A framework for optimising capital investment and operations in livestock logistics

Despite the longevity, scale and importance of northern Australia's beef industry, recent disruptions to external markets have demonstrated a degree of vulnerability to shocks in the supply chain. Matching the industry's long-evident resilience to climatic variability with resilience to changes in markets and supply chains requires careful planning. One component of this is how investments in infrastructure will need to be planned to facilitate adaptive responses to market changes. This paper provides an outline of a modelling framework that links strategic and operational dynamic models of logistics along the supply chain from the property to the abattoir or port. A novelty of the methodology is that it takes into account the high granularity of individual livestock transport vehicle movements and the ability to scale up to an almost complete view of logistics costs across the entire beef industry of northern Australia. The paper illustrates how the methodology could be used to examine the effects of changes in logistics infrastructure on efficiency and costs using examples from the states of Northern Territory, Western Australia and Queensland.

Estimating the duration and cost of weed eradication programmes

Two prerequisites for realistically embarking upon an eradication programme are that cost-benefit analysis favours this strategy over other management options and that sufficient resources are available to carry the programme through to completion. These are not independent criteria, but it is our view that too little attention has been paid to estimating the investment required to complete weed eradication programmes. We deal with this problem by using a two-pronged approach: 1) developing a stochastic dynamic model that provides an estimation of programme duration; and 2) estimating the inputs required to delimit a weed incursion and to prevent weed reproduction over a sufficiently long period to allow extirpation of all infestations. The model is built upon relationships that capture the time-related detection of new infested areas, rates of progression of infestations from the active to the monitoring stage, rates of reversion of infestations from the monitoring to active stage, and the frequency distribution of time since last detection for all infestations. This approach is applied to the branched broomrape (Orobanche ramosa) eradication programme currently underway in South Australia. This programme commenced in 1999 and currently 7450 ha are known to be infested with the weed. To date none of the infestations have been eradicated. Given recent (2008) levels of investment and current eradication methods, model predictions are that it would take, on average, an additional 73 years to eradicate this weed at an average additional cost (NPV) of $AU67.9m. When the model was run for circumstances in 2003 and 2006, the average programme duration and total cost (NPV) were predicted to be 159 and 94 years, and $AU91.3m and $AU72.3m, respectively. The reduction in estimated programme length and cost may represent progress towards the eradication objective, although eradication of this species still remains a long term prospect.

Impact of reducing investment disincentives on the sustainability of the Moreton Bay prawn trawl fishery

The Moreton Bay prawn trawl fishery is one of Queensland’s oldest commercial fisheries, but is currently economically unsustainable. The fishery is characterized by a mix of large and small vessels, with the small vessels facing different licensing and boat replacement restrictions to the large. Industry have proposed the removal of the current two-for-one boat replacement policy that affects the smaller vessels to encourage investment and replacement by larger vessels, although there is concern by managers about the impact of this on total fishing effort and sustainability of the stocks, despite the existence of a total cap in vessel capacity units. We estimate the impact of removing the boat replacement policy for the smaller vessels on fleet performance and total fishing effort, and find that removing the boat replacement policy is unlikely to result in a substantial increase in fishing effort due to the existence of a vessel unitization scheme.

Assessing the cost-effectiveness of water quality interventions in South-East Queensland

The focus of this article is on the cost-effectiveness of mitigation strategies to reduce pollution loads and improve water quality in South-East Queensland. Scenarios were developed about the types of catchment interventions that could be considered, and the resulting changes in water quality indicators that may result. Once these catchment scenarios were modelled, the range of expected outcomes was assessed and the costs of mitigation interventions were estimated. Strategies considered include point and non-point source interventions. Predicted reductions in pollution levels were calculated for each action based on the expected population growth. The cost of the interventions included the full investment and annual running costs as well as planned public investment by the state agencies. Cost-effectiveness of strategies is likely to vary according to whether suspended sediments, nitrogen or phosphorus loads are being targeted.

Determination of management units for grey mackerel fisheries in northern Australia.

The requirement for Queensland, Northern Territory and Western Australian jurisdictions to ensure sustainable harvest of fish resources and their optimal use relies on robust information on the resource status. For grey mackerel (Scomberomorus semifasciatus) fisheries, each of these jurisdictions has their own management regime in their corresponding waters. The lack of information on stock structure of grey mackerel, however, means that the appropriate spatial scale of management is not known. As well, fishers require assurance of future sustainability to encourage investment and long-term involvement in a fishery that supplies lucrative overseas markets. These management and fisher-unfriendly circumstances must be viewed in the context of recent 3-fold increases in catches of grey mackerel along the Queensland east coast, combined with significant and increasing catches in other parts of the species' northern Australian range. Establishing the stock structure of grey mackerel would also immensely improve the relevance of resource assessments for fishery management of grey mackerel across northern Australia. This highlighted the urgent need for stock structure information for this species. The impetus for this project came from the strategic recommendations of the FRDC review by Ward and Rogers (2003), "Northern mackerel (Scombridae: Scomberomorus): current and future research needs" (Project No. 2002/096), which promoted the urgency for information on the stock structure of grey mackerel. In following these recommendations this project adopted a multi-technique and phased sampling approach as carried out by Buckworth et al (2007), who examined the stock structure of Spanish mackerel, Scomberomorus commerson, across northern Australia. The project objectives were to determine the stock structure of grey mackerel across their northern Australian range, and use this information to define management units and their appropriate spatial scales. We used multiple techniques concurrently to determine the stock structure of grey mackerel. These techniques were: genetic analyses (mitochondrial DNA and microsatellite DNA), otolith (ear bones) isotope ratios, parasite abundances, and growth parameters. The advantage of using this type of multi-technique approach was that each of the different methods is informative about the fish’s life history at different spatial and temporal scales. Genetics can inform about the evolutionary patterns as well as rates of mixing of fish from adjacent areas, while parasites and otolith microchemistry are directly influenced by the environment and so will inform about the patterns of movement during the fishes lifetime. Growth patterns are influenced by both genetic and environmental factors. Due to these differences the use of these techniques concurrently increases the likelihood of detecting different stocks where they exist. We adopted a phased sampling approach whereby sampling was carried out at broad spatial scales in the first year: east coast, eastern Gulf of Carpentaria (GoC), western GoC, and the NW Northern Territory (NW NT). By comparing the fish samples from each of these locations, and using each of the techniques, we tested the null hypothesis that grey mackerel were comprised of a single homogeneous population across northern Australia. Having rejected the null hypothesis we re-sampled the 1st year locations to test for temporal stability in stock structure, and to assess stock structure at finer spatial scales. This included increased spatial coverage on the east coast, the GoC, and WA. From genetic approaches we determined that there at least four genetic stocks of grey mackerel across northern Australia: WA, NW NT (Timor/Arafura), the GoC and the east Grey mackerel management units in northern Australia ix coast. All markers revealed concordant patterns showing WA and NW NT to be clearly divergent stocks. The mtDNA D-loop fragment appeared to have more power to resolve stock boundaries because it was able to show that the GoC and east coast QLD stocks were genetically differentiated. Patterns of stock structure on a finer scale, or where stock boundaries are located, were less clear. From otolith stable isotope analyses four major groups of S. semifasciatus were identified: WA, NT/GoC, northern east coast and central east coast. Differences in the isotopic composition of whole otoliths indicate that these groups must have spent their life history in different locations. The magnitude of the difference between the groups suggests a prolonged separation period at least equal to the fish’s life span. The parasite abundance analyses, although did not include samples from WA, suggest the existence of at least four stocks of grey mackerel in northern Australia: NW NT, the GoC, northern east coast and central east coast. Grey mackerel parasite fauna on the east coast suggests a separation somewhere between Townsville and Mackay. The NW NT region also appears to comprise a separate stock while within the GoC there exists a high degree of variability in parasite faunas among the regions sampled. This may be due to 1. natural variation within the GoC and there is one grey mackerel stock, or 2. the existence of multiple localised adult sub-stocks (metapopulations) within the GoC. Growth parameter comparisons were only possible from four major locations and identified the NW NT, the GoC, and the east coast as having different population growth characteristics. Through the use of multiple techniques, and by integrating the results from each, we were able to determine that there exist at least five stocks of grey mackerel across northern Australia, with some likelihood of additional stock structuring within the GoC. The major management units determined from this study therefore were Western Australia, NW Northern Territory (Timor/Arafura), the Gulf of Carpentaria, northern east Queensland coast and central east Queensland coast. The management implications of these results indicate the possible need for management of grey mackerel fisheries in Australia to be carried out on regional scales finer than are currently in place. In some regions the spatial scales of management might continue as is currently (e.g. WA), while in other regions, such as the GoC and the east coast, managers should at least monitor fisheries on a more local scale dictated by fishing effort and assess accordingly. Stock assessments should also consider the stock divisions identified, particularly on the east coast and for the GoC, and use life history parameters particular to each stock. We also emphasise that where we have not identified different stocks does not preclude the possibility of the occurrence of further stock division. Further, this study did not, nor did it set out to, assess the status of each of the stocks identified. This we identify as a high priority action for research and development of grey mackerel fisheries, as well as a management strategy evaluation that incorporates the conclusions of this work. Until such time that these priorities are addressed, management of grey mackerel fisheries should be cognisant of these uncertainties, particularly for the GoC and the Queensland east coast.

A case study on the economics of overhead irrigation in the lower Burdekin

Converting from an existing irrigation system is often seen as high risk by the land owner. The significant financial investment and the long period over which the investment runs is also complicated by the uncertainty associated with long term input costs (such as energy), crop production, and the continually evolving natural resource management rules and policy. Irrigation plays a pivotal part in the Burdekin sugarcane farming system. At present the use of furrow irrigation is by far the most common form due to the ease of use, relatively low operating cost and well established infrastructure currently in place. The Mulgrave Area Farmer Integrated Action (MAFIA) grower group, located near Clare in the lower Burdekin region, identified the need to learn about sustainable farming systems with a focus on the environment, social and economic implications. In early 2007, Hesp Faming established a site to investigate the use of overhead irrigation as an alternative to furrow irrigation and its integration with new farming system practices, including Green Cane Trash Blanketing (GCTB). Although significant environmental and social benefits exist, the preliminary investment analysis indicates that the Overhead Low Pressure (OHLP) irrigation system is not adding financial value to the Hesp Farming business. A combination of high capital costs and other offsetting factors resulted in the benefits not being fully realised. A different outcome is achieved if Hesp Farming is able to realise value on the water saved, with both OHLP irrigation systems displaying a positive NPV. This case study provides a framework to further investigate the economics of OHLP irrigation in sugarcane and it is anticipated that with additional data a more definitive outcome will be developed in the future.

Economic evaluation of precision controlled traffic farming in the Australian sugar industry: a case study of an early adopter

Controlled traffic has been identified as the most practical method of reducing compaction-related soil structural degradation in the Australian sugarcane industry. GPS auto-steer systems are required to maximize this potential. Unfortunately there is a perception that little economic gain will result from investing in this technology. Regardless, a number of growers have made the investment and are reaping substantial economic and lifestyle rewards. In this paper we assess the cost effectiveness of installing GPS guidance and using it to implement Precision Controlled Traffic Farming (PCTF) based on the experience of an early adopter. The Farm Economic Analysis Tool (FEAT) model was used with data provided by the grower to demonstrate the benefits of implementing PCTF. The results clearly show that a farming system based on PCTF and the minimum tillage improved farm gross margin by 11.8% and reduced fuel usage by 58%, compared to producers' traditional practice. PCTF and minimum tillage provide sugar producers with a tool to manage the price cost squeeze at a time of low sugar prices. These data provide producers with the evidence that investment in PCTF is economically prudent.