With a title like “Precious arable land”, needless to say, I’ve read with interest Eric Crampton’s opinion piece published on Sciblogs recently.
It followed the release of Our Land 2018, the Ministry for the Environment’s report about the state of New Zealand’s land resources. One of the main outcomes of this report is the impact of urban sprawl over some of New Zealand most valuable soils, a major issue identified by the soil science community1,2,3 and the basis for setting up strategies to protect these soils.
Alas, the irony of the title was lost on me, and the article the author penned actually suggests the protection of these versatile soils is not needed — despite what is advocated by the “anti-sprawl people” (a mysterious conglomerate formed when the “Let’s protect Precious Agricultural Land” people teamed up with the “Let’s protect Precious Neighborhood Amenity”). At the heart of Eric Crampton’s argumentation is the fact that the value of soils is somewhat accounted for by the market:
“But suppose you have an agricultural paddock near town. The land can produce horticultural crops worth, say, $1m per year net after costs. The present discounted value of that stream of profits gets capitalised into the price of the land. And so the price of the land will already reflect peoples’ expectations about the value of the agricultural produce that will come out of that land over the long-term.”
Ha, the proverbial wisdom of the invisible hand of the market.
The true value of soil
The problem with this line of thinking is that the value of agricultural outputs produced out of a piece of land represents only a minor part of the overall value we get from the land. Apart from food and fibre production, there is a wide range of services that, at heart, are provided by soil: filtering nitrates, storing water, mitigating flood risk, or storing carbon. The provision of this multitude of services is why soils are an important determinant for the economic status of nations as a whole4. And it is also for this reason that soils are a critical part of the environmental infrastructure of any nation, and at the intersection of most of the challenges they face5:
- Food security
- Energy security
- Ecosystem services provision
- Biodiversity protection
- Climate change abatement
- Water security
Critically, food production is only one service addressing one of such challenges. And unfortunately for soils, the other services they provide are not easily quantified, and therefore very poorly captured by markets6.
“If a developer is able to pay the farmer more than that, that tells us something important. It tells us that the value of that land in housing is higher than the value of that land in agricultural use. The value of all the agricultural output is already accounted for in the price of the land. So you really don’t need to protect valuable agricultural land from developers. The price of agricultural land already does that.”
The value the developer is ready to pay the farmer for only covers one service that is only relevant for one user (food production for the farmer, building support for the developer). The overall value for the other users (the rest of society if you want) is unaccounted for.
Soil is a finite resource
The other reasons the soil science community (which I guess is referred to as “the Let’s protect Precious Agricultural Land people”) argues for more protection for versatile soils has to do with the way their very nature. The timescale at which the value of land is considered is way too short. Crampton thinks about returns on a yearly basis, when a mature soil will need anywhere between 10 and 50,000 years to form and can continue providing services across generations.
Moreover, soils and their properties vary a lot across New Zealand. The versatile soils we are talking about, the soils surrounding Auckland, are incredibly rare (5% of NZ’s are for versatile soils, less than 1% if we are talking elite soils).
The need for policy to protect soils
Soils are a finite resource: once we build on them, there’s no going back, on a human timescale. And like housing, it’s not a resource we can import. So we have to think very strategically about the soils we want to retain for their services, and those we want to sacrifice to housing (and there’s no question we need to do that).
“Banning development on that land only makes sense if you really really believe that the person putting in the ban knows better than either the owner of the land or the purchaser of the land the future price path of agricultural products or dwellings. And in that case the person putting in the ban should just be buying the land directly and reaping the huge and obvious profits from knowing better than the market about futures prices.”
It’s not so much that “the person putting in the ban knows better than either the owner of the land”, it’s that the value the government puts on the soil resource goes beyond (i) food and fibre production, and (ii) the rather short timescale used by developers. Banning the development on our best soils makes sense because it acknowledges the true value of the resource, its finitude, and the need to protect it across generations.
Call that kaitiakitanga if you prefer.
Pierre Roudier is a scientist in the Soils & Landscapes team at Manaaki Whenua – Landcare Research, and a Principal Investigator at Te Pūnaha Matatini.
1: Andrew, R. and Dymond, J.R., 2013. Expansion of lifestyle blocks and urban areas onto high-class land: an update for planning and policy. Journal of the Royal Society of New Zealand, 43(3), pp.128-140.
2: Curran-Cournane, F., Vaughan, M., Memon, A. and Fredrickson, C., 2014. Trade-offs between high class land and development: Recent and future pressures on Auckland’s valuable soil resources. Land Use Policy, 39, pp.146-154.
3: Curran-Cournane, F., Golubiewski, N. and Buckthought, L., 2018. The odds appear stacked against versatile land: can we change them? New Zealand Journal of Agricultural Research, pp.1-12.
4: Daily, G.C., Matson, P.A. and Vitousek, P.M., 1997. Ecosystem services supplied by soil. Nature’s services: societal dependence on natural ecosystems, pp.113-32.
5: McBratney, A.B., Field, D.J. and Koch, A., 2014. The dimensions of soil security. Geoderma, 213, pp.203-213.
6: Costanza, R., d’Arge, R., De Groot, R., Farber, S., Grasso, M., Hannon, B., Limburg, K., Naeem, S., O’Neill, R.V., Paruelo, J. and Raskin, R.G., 1997. The value of the world’s ecosystem services and natural capital. Nature, 387(6630), p.253.