This article provides an overview of agri-environmental policies in Australia and New Zealand. Unlike in other developed countries, there is generally no expectation in Australia and New Zealand that farmers will be fully compensated for the costs of complying with agri-environmental policies. Most expenditures aimed at changing farming practices are allocated to projects in particular locations and have specific targets. While this approach has the potential to support evidence-based targeting of policy expenditures, in practice, the quality of targeting and use of evidence have generally been low, reflecting an apparent lack of concern about policy efficiency and cost-effectiveness. For the same reason, early hopes about the potential to use conservation tenders to allocate agri-environmental funds have not been realized. In contrast, efforts to develop markets for irrigation water in Australia and water quality permits in New Zealand have persisted for many years, lessons have been applied, and economic and scientific evidence has been central in the policy process. Command and control regulation to restrict the clearing of native vegetation in Australia has produced mixed results. These policy experiences suggest that effective and efficient agri-environmental policies require a long-term government commitment and a willingness to change policies as needed.
