Property Rights - the basis of a free & sustainable society
Landholders Institute
Article 28/11/02


The Council of Australian Governments (COAG) is currently looking at the issue of property rights, but few have a good grasp of what they are all about, so here is an overview.

What Are Property Rights?
Property Rights is a technical term that is being used in many different situations where the principle of ownership is being described.
It not only applies to land, but can also be applied to the sea, water, animals, goods, inventions (patents), authorship (copyright), and knowledge & ideas (intellectual property rights)
The basic principle is that someone has the rights to earn income or similar from something either tangible (e.g. land) or intangible (e.g. ideas).

In recent years there has been a tightening of laws regarding patents, copyright and intellectual property rights, while at the same time property rights to land and water have been "unbundled" and some (grazing, fencing, ploughing etc) have been removed while the landholder still holds the title.
This results in landholders not being able to earn as much income from that land, losing some of their asset / resale value of their land, which puts their family under a lot more stress.
Therefore landholders are adamant that any removal of property rights should be on "JUST TERMS" as stated in the Australian constitution.

Property Rights effects on Societies
Landholders also believe that the unjust removal of property rights will unwind the fabric of Australian society and few people realise this. Lets see if we can understand why.

Although no one gets taught this, the basic reason the western world has become so rich is because the population has a means of personal gain. In other words individuals can make income from either land, goods or ideas without the fear that others will take it from them. This incentive arrangement allows people to develope new industries, technologies, and be creative. It gives people in the western world a lot of freedom.
Musicians get rewarded for composing songs, Inventors get rewarded for inventing a better tool. Computer programmers get rewarded for writing a new program and so on.

There are laws that back up these property rights such as fines for selling pirated music recordings and videos because there is a recognition that the music and video industry would collapse if people`s intellectual and creative property rights are not protected.

The results of No Property Rights
Now this "reward for effort" system has not always been around. In many situations and countries there are no private property rights but a form of "RIGHTS IN COMMON"
This is where everyone (in theory) owns or has the rights to an area or a resource.

When we look at the results of this sort of system, we see over exploitation and often environmental collapse. The classic example would be Easter Island in the Pacific. Polynesians settled on the Island some centuries ago and at their height the Island supported several thousand people, but eventually the species of animals, birds and plants they lived on were hunted to extinction and the people eventually resorted to cannibalism and died out.

Communism which was based on no private property rights and centralised control of resources also failed.

After 30 million Chinese died of starvation in Communist China between 1959 to 1962, China tried high yield crops, irrigation, and fertilisation, but with little improvement.
Not until it allowed people to own property and sell goods in the 1970`s did production increase dramatically to the point where it now feeds over one fifth of the world`s population on one fifteenth of the world`s farmland. Since allowing private property, China has also increased the health of it`s people, up from 1,500 calories per capita in the early 1960`s to almost 3,000 calories per capita in 1998.

So from this, we can deduce that a system where the resource gets divided up for individuals to own, use and make income from is going to be more productive AND be sustained far better than one where everyone has a right to the resource (i.e. no private property rights).

So back to Australia

What positive effects do property rights give to our farmers and our Nation

There are many positive effects that secure property rights gives our society, and most are taken for granted. These include:

(1) Income generation - to not only make a living from, but to sustain and improve the land with.

(2) A secure asset to borrow against and realise when sold.

(3) The Incentive to develope better land management and productivity, and have it realised in a higher property value.

(3) A superannuation scheme, where all or part of the farm might be sold or leased to give the farmer income in retirement. Many farmers aim to be a self funded retirees which reduces the need for the Nation to pay the pension.

(4) A family legacy where children can be given a start in farming or a business by using the farm to borrow against.

(5) Personal pride and identity by being associated with your land and / or your families land.

(6) A stable society where people`s rights are respected

As Dwight Eisenhower once said "Our basic Freedoms have become almost the very
reason we exist, so that we may enjoy them and pass them, unalloyed, to our
grandchildren. It has been said that we must uphold property rights in the
free enterprise system against human rights. I say that is a false
statement. The right to property is only one of the human rights, and when
that falls, all else falls with it. The abolition of property rights means

Why is there a threat to property rights?

The primary reason property rights have been eroded is that governments have decided to try to improve environmental outcomes by control rather than by incentives or market mechanisms
For example.To conserve endangered ecosystems, they reduce the management options open to landholders, rather than buy the land or reward conservation outcomes.
This is much like saying to a car owner, "you can still drive your car as long as the wheels all stay in the shed", or to an author you still own your book, but you cannot get any income from selling it.

Who is against property rights?

The opposition to property rights are those that wish to have a centralised control of natural resources

Felicity Wishart from the Queensland Conservation Council said this on ABC radio:
"This is a very disturbing trend that we`re starting to see emerging.
Suggesting that farmers should have property rights really means that any
future government would not be able to bring in any legislation to control
activities on that land without having to pay compensation upfront. It would
mean that we wouldn`t be able to control clearing, that we wouldn`t
necessarily be able to stop any sorts of activities without having to pay a
big compensation bill, and that`s simply not a sustainable way to be moving
forward in the new millennium."

What is wrong with centralised control of Natural Resources?

Centralised control is a dictatorship, as well as being the opposite of a democracy (government of the people), it takes away the close relationship and personal care landholders have for the land they manage.
In recent years, Australia has allowed governments to become more dictatorial and get away with processes that only pretend to consult people.
If centralised control of natural resources continues, it will make Australia more like a communist country where the people care a lot less about the land and sustainability and productivity decrease.

What is the answer then?

Clearly there are some rock solid principles that must be upheld in the property rights debate

(a) Property rights are the best system around and for good management of resources, they must remain totally secure.

(b) "Just Terms" must be paid when property rights are removed by anyone & everyone

(c) If governments wish to improve environmental outcomes then the enhancement of property rights should be a cornerstone.

(d) If Governments do not want to not pay "Just Terms", then they should refrain from removing property rights and find ways to work with landholders in achieving better more cost effective means of conservation and other landscape goals.

(e) Whether the public likes it or not, it will have to pay for "public good" conservation one way (Just Terms) or another (an environmental tax / environmental incentives to farmers)

Landholders believe it`s time property rights were "etched in stone" and the public appreciated their necessity. Then the debate could move towards finding an efficient and cost effective means of improved environmental outcomes.

Leon Ashby,

Fellow of the Landholder Institute,
Dairy Farmer & Grazier,
1999 Qld Landcare Research Award Finalist,
Convenor of Landholders for the Environment,
President of BushVision Incorporated.

Kongorong SA, 5291
Ph 0887 389313