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Factors influencing potential scale of adoption of a perennial pasture in a mixed crop-livestock farming system

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  • Byrne, F.
  • Robertson, M.J.
  • Bathgate, A.
  • Hoque, Z.
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    Abstract

    Evaluating the potential scale of adoption of a technological innovation or management practice at the farm business scale can help gauge the potential size of an industry for the purposes of prioritising resources for research and development. In this paper we address the question of quantifying the potential area of adoption of a perennial pasture, lucerne (Medicago sativa L.), in dryland mixed farming systems in Australia. Lucerne pastures play a significant role in dryland farming systems in the wheat-sheep zone of southern and western Australia. While there are benefits of integrating lucerne into cropping systems there will inevitably be additional costs, and the scale of adoption of lucerne will depend largely on the increase in farm profit resulting from the introduction of lucerne. Whole-farm economic models of representative farms in the Australian wheat-sheep belt were used to determine the key drivers for the scale of adoption of lucerne. For a particular farming system the optimal area of lucerne which maximises whole-farm profit is found to depend on production, price and cost conditions. Generally, no more than 30% of a farm was allocated to lucerne according to those conditions and location of the farm. For most scenarios examined the response of profit was flat around the optimal area. This implies that lucerne could be grown on areas greater than the optimum, in order to reduce groundwater recharge (and thereby reduce the risk of dryland salinity), without greatly reducing whole-farm profit. The optimal area of lucerne in all regions was limited by the area of suitable soil types and proportion of lucerne in the most profitable lucerne-crop sequences. At all price levels assumed in this study lucerne remained as part of the optimal enterprise mix for all farm types examined. Lucerne productivity was also a major determinant of the optimal area of lucerne. The sensitivity of profit to changes in winter and/or summer production varied between regions and for different livestock enterprises. The differences were driven by the timing of energy demands and supply of feed in individual farming systems. In all regions the optimal area and profitability of lucerne varied with livestock enterprise. The analyses showed that changing from wool production to meat production enabled greater economic benefit to be realised from lucerne. This was consistent across farm types and demonstrated the value of lucerne as a source of high quality feed for finishing prime lambs in summer. The results of this study demonstrate that lucerne is profitable in a range of environments on a significant proportion of the farm area, but that this area is small relative to that required to significantly influence in its own right the environmental issue of salinity.

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    Bibliographic Info

    Article provided by Elsevier in its journal Agricultural Systems.

    Volume (Year): 103 (2010)
    Issue (Month): 7 (September)
    Pages: 453-462

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    Handle: RePEc:eee:agisys:v:103:y:2010:i:7:p:453-462

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    Web page: http://www.elsevier.com/locate/agsy

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    Keywords: Lucerne Economics Australia Dryland;

    References

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    1. Wang, K.M. & Curtis, K.M.S., 1992. "A Dynamic Optimisation of Summer/Autumn Feeding Strategies for Wool Production in the Mediterranean Environment of Western Australia," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(03), December.
    2. Pannell, David J., 1997. "Sensitivity analysis of normative economic models: theoretical framework and practical strategies," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 16(2), May.
    3. Michele John & David Pannell & Ross Kingwell, 2005. "Climate Change and the Economics of Farm Management in the Face of Land Degradation: Dryland Salinity in Western Australia," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 443-459, December.
    4. David J. Pannell, 2006. "Flat Earth Economics: The Far-reaching Consequences of Flat Payoff Functions in Economic Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 553-566.
    5. Trapnell, Lindsay N. & Ransom, Kieran P. & Hirth, Jeff R. & Naji, Riad & Clune, Tim S.R. & Crawford, Michael C. & Harris, Ron H. & Whale, James & Wilson, K.F., 2005. "Net Benefits from Investing in Lucerne (Medicago sativa) Phase Farming Systems in the Mixed Farming Zone of Northern Victoria," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137952, Australian Agricultural and Resource Economics Society.
    6. Kingwell, Ross S. & Pannell, David J. & Robinson, Stephen D., 1993. "Tactical responses to seasonal conditions in whole-farm planning in Western Australia," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 8(3), March.
    7. Pannell, David J., 1997. "Sensitivity analysis of normative economic models: theoretical framework and practical strategies," Agricultural Economics, Blackwell, vol. 16(2), pages 139-152, May.
    8. Salerian, John, 1991. "Application of an Economic Model to Dryland Soil Salinity in Western Australia," The Economic Record, The Economic Society of Australia, vol. 0(0), pages 97-108, Supplemen.
    9. Kingwell, Ross S. & Pannell, David J. & Robinson, Stephen D., 1993. "Tactical responses to seasonal conditions in whole-farm planning in Western Australia," Agricultural Economics, Blackwell, vol. 8(3), pages 211-226, March.
    10. Bathgate, Andrew & Pannell, David J., 2002. "Economics of deep-rooted perennials in western Australia," Agricultural Water Management, Elsevier, vol. 53(1-3), pages 117-132, February.
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    Cited by:
    1. Kragt, Marit E. & Robertson, Michael J., 2014. "Quantifying ecosystem services trade-offs from agricultural practices," Ecological Economics, Elsevier, vol. 102(C), pages 147-157.
    2. Finlayson, J.D. & Lawes, R.A. & Metcalf, T. & Robertson, M.J. & Ferris, D. & Ewing, M.A., 2012. "A bio-economic evaluation of the profitability of adopting subtropical grasses and pasture-cropping on crop–livestock farms," Agricultural Systems, Elsevier, vol. 106(1), pages 102-112.

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