Research & Development Corporation and the Murray-Darling Basin Commission ("MDBC") was established to study "The Impacts of Pesticides on the Riverine Environment using the Cotton Industry as a Model". It had total funding of $5.5 million and the following goals:

1. To assess the impact of pesticides used by rural industries on the riverine environment.
2. To understand the fate and transport of pesticides once applied.
3. To develop practical, cost effective methods to minimise the impact of pesticides on rivers; and
4. To provide a sound scientific basis for the development of management guidelines and regulations.

Cotton was chosen for the model program for several reasons, one of the most important being the cotton industry’s willingness to participate and act on the outcomes of the studies, and an external review of the joint research program helped to identify a system of best management practices as the best way of achieving the third and fourth goals.

During the development of the Manual, extensive consideration was given not only to the technical content of it, but also the structure and delivery method. The joint research program that funded its original development also funded a project investigating appropriate implementation pathways. This study noted that the traditional methods, industry self-regulation and external regulation, both have their strengths and weaknesses.[1] Thus the approach has been to try and combine the strengths of both ‘pathways’.

One of the cotton industry’s core philosophies in implementing the Manual has been that self-directed initiatives are far more likely to work than command and control mechanisms of change. When farmers develop plans on their own initiative they will implement many more actions to maintain and enhance natural resources than they would with other policy mechanisms such as regulation or public-sector controlled planning. This approach was reinforced by the investigations undertaken during the Manual’s development phase of various programs in Australia, the United States and Canada. A flexible planning approach (as opposed to an inflexible regulation based approach) is also able to recognise that management strategies must vary from farm to farm because of their diverse range of geography, size, financial circumstances and management skills.

Any program that attempts to bring about change means must have at least three fundamental requirements for its successful implementation. These are that it:

1. have direct industry involvement and leadership
2. have a clearly identifiable, specific driving force
3. be approached in a gradual, staged manner.

The first draft of the Manual was developed from a list of ‘potential’ best practices, which were culled from an extensive review of current literature (primarily existing industry publications, related guidelines, government reports, research papers and the research carried out by the joint research program). A workshop involving a range of interested parties, including cotton growers, researchers, regulatory agencies and community representatives, helped refine the list of potential best practices and also enabled the perspective of a range of stakeholders to be taken into account.

The best management practices ("BMP’s") contained in the first draft were based on the philosophies of:

• minimising the amount of pesticide applied;
• minimising the amount of pesticide transported off farm; and
• minimising the impact of a pesticide if it does leave the target area,

and were divided into three chapters covering Farm Design and Management, Integrated Pest Management, and Application of Pesticides.

Prior to being sent for comment to all cotton growers, the first draft was reviewed by a small technical panel, consisting of people with a range of expertise and perspectives. The draft was also sent to other interested for comment.

The Manual has adapted a successful concept developed in the United States, and utilised extremely effectively in Ontario, Canada. The core of the Manual is a series of self-assessment worksheets, which enable growers to assess and document their own operation, based on the best practice guidelines and against a series of risk rated examples. These worksheets then lead to the development of action plans designed to minimise the risk in areas highlighted as being of high risk during the self-assessment process.

However, self-assessment sheets can’t hope to be comprehensive, and aim to only highlight the most critical issues. For growers who want to take the development of best practices further, there is a process of hazard analysis described, which allows growers to identify in detail issues for their own farm.

The initial stage of the Manual leads the grower through a series of self-assessment worksheets, which are grouped under four main headings: farm design and management, pesticide application, integrated pest management and pesticide storage and handling. Issues relevant to each heading and relating to the risks associated with the use of pesticides are highlighted on the self-assessment.

Each of these self-assessment worksheets is designed to allow the cotton grower to assess and rank the potential risks on their farm relating to the use of pesticides. These risk-rankings are then used to identify high priority areas for the development of action plans that will help minimise that risk.

The rankings go from low to moderate to high to extreme (from 1 to 4), and are designed to provide an indication of the relative risk that may result from an activity in the given circumstances. Thus a ranking of 1 for a particular issue means that that issue poses a relatively low risk; rank 2 could be a moderate risk; rank 3 a high risk and rank 4 a more extreme risk.

Rankings of 3 to 4 mean a higher level of risk, and any issue which attracts these rankings are prioritised for the development of action plans to reduce the degree of risk.

Although the self-assessment worksheets address a number of important issues relating to pesticide use in the cotton industry, they are by no means complete or exhaustive due to the broad complexity of the farms, operating conditions and practices existing in an industry as diverse and sophisticated as cotton.

Thus a framework which will assist cotton growers to identify all the critical issues they face on their own farm, leading to the development of a more comprehensive farm plan (in effect a farm specific set of best management practices) has also been included in the Manual. This framework takes the form of hazard identification and is designed to break down the task of establishing farm specific best practices into a series of steps which are manageable.

The starting point is to list the activities that occur on a cotton farm and then identify the hazards associated with these activities and for which best management practices will be developed and applied. Rather than provide a prescriptive set of practices users are guided to develop their own best management practices and check these against established standards (included in the Manual). This process alerts people to the key issues and the potential problems while allowing them to develop a set of practices with accompanying monitoring systems that suit their specific circumstances and operations.

The key to success in using the Manual is in developing action plans for those areas or issues identified as posing a significant risk.

Once the self-assessment sheets (and the hazard analysis if applicable) have been completed, those areas requiring attention have been identified and ranked. The solutions chosen for the identified risk areas are documented, as are the monitoring and review processes implemented to evaluate the effectiveness of the plans, together with the person responsible for seeing the plan is implemented.

Supporting documentation, which provides some guidelines or management options for the development of action plans, is included in the form of "Best Practice" booklets. Further resources to assist cotton growers in their planning process are also listed under each self-assessment heading, including other published material and relevant legislation.

The Manual provides a flexible framework for cotton growers. It recognises that cotton farming takes place under a wide range of environmental, commercial and social conditions. These varying conditions may place differing constraints on a cotton grower. By using a planning framework, cotton growers are able to identify any particular constraints that they may be operating under, and then plan the most appropriate method for them of overcoming that constraint.

By using the Manual, cotton growers will be developing practical farm plans that minimise any impacts of cotton farming on the environment, as well as demonstrating their commitment to responsible resource management.

The Manual therefore has two distinct components, one addressing the best management practice guidelines, while the second is directed at providing cotton growers with a framework they can use to document and plan the environmental aspects of their farming operation. In fact, BMP could just as easily stand for best management planning.

This planning framework aims to provide a flexible process that will address the need to manage the natural resource base, and also meet producer’s need. It enables the user to

• objectively assess their current situation
• document decisions made to improve situations identified as being a potential risk
• monitor the effectiveness of those decisions.

A generic document will always have limitations—if there are say 1200 cotton farms, then there are probably well over 1000 variations to be taken into account regarding how to manage that operation environmentally. By focusing on grower developed action plans, based on a process which highlights the critical issues to be addressed, solutions are founded on a combination of common sense, sound science, economics and site specific management. Accordingly, the adoption of best practices is substantially improved.

The brief description of the process is as follows:

1. Cotton growers are made aware that the Manual is available. This is being done through the various industry publications and communications streams from the local grower association, as well as relevant media publications (eg the Australian Cotton Grower).
2. Generally, an introductory meeting is held, where the Manuals are distributed (together with a short "How to Use" guide, and a brief introduction to its development and content is given.
3. Once growers have received the Manual, a training day is organised where they are shown how to compete the Manual.
4. Once the cotton grower has completed the Manual, a follow up meeting is organised with the grower to ensure he has completed the relevant parts of the Manual.

A BMP Management Committee (operating underneath the Australian Cotton Industry Council) has been established to oversee the development of the implementation process, as well as being responsible for ensuring that the day-to-day work is being performed. The BMP Management Committee has representatives from the Australian Cotton Growers Research Association, Cotton Australia, Cotton Research & Development Corporation, the Australian Cotton Co-operative Research Centre and Cotton Consultants Australia.

The Manual is currently being reviewed, with the draft for comment due by the end of May this year. Issues to be included in the revised Manual are a dryland specific section, an upgraded pesticide storage and handling module, and a module on farm hygiene for disease and weed management.

Other issues highlighted for potential development include occupational health & safety, water management, and potentially, to be a recognised industry code of practice.

The industry has set the following goals for cotton grower adoption of BMP:

Schofield, N.J and Edge, V.E (1998), "Minimising the impact of pesticides on the riverine

environment: key findings from research with the cotton industry" (Land & Water Resources Research & Development Corporation Occasional Paper 23/98, Canberra)

Williams, A (1999), "Best Management Practices in the Cotton Industry" in Carruthers, G. and Tinning, G., Environmental Management Systems in Agriculture—Proceedings of a National Workshop May 25—28, 1999 (Rural Industries Research & Development Corporation, Publication No. 99/94, Canberra).

[1] In one sense, this division is simplistic, and perpetuates a stumbling block that is generally encountered in discussions in this area. This stumbling block is the descent into arguments between which model, self-regulation or external regulation, should be used. A stand-off ensues between industry on one hand who argue that they are already over regulated, and those who maintain that self-regulation doesn’t work, and that what is needed is more rules. Perhaps this debate could be progressed by more clearly defining self-regulation (has it ever been defined?) so that the real issue, what is the best way of improving resource management, is not overlooked. Is a better definition of self-regulation one that focuses on genuine industry involvement (leadership?) in how it is to manage itself? Thus the development of appropriate ‘best practices’ and certification schemes by industry result in them setting the standard of both the specific guidelines and how they will broadly manage the implementation or adoption, by industry members, of those guidelines (ie the framework). This industry development work needs to be backed up by a requisite level of stakeholder involvement to ensure the appropriateness of the standards, and of course is ultimately backed up by existing legislative requirements—i.e. co-regulation.

Contact:
Allan Williams
Email: allanw@mpx.com.au

Disclaimer: The views expressed in this publication are those of the authors and not of the Department of Natural Resources and Environment or the Grains Research and Development Corporation. The State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes. We therefore disclaim all liability for any error, loss or other consequence, which may arise from you relying on any information in this publication.

Environmental Management Systems (EMS) and ISO 14000 are becoming commonly used words in Australian agriculture, although as yet there are no widespread schemes in use. There are several farmer groups in both the eastern states and in Western Australia working on pilot projects developing an EMS for the grains industry. In this paper we summarise our progress after one year of working in partnership with a group of farmers in the Riverina region of southern N.S.W.

Before describing the approach of our group, we would like to put the Australian grains industry in some context to help assess the likelihood of farmers voluntarily embracing whichever EMS might result from current work:

• Australia exports grain to a number of international markets, some of which are becoming increasingly concerned about the environment while others are currently unconcerned. In the short term there is not likely to be a price premium for grains produced in an environmentally acceptable manner, as has been found in other countries for broadacre agricultural produce.
• Australian farmers are amongst the most efficient in the world and, unlike U.S. and European counterparts, must operate with very few subsidies. Given our low population and large land area, this is likely to continue.
• In 200 years of European settlement, Australia has generated some large environmental problems. Amongst the most notable is land salinisation (Anon 1999b, Lovering et al. 1998). Australia also has the dubious honour of the highest species extinction rate of mammals in the world (Young et al. 1996).
• Australia wide grain productivity has increased by 4.6%/year from 1977-94 (Knopke et al. 1995), despite emergent land degradation problems.
• Australia currently does not produce genetically modified (GM) grain (canola is being trialed experimentally) and this currently offers us a competitive advantage in some markets. There is vigorous debate within both the urban and rural community about this issue, and regardless of whether Australia eventually produces GM grain, there is a demand for improved product labelling.
• Australia’s population density is low (<3 people/km², ABS 2000) compared with the U.S.A and the European Union (28 and 118 people/km², respectively, EU 2000, US Almanac 2000).
• As in many developed countries, Australia’s rural population is declining. In 1911 43% of the population was rural, compared with 14% now. Currently 84% of the population live in 1% of the land area, mainly on the southern coastline (ABS 2000). Many urban Australians still have little knowledge of the environmental problems in rural Australia. Given the above two points, the short-term pressure on the grains industry to develop an EMS from a domestic perspective is likely to be lower than in the U.S.A. or Europe.
• There is no financial assistance for farmers to adopt EMS.
• There are some regressive policies in Australia, which do not send appropriate environmental signals to farmers. There are also no markets for ecosystem services, such as agriculture supplying clean water in addition to food products. There is increasing policy debate on the environment (Anon. 1999a).
• Compared with grain production in many parts of Europe and the U.S.A., fertiliser and pesticide inputs used for grain production are relatively low. If the final form of the Australian EMS mainly concentrates on on-farm issues (as do current European and North American schemes), rather than wider ecosystem impacts, we could potentially market ‘clean and green’ grain successfully.

The philosophy of the project is for farmers to actively participate in developing an Australian EMS which will assist them in making better decisions about the effect of farm management on the environment and which may also pre-empt future market restrictions. The EMS we are working towards will be able to be adapted to meet international requirements as well as being complimentary to Quality Assurance programs already developed for the crop and livestock industries in Australia.

Our approach is initially to develop an environmental farm planning approach, with a move towards incorporating the systems elements contained within a formalised EMS. This approach, as has been found in the Australian cotton industry, UK LEAF, US Farm*A*Sys and Canadian EFP schemes, is more likely to be successful with farmers than attempting the process of EMS initially. We have not set out to deliberately model our work towards EMS on an existing scheme and have not formed alliances with other organisations such as agribusiness that could be perceived as having strong vested interests. We have not insisted that third party auditing is essential, although our self assessment and monitoring approach is compatible with auditing should farmers choose this avenue. To provide such restrictions could have resulted in lowered commitment to the project and/or may not have met farmers’ learning needs about environmental problems. External auditing is expensive.

We are working with 17 farmers who volunteered in response to a public invitation to participate in the project. Our project covers a geographic area of approximately 100 km x 40 km (latitude 35°S, longitude 146°E) in the southern Riverina region of N.S.W. The rainfall is winter dominant and summers are relatively hot and dry. Average annual rainfall is 450-500 mm/year. This area contains highly productive agricultural land, some of which will be threatened by salinity in coming decades. The area has important conservation values and contains some large, high-quality remnants of native vegetation on private land. Many farmers have a strong conservation ethic but are constrained by market economics. Some of the degradation problems (such as salinity and nature conservation) transcend farm boundaries, whilst others have the greatest immediate effect on the individual landholder (such as soil loss and soil acidification). For these reasons the area is an interesting one in which to develop a pilot EMS.

The typical farm size is approximately 1,000 ha (range 400-6000 ha) and all farms are family operations. Cropping intensity is variable, commonly 50-60% of land is under crop and 40-50% under pasture (mainly wool sheep production) at any particular time. Almost all farms are dryland (non-irrigated). Winter crops are grown, commonly wheat, canola, barley or triticale in rotations with legume-based pastures. The most common legume is subterranean clover (an annual species) but increasingly the perennial legume alfalfa is also being grown. The nitrogen from 3-5 years of pasture commonly supplies N for two crops, with fertiliser N being used increasingly thereafter as needed.

Once we decided upon the geographic area, we mailed invitations to all farmers in the district (approximately 250) inviting them to participate in the research project. Seventeen farmers expressed interest and now participate regularly. The reasons for farmers wishing to join the group have ranged from:

• Concern about rising groundwater and salinity (water imbalance of dryland farming and effects of adjacent irrigation areas), soil acidification, soil erosion and herbicide resistant weeds.
• Strong concern for grandchildren being able to still farm.
• Concern about the impacts of intensifying agricultural production on remnant ecosystems and threatened native species.
• The wish to increase farm management skills.
• Wanting to learn more about agriculture’s impacts on the environment.
• Interest in developing local brand and eco-labelling, given the area’s relatively high environmental values.

To date we have discussed the experiences and features of several existing farm planning schemes including LEAF in the UK, Farm*A*Sys in the USA, the Ontario Environmental Farm Plan, and the best management practice approach used by the Australian cotton industry. We have also introduced farmers to what ISO 14000 means. Having worked through a number of issues we have now developed a draft self-assessment questionnaire and are currently developing monitoring tools for farmers to assess their environmental performance. Because some of our environmental issues (dryland salinity and remnant ecosystems in particular) extend well beyond the farm boundary, we also wish to develop a ‘Local Action Plan’ for the wider community, based initially on a successful model developed in the Coorong area of South Australia.

It is only very early in our project (one year) but our experiences so far include:

• Although we mailed all farmers in the district, participants generally have higher levels of management skill and motivation than many ‘average’ farmers do.
• Farmers have not been exposed to structured environmental farm planning or EMS before and we are all still learning about what such systems might mean to the way people farm.
• There is a wide variety in the expectations from environmental farm planning, EMS and what farmers will learn from the project. Farmer involvement is motivated by a want to learn about the impact of agriculture on the environment rather than the specific process of developing an EMS.
• As has been the case with LEAF, there is understandable reluctance for farmers to adopt an externally audited EMS. Initially, record keeping may have to be improved before this would be possible. A direct move to ISO 14000 would not have worked well.
• The international farm planning schemes do not cover some environmental issues well enough for Australia (dryland salinity, water use efficiency, pasture management and remnant ecosystems being several examples). We hope our work will provide tools that will improve the skills of farmers in these areas and provide better self-assessment guidelines than those currently available.
• Our farmers have come up with a new scoring system for the self assessment questionnaire which they believe will work much better than the ‘yes/no’ used in LEAF or the 1-4 scoring system used in Farm*A*Sys. Single statements are used and farmers rank their answer from 1 (definitely no, or I do not use this management practice) to 5 (yes, I fully meet this statement). Farmers thought that the ‘yes/no’ approach was too ‘black and white’, and that the 1-4 scoring system did not always cover their management choices sufficiently well. The 1-5 scoring system allows farmers to answer questions rapidly.
• The monitoring tools will be a combination of calculation, measurement and observation skills. Given the importance of dryland salinity and water use in agricultural systems, we are initially focussing on developing tools to assess the frequency of deep drainage risk, the perenniality of farming systems and water use efficiency of the cropping enterprise.

It is too early to make many conclusions about the direction of development of an EMS for the Australian grains industry. However, several likely ones might be:

• Overseas experience indicates that EMS schemes are only likely to be adopted widely if they have strong ownership by farmers and/or there are financial incentives to do so. As there are no financial incentives in Australia (either through governments to encourage adoption of EMS or through price premiums on grain) EMS is not likely to be widely adopted by farmers. There would only be limited adoption by farmers who can find niche markets, are altruistic and/or who see enough benefit from the increased farm management skills learnt from adopting EMS. These problems raise issues of how to achieve widespread ownership from farmers (beyond the pilot participants) and developing rewards or penalties for environmental management.
• Despite the interest that ISO 14000 is generating amongst scientists and bureaucrats, there is little likelihood that EMS will be adopted by many without financial incentives (or penalties).
• There is potential that an EMS based on continuous improvement (but not specifying acceptable so called environmental performance standards) could be used more to gain a marketing advantage rather than as a true commitment to environmental management.
• Development of appropriate government policy that sends better environmental market signals to farmers is as important as developing on-farm EMS.
• It is too early to say whether our work towards developing an EMS will have a lasting impact on the environmental management of participating farmers, but we are optimistic.
• We are a long way off credible eco-labelling in the grains industry.
• The process of co-learning and action research, rather than being led through a learning cycle in an organised and sequential way, has irritated some farmers, whilst others are enjoying the approach.

* This article also appears in a compellation of proceedings from the conference “Environmental Management Systems in Australian Agriculture”, held in Ballina, New South Wales, Australia, May, 1999.
# Neil Gunningham is Director of the Australian Centre for Environmental Law, based at The Australian National University.
^ Darren Sinclair is Senior Research Associate at the Australian Centre for Environmental Law, based at The Australian National University.

To achieve outstanding triple bottom line performance, new types of economic, social and environmental partnership are needed. Long-standing enemies must shift from mutual subversion to new forms of symbiosis. The resulting partnerships will help each partner perform traditional tasks more efficiently, while providing a platform from which to reach towards goals that none of the partners could hope to achieve on their own.[1]

At the beginning of the 1990s, the idea of environmental partnerships was almost unknown. Relationships between business and non-governmental organisations (NGOs) were largely adversarial, and little attention was given to the prospect of constructive engagement between them. Relationships between business and government regulators, while sometimes less strained, were rarely based on the establishment of mutual trust, and the pursuit of "win-win" solutions.

Four things changed during the 1990s. First, many NGOs recognised that conflict and confrontation are not necessarily the best means of achieving the best environmental results. Second, governments and policy-makers increasingly lost faith in conventional forms of direct regulation (commonly referred to as "command and control"). Third, (and closely related to the last point above) there was a winding back of the regulatory state. Finally, and crucially, increasing number of business enterprises were influenced by the "greengold" thesis: the view that improving corporate environmental performance can be a net gain rather than a net loss. On this view, improved environmental performance has the potential to improve economic efficiency and business image, and generate new product and environment technology markets.

All this has created fertile ground for the development of more constructive relationships between major stakeholders, and in particular between government, business and environmental NGOs. These relationships will not necessarily be confined to agreements between business and NGOs, or between governments and business, but more broadly may embrace governments, NGOs, business and a range of other third parties, who, as we will see, held out the promise of acting as surrogate regulators and performing many of the functions that government regulation was no longer ready, willing and able to fulfil.

The result is that, at the end of the 1990s, (notwithstanding the numerical domination of conventional regulatory approaches) there are numerous examples of environmental partnership approaches across a wide variety of countries and continents. A recent search of the US Department of Agriculture's website revealed over seven thousand references to such partnerships (broadly defined)! Successful partnerships include the Netherlands "environmental covenants" approach, the United States Environment Protection Agency's (EPA) "Partners for the Environment" program, and in Australia, Landcare and the Greenhouse Challenge Program.

Although many of the "first generation" of environmental partnerships were developed in the war-torn arena of industrial pollution, they have since evolved in a variety of other environmental contexts. Of these, none is more important than that of agricultural production, an area which faces a wide range of serious environmental challenges, including loss of biological diversity, loss of natural habitats, pollution of off-farm ecosystems, and on-farm pollution occasioning loss of productivity. Closely related are the risks to human health posed by direct or indirect exposure to agricultural chemicals. Yet notwithstanding the severity of the environmental problems confronting agriculture, and their potentially disastrous long term implications, in the past only a very limited number of policy instruments have been employed to address these problems and most of these (as we have documented elsewhere[2]) have achieved only a very limited degree of success.

In contrast, the early evidence concerning environmental partnerships for sustainable agriculture, suggests that some partnerships at least, may achieve far more than the status quo. For example, Lori Ann Thrupp's exploration of nine collaborative sustainable agriculture initiatives focussed on the implementation of ecologically oriented integrated pest management, demonstrated very considerable improvements from this approach.[3] All nine projects, in very different countries and cultures, significantly: reduced agricultural inputs and costs, as well as health risks; regulated pests and diseases to acceptable levels; maintained or increased yields; contributing to productivity and food security; increased "health" of the farming system (eg soil quality and resilience) and spread the benefits widely and empowered communities.

Yet despite the potential policy significance of environmental partnerships, our knowledge of, what works and what doesn't work, and or how best to design environmental partnerships, both as free standing arrangements, and more importantly, in combination with complementary policy instruments, remains very limited. The jury is still very much out on these questions. And much of the evidence that is in, (which relates mainly to the industrial sector and to the "first generation" of environmental partnerships), suggests that many of these may be seriously under-performing.

To summarise, the challenge of sustainable agriculture is not only one of the most important issues confronting humankind, but also one desperately in need of more imaginative, constructive and above all, successful, policy instruments. The central question for this paper is whether, to what extent, and in what circumstances, environmental partnerships in agriculture have these qualities. When, where and how can such environmental partnerships be used to achieve solutions which, at the very least, move us closer to the ultimate goal of sustainable agriculture? And what role should environmental management systems play in achieving successful partnerships? Until we have a much clearing understanding of how, why, and in what circumstances some partnerships apparently succeed, whilst others demonstrably fail, and how and when to use management systems to optimise performance, we will not be in a position to determine the most effective structure and application of future partnership arrangements.

The remainder of the paper consists of four sections. First, we define more precisely what we mean by environmental partnerships. Second, we examine the particular benefits of partnerships as a strategy to achieve sustainable agriculture. Third, and crucially, we explore the circumstances under which environmental partnerships are most likely to be successful in achieving both economic and environmental goals. Here we envisage a central role for environmental management systems, including ISO 14001, and we examine at length, the contribution of EMS to successful partnerships and the value of ISO 14001 in particular. Finally, since successful partnerships will commonly not evolve spontaneously, we consider the role of government in encouraging, facilitating and developing such partnerships: a role which involves, in Osborne and Graebler's terms: "steering the boat rather than rowing it", and integrating partnerships with environmental management systems.

There is no formal or objectively correct definition of environmental partnerships. The term is increasingly used to apply not just to a range of circumstances in which various combinations of business, government and/or other third parties enter into specific understandings with each other but also to include a regulatory philosophy under which inspectorates work cooperatively with industry rather than seeking unilaterally to impose minimum standards upon them, and even to encapsulate a more facilitative way of "doing business" with other stakeholders. Indeed, so popular has the term become that it is in danger of losing all meaning, and simply becoming a "catch-all" phrase embracing all voluntary or cooperative approaches towards environmental policy. Given these difficulties, we have adopted the following provisional definition:

An environmental partnership is a cooperative agreement between, on the one hand, business, and, on the other hand, one or more second parties (government) and/or third parties (eg NGOs or commercial entities), whereby business voluntarily undertakes to achieve certain environmental improvements in exchange for some benefit provided by one or more of the other partnership participants.

There are three key components to this definition. First, there are the notions of "partnership" and "cooperation". A dictionary definition of partnership involves "players being on the same side or team". In this context, "partnership" implies that all participants agree to "cooperate" in contributing to the success of the program. This is a recognition that partnerships involve participants working together in a mutually supportive manner. That is, partnerships are a two way street, with reciprocal rights and responsibilities.

Second, there is the stipulation of "voluntary participation". Compulsion could never achieve the cooperation which is inherent in the concept of "partnerships", nor could it ensure that participants continue to strive for continuous improvement, or to foster cultural change such that participants integrate environmental sensibilities into their core business practices. In all these circumstances, volunteers perform immeasurably better than conscripts. In practice, however, it may be that some subtle forms of persuasion (bordering on coercion) are applied from a variety of quarters. For example, industry associations may apply pressure to their members to join; governments may threaten to apply harsher, more draconian regulatory standards; and NGOs may employ publicity campaigns. But how individual enterprises choose to respond to these outside pressures is very much up to them, and the agreements and partnerships they shape remain, in essence, voluntary.

Third, is the "exchange" of "benefits". This simply refers to a range of potential contributions from one group of participants which may induce participation from another group. For example, a producer may enjoy the use of a green label, conferred by an environmental NGO, in exchange for ensuring that certain mutually agreed environmental benchmarks are met. Or an industry group may negotiate an agreement on behalf of their members undertaking to provide improved environmental performance in exchange for various benefits and incentives provided by government.

Environmental partnerships may take many different forms. For example, "industry participation" may be individual or collective. Individual participation might involve several variations. For example, an umbrella partnership could be negotiated and implemented through an industry association, but participating companies could be left to establish individual targets. Or there may be a very broad partnership program which encompasses both individual companies and collective associations. And the agreement itself may also vary widely and take on many different features. For example, some may contain specific undertakings, whilst others may be largely devoid of such details. Then there is the question of whether agreements are legally binding. Many will be "binding in honour only" but some participants may wish to encapsulate their agreements into legally binding contracts. The form of an partnership will therefore likely depend on the particular structure and circumstances of the relevant industry sector and particularities of the environmental issue at hand.

Another reason why partnerships vary so widely is the diverse range of participants who might potentially be involved in such partnerships. These include: individual companies; a collective arrangement of companies, including industry associations; government (federal, state and/or regional); quasi government bodies (such as standard setting bodies and universities); retailers, wholesalers and consumers; and community organisations, including environmental and other public interest groups. There are also a very substantial number of possible partnership combinations, involving not only many possible permutations of bipartite partnerships, but also tripartite (or even multipartite) combinations.

It would not practical or particularly illuminating to describe in detail all the possible types of environmental partnership combinations. Instead, we provide an illustrative sample of some of the most common partnerships forms and combinations as a precursor to asking the key policy question: how, and in what circumstances do environmental partnerships work best?

Notwithstanding the almost exponential growth of environmental partnerships, very little systematic evaluation has been conducted as to what sorts of partnerships succeed and in what sorts of circumstances. In part, this may be because many partnerships have only recently been introduced, and it is too early to judge their success. It may also be that the diverse and disparate nature of environmental partnerships has worked against comparative analysis. Nevertheless, it is incumbent upon us, to the extent possible, to describe the relevant factors behind the success or otherwise of their operation. In so doing, we focus on those internal and external conditions which are most likely to generate a fertile environment within which partnerships can grow and prosper.

(ii) Exposure to green markets

A prominent feature of a substantial number of the most successful environmental partnerships is that they involve an industry partner whose products seek to compete on green markets. In the Northeast region of the United States, for example, consumers have a strong preference for apples and pears with minimal pesticide residues. Consequently, orchard growers participating in the Mothers and Others partnership program have a strong incentive to make their environmental partnership work. Green markets are not necessarily limited to the preferences of final consumers, with, for example, food processes in some cases favouring the purchase on low pesticide residue inputs, as is the case in the Wisconsin potato market (see below).

(iv) Disparities in power along the supply chain

Where large commercial enterprises have a high degree of market control over both their upstream suppliers and downstream buyers, they may chose to exploit this power to influence their environmental behaviour. Their interest in doing so is primarily commercial: the risk of being tarnished by the poor environmental performance of ones close associates. If pressure is brought to bear in a highly coercive fashion it may not be considered a bone fide partnership. However, it some cases supply chain partners can play more positive mentoring role. For example, under Responsible Care, large chemical companies assist their suppliers to implement accredited environmental management systems.

(v) The burning deck: getting partnerships off the ground

It is rare for environmental partnerships to arise spontaneously. Individuals and groups are usually reluctant to let go of their traditional ways of doing things. They are only prepared to put energy and resources into developing a new partnerships, if they see a compelling need to do so. Usually, but not always, the impetus comes from some crisis or other external event, that is so compelling as to shake the players free from their customary behaviour: most of us are only prepared to jump when we are convinced the deck is burning. In the case of the Australian meat industry, for example, the rejection of Australian beef by the United States because of its too-high pesticide content, and the fear of losing export markets, was one such event. In the case of the American nuclear power industry it was the Three Mile Island partial meltdown, and in the case of the chemical industry, the Bhopal chemical explosion.

However, the best time to engage in environmental partnerships is before the crisis hits - because afterwards it may be too late to repair all the damage, and some commercial opportunities may have been lost forever. Once you sell tainted produce on an export market, it is very hard to recover either your reputation or the market. That is, the best time to form environmental partnerships is when there are commercial opportunities both to protect the environment and to improve the bottom line, where both partners will benefit from the arrangement, and prior to the irreversible damage often associated with a crisis. But what will give farmers and rural industry the impetus to take that first step? Here, perceptions are as important as reality, and what is crucial is persuading rural industry in particular, to change its spots. We address this issue further below under "implications for government".

While the circumstances identified above may be the most fertile in which partnerships can grow, experience suggests that they must also be structured in ways which maximise their chance of success. Here, a number of features can be identified as of particular importance.

However, in the case of mature partnerships, and those capable of lending themselves to specific quantifiable targets, the adoption of such targets is highly desirable. Without them, there is the risk that the partnership may become vacuous, degenerate into "greenwash", and lose credibility. Since the essence of partnership is an exchange involving mutual gains, the absence of commitment by one partner to a particular target which the other regards as central, can threaten the entire basis of the partnership. In contrast, the establishment of negotiated targets in advance (perhaps in a memorandum of understanding signed by the partners) ensures that both sides have agreement and that a subsequent dispute will not arise from differing expectations. This also enhances credibility.

The next critical step towards achieving transparency is the development of an information system for collecting data on the progress of implementing the partnership agreement. The process usually divides into two parts: reporting and data collection, and collation and analysis of data. Reporting requirements usually adopt some form of self-reporting. An obvious problem this raises is why would an enterprise report information fully or accurately if it reflects poorly on its performance. And what about enterprises that are unwilling or unable to respond fully to often cumbersome reporting requirements? This brings us to verification and monitoring.

(iii) Monitoring and Verification.

The third and final step in achieving transparency - monitoring performance - also seems to be the most demanding and controversial. What makes it so are several thorny questions: How will the monitoring be structured? How will it be financed? Who will do the monitoring? This prompts a more general question. In view of all the effort, resources, and controversy surrounding the creation and maintenance of a monitoring system, what might motivate an industry partner to take such a step? At least part of the answer is that claims made by an industry partner may lack credibility. And from this credibility gap follows the need for some kind of independent confirmation of the industry's claims, by checking their accuracy, by monitoring the actual performance of partner companies, and so on. In other words, the environmental improvement targets set under the partnership agreement may require the incorporation of a workable set of performance indicators. Again, these may take the form of quantifiable or qualitative measurements. In either case, it is arguably that they should be determined in advance of the scheme's operation, preferably in conjunction with the target setting process.

But monitoring alone will not necessarily overcome the credibility gap, if the industry partner is still measuring its own performance. Independent verification may also be necessary. This is often painful. Opponents of verification highlight the risk independent audits pose to business autonomy, the confidentiality of trade secrets, as well as the danger that verification results could make them increasingly vulnerable to regulators, environmentalists, and litigation. Yet, despite these and other concerns, the development of an independent verification capability is often of fundamental importance to the long term viability of the partnership. Only then are community groups, NGOs, or even government agencies who are not themselves partners, likely to be convinced of the value of the arrangement. Suppliers and other commercial third parties will also want reassurance which can be provided, at least in part, by subjecting the arrangements to outside scrutiny. Certainly the verification process could be conducted in-house (eg by an "arms-length" audit team) but the closer the verifier is to the industry partner, the lower the credibility of their findings. Thus third party audits provide far greater reassurance to environmental partners and outsiders than internal audits.

There is a striking similarity between the substantial majority of the factors identified above, as key features of successful partnerships, and the central ingredients of environmental management systems. Such systems follow a defined sequence of steps which provide a structure for planning, implementation, reviewing and revising a system to address those parts of an enterprise's operations that can have an impact on the environment. In the case of ISO 14001, the further aim is to provide an international standard and a common (global) approach to environmental management and the measurement of environmental performance.

To meet the ISO 14001 standard, an enterprise must have a coherent framework for setting and reviewing environmental objectives, for assigning responsibility to achieve these objectives, and for regularly measuring progress towards them. It must also have appropriate management structures, employee training, and a system for responding to and correcting problems as they occur or are discovered. This implies documentation control, management system auditing, operational control, control of records, management policies, statistical techniques and corrective and preventive action.

However, while identifying environmental targets, performance monitoring, measuring and verification are all central to ISO 14001, third party audits and transparency (also identified above as key features of environmental partnerships) are not. These omissions have resulted in substantial criticism of the standard by NGOs and may well be addressed in the currently contemplated revisions of the standard. However there is nothing in ISO 14001 that precludes greater transparency and third party verification and these elements can readily be incorporated by those who wish to do so. External pressures (eg public opinion or pressure from trading partners) rather than ISO itself, will determine whether enterprises opt for such transparency of verification. If the experience of the quality standard ISO 9000 is repeated, then supply-chain pressure (as large companies, and multi-nationals in particular, require their suppliers to enter into contractual agreements committing themselves to and become certified to the standard) may prove the most important determinant of companies seeking external certification, while NGO and community pressure may lead to greater transparency.

To summarise: there are a number of key features of successful partnerships. Environmental management systems (including but not necessarily) ISO 14001, incorporate, or could readily incorporate, almost all of these features. So are environmental management systems a valuable vehicle for delivering the environmental and economic objectives of environmental partnerships? Absolutely!

Certainly they are not the only means of achieving improvements, but there is considerable evidence that EMSs can provide a powerful management tool, capable of enhancing an organisation's ability to attain, measure and monitor improvements, of delivering on its commitments (for example under a partnership) and of achieving substantially improved environmental performance.[5] If effectively implemented, such systems are capable of reducing environmental impact, delivering cost savings, improving operational efficiency and opening up new markets.[6] They also provide an objective basis for verifying a company's claims about its performance: a crucial consideration in international trade. Moreover, demonstrated adherence to ISO 14001 may also bring about improved community relations (insofar as information generated by ISO 14001 may be informative to local communities and enabling them to better judge the performance of ISO certified companies[7]) and improved risk management. Notwithstanding the risks of implementation failure and the limitations of ISO 14001,[8] on balance there are very considerable attractions in the adoption of an EMS as an integral part of many partnerships.

For present purposes, three additional benefits of adopting an EMS, and perhaps ISO in particular, should be mentioned. First, ISO 14001 may become important, indeed essential as a vehicle for facilitating trade and removing trade barriers.[9] This can be most readily illustrated by the behaviour of some of our Asian neighbours (and competitors). In Japan, exporters have responded by embracing ISO 14001 as the key to competitive global positioning. As one writer pointed out:

Japanese exporters, caught out when the ISO 9000 quality standards were introduced in Europe ten years ago, were determined to lead the world in adopting the ISO 14001 environmental standard to ensure they would not be disadvantaged in important export markets. In this they have succeeded - more than 1,000 Japanese sites have achieved certification so far.[10]

A number of other governments in the region apparently also believe that ISO 14001 will become a "ticket for admission to global markets for their exporting firms".[11] Largely for this reason, the Taiwanese environmental agency is developing a five-year EMS promotion plan, the Indonesian environmental ministry views EMSs such as ISO 14001 as a means of supplementing weak and inconsistent enforcement of regulations, and the Ministry of Environment in South Korea is developing an Environmentally Friendly Companies initiative (with participants required to have an EMS and a number of other ingredients consistent with "ISO 14001 Plus").[12]

In contrast to the enthusiasm with which ISO 14001 has been greeted by a number of Asian countries, in Australia, take up of the standard - at least at certification level - has been described as "sluggish". Two years after the introduction of ISO 14001 only an estimated 130 company certifications had taken place.[13] Only very slowly are Australian enterprises recognising the core role that environmental management systems can play in reassuring overseas customers of the enterprise's environmental credentials, and in enabling them to meet the increasingly stringent environmental expectations of international customers. Put differently, those who cannot demonstrate a commitment to sustainable environmental management may be excluded from some international markets by non-tariff trade barriers based on environmental issues.

A second potential benefit of adopting an EMS (though not necessarily ISO 14001) might be that of obtaining regulatory flexibility. If firms are given incentives by government to adopt a management systems approach (eg less frequent inspections, reduced licence fees, more flexibility in how they discharge regulatory responsibilities), then they will be facilitated in going "beyond compliance" with existing regulatory requirements. Victoria and Western Australia have already begun to adopt precisely this approach in introducing "accredited licenses" and "best practice" licenses respectively. Both of these initiatives offer regulatory flexibility to firms which commit themselves to a series of measures including an EMS, meeting specified minimum criteria, a regular environmental audit, community dialogue and transparency.[14]

A third benefit may be in terms of satisfying the demands of others in the supply chain. For example, an important impact of the Japanese push for ISO certification will be through supply chain pressure, as many ISO certified companies have adopted ISO related procurement policies and plan to issue environmental guidelines to their suppliers, insisting that they too, perform to ISO related standards. Elsewhere, the British retailer B&Q is requiring its suppliers to have an environmental policy backed by an audit, and the Body Shop has a supplier accreditation program with ratings of zero to five stars. Supply chain pressure is growing and ISO 14001 certification may increasingly become a key means of satisfying the environmental requirements of supply-chain partners. Agriculture is unlikely to be exempt from this development.

Many of the points made in the preceding sections can be graphically illustrated though the example of the Wisconsin Potato farmers' journey towards Integrated Pest Management (IPM).[15] For some years, the Wisconsin Potato and Vegetable Growers Association (WPVGA) has been concerned to reduce the use of broad-spectrum, high risk pesticides. There are a variety of reasons for this, some at least of which fit clearly within the "burning deck" scenario described earlier.

Economically, the Wisconsin potato industry has been under considerable economic threat, exacerbated by a substantial increases in pest management costs. By 1996 the Wisconsin potato growers did not recover production costs. There were also compelling reasons of health for reducing pesticide use: high levels of pesticide spraying are associated with serious health problems for rural community residents, farmers and their families. Finally, reducing pesticide use would improve the purity of the region's shallow ground water and enhance the quality of wildlife habitat and diversity of species sharing the agricultural landscape.[16]

IPM addressed all of these issues. Its particular attraction for the potato farmers is: "its capacity to expand profit margins by avoiding unnecessary pesticide applications and reducing pest pressure through a variety of means, some of which entail little or no cost".[17] Means of achieving this included cropping systems which enabled less pesticide use while still achieving acceptable levels of control, the success of border sprays or partial field applications, cultural practices that reduce Colorado beetle survival and movement from field to field, the introduction of an effective, affordable and safer insecticide for Colorado potato beetle control, and innovative applications of global positioning systems and precision farming techniques to identify variability in pest pressure, enabling spot sprays and more effectively timed applications to achieve maximum efficiency with minimum applied product. Located in terms of our previous discussion, smart use of IPM achieved win-win outcomes whereby both farmers (financially) and the environment, benefited. (Significantly, in areas such as plant disease control, where no win-win solutions were available, very little was achieved.)

(i) The Partnership with WWF

The Wisconsin Potato Project began not as a partnership but as an initiative solely by the potato growers, but as it matured, so the need for broader involvement and an environmental partnership became apparent. WPVGA did not need a partner to develop IMP but it did need some means of marketing the environmental advantages of low residue Wisconsin potatoes, and help in developing a premium market for environmentally friendly potatoes. Enter the World Wild Life Fund (WWF), an international and high profile environmental NGO whose panda logo and reputation could potentially provide considerable public relations, marketing and credibility advantages to WPVGA. In particular, the potato growers hoped the partnership with WWF would:

• Document progress in the adoption of bio-intensive IPM and reduction in reliance on high-risk pesticides.
• Quantify public health and environmental gains achieved as a result of industry-wide commitment to IPM.
• Gain recognition for Wisconsin potato products, especially in quality conscious markets.
• Support policy reform and public and private investments needed to enhance the effectiveness and lower the cost of bio-intensive IPM.[18]

For WWF, the partnership also held considerable attractions. For some time, WWF had been concerned to lessen reliance on pesticides and had identified IPM as the surest way to achieve this objective. Through the project WWF hoped to demonstrate:

• the value of setting measurable pesticide use, risk, and IPM adoption goals, and ways to do so;
• how monitoring and rewarding progress toward concrete goals can build the momentum needed to overcome technical and marketplace hurdles;
• a cooperative model for partnerships involving environmental and commodity groups committed to common goals; and
• analytical tools and policy innovations that will help achieve national IPM, food safety and environmental quality goals.[19]

Ultimately the WPVGA hoped to use the WWF panda logo on their bags of potatoes, thereby gaining a marketing edge, and increasing consumer demand. What WWF offered - its "Gift to the Earth" award - did have public relations and marketing advantages for the potato growers, but not ones as substantial as they had hoped for.

This is disappointing to the regulators. It can, however, be readily understood in terms of history: the regulators of the previous decades had demonstrated a rigid, uncompromising approach to regulation and (in the growers eyes) had demanded unnecessarily costly and unreasonable action. This memory lingers on, giving rise to mutual suspicion which at this stage at least, has not been fully overcome. One positive role of regulators in the potato growers initiative can however be identified: an additional driver of IPM was the fact that the EPA is moving towards the implementation of the Food Quality Protection Act (FQPA) which will require a more proactive approach to food quality issues. In this sense, the IPM Project can be seen, at least in part, as an initiative which took place at least in part, motivated by and "in the shadow of the law".

(iv) How the project succeeded

Three tools underpinned the success of the project. First, risk reduction goals were set. Specifically, the WWF-WPVGA Memorandum of Understanding spells out preliminary pesticide use and risk reduction goals for crop seasons 1997, 1999 and 2001. Two criteria were agreed upon in terms of these goals. Pesticides defined as causing an acute risk were to be reduced by 25% in 1997, by 50% by 1999 and to be phased out by end of crop season 2001, and pesticides defined as causing chronic risk. The latter had their reduction targets set at less ambitious levels (15% reduction) because of lack of evidence of human exposure in Wisconsin to their active ingredients, and because residues of these products are rarely found in fresh or processed potato products or drinking water.

Second, sophisticated mechanisms were put in place for measuring progress. An index of pesticide toxicity levels was developed, encompassing the ecological, environmental, and human health risks, including a "toxicity factor value" for each pesticide active ingredient. These composite values allow comparisons across active ingredients on a pound for pound basis. Third, and finally, key indicators of progress were developed. These included the 11 active ingredients of chemicals subject to reduction goals, industry-wide toxicity units, and toxicity units per Planted Acre.

The early results from the project demonstrate a quite striking level of success. In the first two years on the average acre planted, Wisconsin Potato farmers were able to:

• reduce per acre toxicity units 25% across the 11 pesticides subject to the acute and chronic risk reduction goals (more than meeting the first year reduction goal);
• decrease insecticide toxicity units by 61%; and
• achieve a 20% reduction in the toxicity units across all herbicides, insecticides and fungicides.

According to one assessment of the program, the Wisconsin growers' accomplishment is all the more remarkable in that it contrasts sharply with national trends: "Wisconsin reduced use of high-risk insecticides by over 60% in a year when national insecticide toxicity units per acre went up 6%. toxicity units associated with all herbicides, insecticides and fungicides applied in Wisconsin fell 20 percent between 1995 and 1997, but rose 16% nationwide" As WWF put it: "Toxic pesticide use has been dramatically cut on Wisconsin potato farms through a unique collaboration between environmentalists and farmers designed to protect human health, improve wildlife habitat, and help develop a premium market for environmentally friendly potatoes".[20] WWF also pointed to evidence that farmers who use fewer pesticides significantly increase their profit margins.

The success of the Wisconsin project depends upon either reducing the internal costs of production, or increasing demand and revenue for IPM potatoes. Adopting an EMS, and arguably ISO in particular, could make a substantial contribution on both these fronts. In terms of reducing production costs, the evidence shows that a management system approach can lead to considerable and continuous improvement in both economic and environmental performance. This includes reduced waste, improved understanding of procedures, decreased costs and in the future (to the extent that export markets are important) overcoming a potential trade barrier.

Equally important, a certified management system (eg ISO 14001) can provide the sort of guarantee than third parties require in order to be reassured that claims about reduced pesticide use and improved environmental performance are indeed correct. These third parties include not only consumers (who are only likely to express a preference for IPM potatoes if there is some independent means of distinguishing these from other potatoes) and bulk purchasers who may see attractions either in reducing their liability risk or in presenting a green image. As such ISO accreditation might help to promote the benefits of and increase demand for potatoes grown by project members. However, it must be emphasised that ISO does not permit the fact of certification to be included on product labels.

ISO 14001 environmental management systems standard might be used as the key mechanism to ensure compliance with the standards agreed between the Growers Association and their NGO partner. ISO 14001 independent auditors might be used to confirm that growers meet the IPM targets set by the Growers Association and WWF, and to enhance public confidence by ensuring that growers are reviewed by independent auditors in an operationally verifiable process.

The advantages of ISO 14001 were put more broadly by a senior member of the Department of Natural Resources as follows: "ISO 14000 represents a holistic tool [for] improving the entire eco-system. It also enables improvement in unregulated aspects of environmental protection. It leads us away from "command and control" and towards market based and community based incentive system to protect the environment, not only mitigate losses".[21]

Significantly, the WPVGA are indeed looking to develop their partnership program into a more sophisticated environmental management system, eligible for ISO 140001 certification. This would entail addressing a wider range of environmental issues, in addition to pesticide management, such as water management, air quality, soot and diesel particulates, fuel and energy consumption, and spills and groundwater contamination.

In the previous sections we have argued that environmental partnerships can play important roles in environmental protection. However, agricultural producers, NGOs and others, will not necessarily organise themselves into such partnerships, even when they might provide win-win outcomes. Conservatism, lack of awareness of the opportunities, and practical barriers such as the absence of mechanisms for offsetting risk, or lender resistance, may all militate against change. In the absence of external intervention, many of the potential opportunities for environmental partnerships may never be realised. Thus there is an essential policy role for government in encouraging, facilitating, rewarding and shaping such partnerships. That is, at the same time as the state is retreating from may of its traditional regulatory functions, numerous opportunities arise to forge creative new roles, harnessing private institutions and resources in furtherance of public policy.

The main implications for government include the following:

• Steering the boat rather than rowing: Government's traditional role has been that of intervening directly in the affairs of rural industry, for example by regulation. In circumstances where the partnership model is likely to be successful, the role of government is likely to be a less intrusive one: facilitating, encouraging rather than directly intervening.
• Kick-Starting environmental partnerships: Many partnerships will involve substantial start up costs and other initial barriers to their adoption. Government can play an important role in providing incentives sufficient to kick-start promising new partnership initiatives. Even if this involves money or other resources, the investment will be justified given that it will minimise the subsequent need for government intervention and resources, and may well achieve substantially better environmental and economic outcomes than traditional regulatory tools.
• Providing incentives: The precise incentives that government might provide to encourage environmental partnerships will vary widely with the circumstances but might include preference in government procurement contracts, a less attractive regulatory backdrop for those who do not wish to participate in partnerships, a legal underpinning to prevent free riding, or the use of cross-compliance mechanisms.
• Regulatory flexibility and EMSs: If firms who commit themselves to a certified management systems based approach can largely be relied upon to self-regulate, (perhaps subject to performance standards and with some modest amount of regulatory and third party oversight), then more efficient and effective use can be made of regulatory resources, while facilitating far greater autonomy and flexibility for business.
• Reducing risk: One of the difficulties in developing partnerships is the risk involved in moving from one system of production (eg intensive pesticide use) to another (eg Integrated Pest Management). Government may have a short-term role in reducing these risks if the private insurance market fails to do so.

While an emerging concept internationally, only very few environmental partnerships have emerged in the Australian agricultural sector, Landcare being the most prominent. Yet the potential exists for agricultural producers to achieve major benefits through participating in environmental partnerships along the model we suggest, and incorporating environmental management systems. These include:

• demonstrably improving the environmental performance of agricultural producers;
• improving the commercial productivity of farms through a reduction in business input costs (such as using less chemical pesticides);
• reducing the costs associated with land remediation (such as addressing soil erosion);
• providing access to new markets, or market niches, which demand the highest environmental standards for both products and processes;
• providing a marketing edge to participating producers and retailers/wholesalers;
• improving the quality consistency of agricultural products;
• pre-empting the imposition of de facto international environmental trade standards (such as ISO 14001);
• anticipating and avoid the imposition of future mandatory environmental regulations; and
• improving the long-term viability of the land itself.

However, at this stage, the answer to many of the key questions identified in our introduction, remains unclear. What is clear is that there are no magic bullets, and that what works will vary substantially depending on the circumstances. As such, the next stage of our research will be to conduct two contrasting industry sub-sector case studies. It is through these that we hope to gain a deeper understanding of the critical success factors and to provide practical recommendations concerning how partnerships can best achieve both their economic and environmental objectives.