Wet season resting - economic insights from scenario modelling

Pasture degradation, particularly that attributable to overgrazing, is a significant problem across the northern Australian rangelands. Although grazing studies have identified the scope for wet season resting strategies to be used to rehabilitate degraded pastures, the economic outcome of these strategies has not been extensively demonstrated. An exploratory study of the prospective economic value of wet season resting is presented using an economic simulation model of a 28000 ha beef enterprise located in the Charters Towers region of north-eastern Australia to explore seven hypothetical scenarios centred on the projected performance of a wet season resting strategy. A series of 20-year simulations for a range of pasture recovery profiles, stocking capacity, animal productivity responses, beef prices and agistment options are compared with a baseline scenario of taking no action. Estimates of the net present value of the 20-year difference in total enterprise gross margins between the various resting options and the 'do nothing' option identify that wet season resting can offer a positive economic return for the range of scenarios examined, although this is contingent on the assumptions that are made concerning the trajectories of change in carrying capacity and animal productivity. Some implications for management and policy making to support the practical implementation of wet season resting strategies are discussed.

Economic modelling of grazing systems in the Fitzroy and Burdekin catchments

The Great Barrier Reef (GBR) is the largest reef system in the world; it covers an area of approximately 2,225,000 km² in the northern Queensland continental shelf. There are approximately 750 reefs that exist within 40 km of the Queensland coast. Recent research has identified that poor water quality is having negative impacts on the GBR (Haynes et al. 2007). The Fitzroy Basin covers 143,000 km² and is the largest catchment draining into the GBR as well as being one of the largest catchments in Australia (Karfs et al. 2009). The Burdekin Catchment is the second largest catchment entering into the GBR and covers 133,432 km².The prime determinant for the changes in water quality entering into the GBR have been attributed to grazing, with beef production the largest single land use industry comprising 90% of the land area (Karfs et al. 2009). Extensive beef production contributes over $1 billion dollars to the national economy annually and employs over 9000 people, many in rural communities (Gordon 2007). ‘Economic modelling of grazing systems in the Fitzroy and Burdekin catchments’ was a joint project with the Fitzroy Basin Association and the Queensland Department of Employment Economic Development and Innovation. The project was formed under the federally funded Caring For Our Country and the Reef Rescue programs. The project objectives were as follows; * Quantifying the costs of over-utilising available pasture and the resulting sediment leaving a representative farm for four of the major land systems in the Burdekin or Fitzroy catchments and identifying economically optimal pasture utilisation rates * Estimating the cost of reducing pasture utilisation rates below the determined optimal * Using this information, guide the selection of appropriate tools to achieve reduced utilisation rates e.g. extension process versus incentive payments or a combination of both * Model the biophysical and economic impacts of altering grazing systems to restore land condition e.g. from C condition to B condition for four land systems in the Burdekin or Fitzroy catchments.

Enhancing economic input to the CQSS2 Project report. Commissioned by the Fitzroy Basin Association.

The Fitzroy Basin is the second largest catchment area in Australia covering 143,00 km² and is the largest catchment for the Great Barrier Reef lagoon (Karfs et al., 2009). The Great Barrier Reef is the largest reef system in the world; it covers an area of approximately 225,000 km² in the northern Queensland continental shelf. There are approximately 750 reefs that exist within 40 km of the Queensland Coast (Haynes et al., 2007). The prime determinant for the changes in water quality have been attributed to grazing, with beef production the largest single land use industry comprising 90% of the land area (Karfs et al., 2009). In response to the depletion of water quality in the reef, in 2003 a Reef Water Quality plan was developed by the Australian and Queensland governments. The plan targets as a priority sediment contributions from grazing cattle in high risk catchments (The State of Queensland and Commonwealth of Australia, 2003). The economic incentive strategy designed includes analysing the costs and benefits of best management practice that will lead to improved water quality (The State of Queensland and Commonwealth of Australia, 2003).

Paddock to Reef Monitoring and Evaluation: Economic analysis of ABCD cane management practices for the Mackay Whitsunday region

The economic analysis is based on the A, B, C and D management practice framework for water quality improvement developed in 2007/2008 by the respective natural resource management region. The Mackay Whitsunday ABCD management framework for sugarcane management practices was published in 2009 by the Department of Primary Industries & Fisheries (DPI&F), following the original version that was published in the Water Quality Improvement Plan: final report for Mackay Whitsunday region (2008).

Economic case study of ABCD cane management practices in the Burdekin River Irrigation Area (BRIA) region

A case study was undertaken to determine the economic impact of a change in management class as detailed in the A, B, C and D management class framework. This document focuses on the implications of changing from D to C, C to B and B to A class management in the Burdekin River irrigation area (BRIA) and if the change is worthwhile from an economic perspective. This report provides a guide to the economic impact that may be expected when undertaking a particular change in farming practices and will ultimately lead to more informed decisions being made by key industry stakeholders. It is recognised that these management classes have certain limitations and in many cases the grouping of practices may not be reflective of the real situation. The economic case study is based on the A, B, C and D management class framework for water quality improvement developed in 2007/2008 for the Burdekin natural resource management region. The framework for the Burdekin is currently being updated to clarify some issues and incorporate new knowledge since the earlier version of the framework. However, this updated version is not yet complete and so the Paddock to Reef project has used the most current available version of the framework for the modelling and economics. As part of the project specification, sugarcane crop production data for the BRIA was provided by the APSIM model. The information obtained from the APSIM crop modelling programme included sugarcane yields and legume grain yield (legume grain yield only applies to A class management practice). Because of the complexity involved in the economic calculations, a combination of the FEAT, PiRisk and a custom made spreadsheet was used for the economic analysis. Figures calculated in the FEAT program were transferred to the custom made spreadsheet to develop a discounted cash flow analysis. The marginal cash flow differences for each farming system were simulated over a 5-year and 10-year planning horizon to determine the net present value of changing across different management practices. PiRisk was used to test uncertain parameters in the economic analysis and the potential risk associated with a change in value.

Economic case study of ABCD cane management practices in the Burdekin Delta region.

A case study was undertaken to determine the economic impact of a change in management class as detailed in the A, B, C and D management class framework. This document focuses on the implications of changing from D to C, C to B and B to A class management in the Burdekin Delta region and if the change is worthwhile from an economic perspective. This report provides a guide to the economic impact that may be expected when undertaking a particular change in farming practices and will ultimately lead to more informed decisions being made by key industry stakeholders. It is recognised that these management classes have certain limitations and in many cases the grouping of practices may not be reflective of the real situation. The economic case study is based on the A, B, C and D management class framework for water quality improvement developed in 2007/2008 for the Burdekin natural resource management region. The framework for the Burdekin is currently being updated to clarify some issues and incorporate new knowledge since the earlier version of the framework. However, this updated version is not yet complete and so the Paddock to Reef project has used the most current available version of the framework for the modelling and economics. As part of the project specification, sugarcane crop production data for the Burdekin Delta region was provided by the APSIM model. The information obtained from the APSIM crop modelling programme included sugarcane yields and legume grain yield (legume grain yield only applies to A class management practice). Because of the complexity involved in the economic calculations, a combination of the FEAT, PiRisk and a custom made spreadsheet was used for the economic analysis. Figures calculated in the FEAT program were transferred to the custom made spreadsheet to develop a discounted cash flow analysis. The marginal cash flow differences for each farming system were simulated over a 5-year and 10-year planning horizon to determine the Net Present Value of changing across different management practices. PiRisk was used to test uncertain parameters in the economic analysis and the potential risk associated with a change in value.

Paddock to Reef Monitoring & Evaluation - Economic analysis of ‘ABCD’ cane management for Tully

The economic analysis is based on the A, B, C and D management practice framework for water quality improvement developed in 2007/2008 by the respective natural resource management region. This document focuses on the economic implications of these management practices in the Tully region. A review of the management practices is currently being undertaken to clarify some issues and incorporate new knowledge since the earlier version of the framework. However, this updated version is not yet complete and so the Paddock to Reef project has used the most current available version of the framework for the modelling and economics.

Economic case study of ABCD cane management practices in the Tully region

A case study was undertaken to determine the economic impact of a change in management class as detailed in the A, B, C and D management class framework. This document focuses on the implications of changing from D to C, C to B and B to A class management in the Tully region and if the change is worthwhile from an economic perspective. This report provides a guide to the economic impact that may be expected when undertaking a particular change in farming practices and will ultimately lead to more informed decisions being made by key industry stakeholders. It is recognised that these management classes have certain limitations and in many cases the grouping of practices may not be reflective of the real situation. The economic case study is based on the A, B, C and D management class framework for water quality improvement developed in 2007/2008 by the wet tropics natural resource management region. The framework for wet tropics is currently being updated to clarify some issues and incorporate new knowledge since the earlier version of the framework. However, this updated version is not yet complete and so the Paddock to Reef project has used the most current available version of the framework for the modelling and economics. As part of the project specification, sugarcane crop production data for the Tully region was provided by the APSIM model. Because of the complexity involved in the economic calculations, a combination of the FEAT, PiRisk and a custom made spreadsheet was used for the economic analysis. Figures calculated in the FEAT program were transferred to the custom made spreadsheet to develop a discounted cash flow analysis. The marginal cash flow differences for each farming system were simulated over a 5-year and 10-year planning horizon to determine the Net Present Value of changing across different management practices. PiRisk was used to test uncertain parameters in the economic analysis and the potential risk associated with a change in value.

Economic Analysis of Sugarcane Farming Systems for Water Quality Improvement in the Great Barrier Reef Catchments.

In this report we analyse the private financial-economic impacts of transitioning to improved sugarcane management in the National Resource Management regions of the Wet Tropics, Burdekin Dry Tropics and Mackay Whitsundays. In order to do so, we: 1) compare farm GMs; 2) present information on capital investment associated with the transition; 3) perform a net present value analysis of the investments and; 4) undertake a risk analysis for cane and legume yields and prices. It must be noted that transaction costs are not captured within this project.

Paddock to Reef Monitoring and Evaluation - Economic analysis of ‘ABCD’ cane management for the Burdekin Delta region.

The economic analysis is based on the A, B, C and D management practice framework for water quality improvement developed in 2007/2008 by the respective natural resource management region. This document focuses on the economic implications of these management practices in the Burdekin Delta region. A review of the management practices is currently being undertaken to clarify some issues and incorporate new knowledge since the earlier version of the framework. However, this updated version is not yet complete and so the Paddock to Reef project has used the most current available version of the framework for the modelling and economics.

Paddock to Reef Monitoring & Evaluation - Economic analysis of ‘ABCD’ cane management for the Burdekin River Irrigation Area.

The economic analysis is based on the A, B, C and D management practice framework for water quality improvement developed in 2007/2008 by the respective natural resource management region. This document focuses on the economic implications of these management practices in the Burdekin River Irrigation Area (BRIA). A review of the management practices is currently being undertaken to clarify some issues and incorporate new knowledge since the earlier version of the framework. However, this updated version is not yet complete and so the Paddock to Reef project has used the most current available version of the framework for the modelling and economics.

Is prosopis a curse or a blessing? : An ecological economic analysis of an invasive alien tree species in Sudan.

The issue of the usefulness of different prosopis species versus their status as weeds is a matter of hot debate around the world. The tree Prosopis juliflora had until 2000 been proclaimed weedy in its native range in South America and elsewhere in the dry tropics. P. juliflora or mesquite has a 90-year history in Sudan. During the early 1990s a popular opinion in central Sudan and the Sudanese Government had begun to consider prosopis a noxious weed and a problematic tree species due to its aggressive ability to invade farmlands and pastures, especially in and around irrigated agricultural lands. As a consequence prosopis was officially declared an invasive alien species also in Sudan, and in 1995 a presidential decree for its eradication was issued. Using a total economic valuation (TEV) approach, this study analysed the impacts of prosopis on the local livelihoods in two contrasting irrigated agricultural schemes. Primarily a problem-based approach was used in which the derivation of non-market values was captured using ecological economic tools. In the New Halfa Irrigation Scheme in Kassala State, four separate household surveys were conducted due to diversity between the respective population groups. The main aim was here to study the magnitude of environmental economic benefits and costs derived from the invasion of prosopis in a large agricultural irrigation scheme on clay soil. Another study site, the Gandato Irrigation Scheme in River Nile State represented impacts from prosopis that an irrigation scheme was confronted with on sandy soil in the arid and semi-arid ecozones along the main River Nile. The two cases showed distinctly different effects of prosopis but both indicated the benefits to exceed the costs. The valuation on clay soil in New Halfa identified a benefit/cost ratio of 2.1, while this indicator equalled 46 on the sandy soils of Gandato. The valuation results were site-specific and based on local market prices. The most important beneficial impacts of prosopis on local livelihoods were derived from free-grazing forage for livestock, environmental conservation of the native vegetation, wood and non-wood forest products, as well as shelterbelt effects. The main social costs from prosopis were derived from weeding and clearing it from farm lands and from canalsides, from thorn injuries to humans and livestock, as well as from repair expenses vehicle tyre punctures. Of the population groups, the tenants faced most of the detrimental impacts, while the landless population groups (originating from western and eastern Sudan) as well as the nomads were highly dependent on this tree resource. For the Gandato site the monetized benefit-cost ratio of 46 still excluded several additional beneficial impacts of prosopis in the area that were difficult to quantify and monetize credibly. In River Nile State the beneficial impact could thus be seen as completely outweighing the costs of prosopis. The results can contributed to the formulation of national and local forest and agricultural policies related to prosopis in Sudan and also be used in other countries faced with similar impacts caused by this tree.

Estimating the economic implications for grazing properties in the Mackay Whitsunday catchments of practice changes to more sustainable landscapes.

In the Mackay Whitsunday region, the dominant grazing based operations are small intensive systems that heavily utilise soil, nutrient and chemical management practices. To improve water quality entering the Great Barrier Reef, graziers are being encouraged to adopt improved management practices. However, while there is good understanding of the management changes required to reach improved practice classification levels, there is poor understanding of the likely economic implications for a grazier seeking to move from a lower level classification to the higher level classifications. This paper provides analysis of the costs and benefits associated with adoption of intensive grazing best management practices to determine the effect on the profitability and economic sustainability of grazing enterprises, and the economic viability of capital investment to achieve best management. The results indicate that financial incentives are likely to be required to encourage smaller graziers to invest in changing their management practices, while larger graziers may only require incentives to balance the risk involved with the transition to better management practices.

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.

Driving better vegetable irrigation through profitable practice change

The availability and quality of irrigation water has become an issue limiting productivity in many Australian vegetable regions. Production is also under competitive pressure from supply chain forces. Producers look to new technologies, including changing irrigation infrastructure, exploring new water sources, and more complex irrigation management, to survive these stresses. Often there is little objective information investigating which improvements could improve outcomes for vegetable producers, and external communities (e.g. meeting NRM targets). This has led to investment in inappropriate technologies, and costly repetition of errors, as business independently discover the worth of technologies by personal experience. In our project, we investigated technology improvements for vegetable irrigation. Through engagement with industry and other researchers, we identified technologies most applicable to growers, particularly those that addressed priority issues. We developed analytical tools for ‘what if’ scenario testing of technologies. We conducted nine detailed experiments in the Lockyer Valley and Riverina vegetable growing districts, as well as case studies on grower properties in southern Queensland. We investigated root zone monitoring tools (FullStop™ wetting front detectors and Soil Solution Extraction Tubes - SSET), drip system layout, fertigation equipment, and altering planting arrangements. Our project team developed and validated models for broccoli, sweet corn, green beans and lettuce, and spreadsheets for evaluating economic risks associated with new technologies. We presented project outcomes at over 100 extension events, including irrigation showcases, conferences, field days, farm walks and workshops. The FullStops™ were excellent for monitoring root zone conditions (EC, nitrate levels), and managing irrigation with poor quality water. They were easier to interpret than the SSET. The SSET were simpler to install, but required wet soil to be reliable. SSET were an option for monitoring deeper soil zones, unsuitable for FullStop™ installations. Because these root zone tools require expertise, and are labour intensive, we recommend they be used to address specific problems, or as a periodic auditing strategy, not for routine monitoring. In our research, we routinely found high residual N in horticultural soils, with subsequently little crop yield response to additional nitrogen fertiliser. With improved irrigation efficiency (and less leaching), it may be timely to re-examine nitrogen budgets and recommendations for vegetable crops. Where the drip irrigation tube was located close to the crop row (i.e. within 5-8 cm), management of irrigation was easier. It improved nitrogen uptake, water use efficiency, and reduced the risk of poor crop performance through moisture stress, particularly in the early crop establishment phases. Close proximity of the drip tube to the crop row gives the producer more options for managing salty water, and more flexibility in taking risks with forecast rain. In many vegetable crops, proximate drip systems may not be cost-effective. The next best alternative is to push crop rows closer to the drip tube (leading to an asymmetric row structure). The vegetable crop models are good at predicting crop phenology (development stages, time to harvest), input use (water, fertiliser), environmental impacts (nutrient, salt movement) and total yields. The two immediate applications for the models are understanding/predicting/manipulating harvest dates and nitrogen movements in vegetable cropping systems. From the economic tools, the major influences on accumulated profit are price and yield. In doing ‘what if’ analyses, it is very important to be as accurate as possible in ascertaining what the assumed yield and price ranges are. In most vegetable production systems, lowering the required inputs (e.g. irrigation requirement, fertiliser requirement) is unlikely to have a major influence on accumulated profit. However, if a resource is constraining (e.g. available irrigation water), it is usually most profitable to maximise return per unit of that resource.