Dr Fisher said that legislation imposed by state governments restricting broad scale clearing and management of native vegetation, intended to meet increased community demands for improved environmental outcomes, had become more restrictive in many states over the past decade or so.

"The cost of forgone cropping opportunities could be as high as $460 million to farmers in the

150 000 square kilometre study region of New South Wales," Dr Fisher said. "The cost could exceed $36 500 for half the farmers in that region and exceed $1 million for some significantly affected landholders," he said.

This May lead to society forfeiting "free" environmental benefits flowing from activities that many farmers undertake routinely and generally more efficiently than governments, according to ABARE's research.

"Many farmers undertake activities, such as vermin and weed control that are of both private and public benefit," explained Dr Fisher.

"However, a decline in profitability induced by native vegetation regulations May lead to lower levels of pest control," he said.

Dr Fisher went on to explain that the cost of conserving native vegetation is likely to be an important factor in determining the future competitiveness of Australia's broadacre agriculture industries on world markets.