Dealing with salinity in Wheatbelt Valleys - Department of Water

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The cost of non-profitable systems to farmers and the state For the purposes of thinking through the implications of promoting the adoption of non-profitable perennial systems consider the following two scenarios. The scenarios are based on two different perennial systems that might be available to use water and limit the spread of salinity. Then the cost of implementing those options at a farm-scale or at a regional scale are considered. Scenario 1: A tree system that costs $1,000/ha to establish, then returns enough on an annual basis to break even with the alternative annual system Scenario 2: A perennial pasture system that costs about the same as the annual system to establish, but then returns $30/ha less each year than the alternative annual system. Other assumptions common to both scenarios are: • A target of 40% of the landscape covered with perennials is believed to be required to address salinity; • An average farm size of 2,500 ha; • A region the size of the central agricultural region is being targeted (say about 5m ha in extent – so 40% plantings of perennials would cover two million hectares). The simple calculation reveals the following implications: Scenario 1: The additional costs involved in adopting the non-profitable tree system over 40% of the landscape would be: • $1 million in ‘start up’ capital for each average sized farm; • $2 billion in ‘start up’ capital for the region; with no additional annual net costs over and above the annual system it replaces. Scenario 2: The additional costs involved in adopting the non-profitable ‘perennial pasture’ system over 40% of the landscape would require no additional initial investment to establish the system, but would result in the following ongoing impacts: • $30,000 per year net loss in perpetuity for an average sized farm; – 9 – Porter, Bartle and Cooper • $60 million per year net cost to the region. Clearly the amount of money required under these scenarios for farms ($1m initial investment or $30,000 per year) is outside the budget of individual landholders. At a whole region level, the amounts ($2b initial investment or $60m per year) are greater than the level of funding that governments have been willing or able to commit to salinity in one region in the past. The cost of Scenario 1 is more than the $1.5b spent Australia-wide on the Natural Heritage Trust. And the ongoing cost of Scenario 2 is equivalent to half the WA Department of Agriculture’s annual allocation from the Government for the entire state. The following sections reinforce the view that there is a critical need for investment to improve the economics of perennial systems. Whether changes in land management are driven by private investment for profit, public investment, or through regulation, the economics will determine their level of success. Economics of lucerne Given the short history of serious efforts to introduce perennials into the Wheatbelt it is not surprising that there have been few economic analyses of lucerne’s benefits to the farming system. Bathgate et al. (2000) undertook a study of the contribution of lucerne to the profitability of farming systems in three regions in the medium to high rainfall areas of WA. The results of the analysis showed that the value of lucerne to a farm system depends very much on the extent to which its profit is able to compete with that of crops on the same land. Where continuous cropping was an option, a system based on lucerne could not compete. Where animal enterprises were part of the farming system it was profitable to establish lucerne on up to 20% of the land, depending on the favorability of production and price factors towards the lucerne (Figure 2). The main profit drivers of a farming system including lucerne revolved around the animal components of the system (Table 6). The authors concluded that the amount of lucerne growth in summer is one of the most important factors. The summer growth can be used more efficiently by reducing grain feeding, increasing stocking rate (Figure 2) and altering flock structure from a wool flock to a wool and prime land flock, thereby further increasing the returns to lucerne.
Porter, Bartle and Cooper Increase in profit ($/ha) 160 120 80 40 0 Low SR High SR 300 350 400 450 Wool price (c/kg) Figure 2: Contribution of lucerne to farm profit at different wool prices stocking rates for the medium rainfall area of the Fitzgerald region (450mm). A low stocking rate (SR) implies grazing pressure was not increased after the introduction of lucerne Table 6: Relative contribution of factors that influence the benefits of lucerne to profit (from Bathgate et al. 2000) Increase in $/ha of rotation Change Relative Importance Wool price 4–5 50 c/kg greasy 3 South Coast Summer growth 4–12 700 kg DM/ha 2 South Coast Stocking rate 16 2 to 3 dse/ha 2 South Coast Region Flock Structure 17–18 wool to prime lambs 1 Great Southern Soil Structure N/A 5 NA Nitrogen fixation 1–2 30 kg/ha 4 Both Grain protein 3 1.5pp 4 Both Grain yield 6 10% 3 Both These analyses were based on little data. Bathgate et al. (2000) pointed out that the lucerne production data they used came from a small number of recent experiments that were conducted over seasons that were atypically wet. Young (2000), who analysed the economics of lucerne systems in the Kojonup area highlighted the lack of experimental data for animal performance and lucerne growth on which to base economic analyses. – 10 – Economics of mallee Mallee is not yet in commercial production. Some 900 farmers have planted 8,000 ha since 1994. This high level of commitment by growers was the basis for a feasibility investigation undertaken in 1999 by a consortium of the Oil Mallee Company, Western Power Corporation, Enecon and CALM. It will soon be published (RIRDC 2001). This investigation showed that mallee delivered as chipped green biomass for approx $30/tonne would make integrated processing commercially viable.
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Foreword Dealing with Salinity in W
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1Day one: Monday 30th July. Field t
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Papers Dealing with Salinity in Whe
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Ali and Coles biggest challenges fa
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Ali and Coles erosion, maintenance
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Ali and Coles expected under these
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Ali and Coles Coles, N.A. & Ali, M.
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Commander, Schoknecht, Verboom and
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APPRECIATING AND CREATING OUR HISTO
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services. The Government responded
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WHEATBELT VALLEYS IN DIFFICULTIES T
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argue that they were really abnorma
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1990s, the wheatbelt valleys in par
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REFERENCES Agstats (1997). Agricult
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George and Coleman two to four fold
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George and Coleman surface, the vas
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George and Coleman for example in t
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George and Coleman current trends c
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George and Coleman While not as div
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George and Coleman SPECIES Table 5:
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George and Coleman advantages of so
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George and Coleman this volume). In
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George and Coleman Venture Economy
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George and Coleman Lawrence, C. (19
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Hatton and Ruprecht WATCHING THE RI
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Since the mid 1970s annual rainfall
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Effect of clearing on runoff The ot
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Salinity Monthly streamflow (ML) 10
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The ratio of the salt outputs to in
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- 11 - Hatton and Ruprecht Table 4:
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THE FUTURE In looking at the future
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McFarlane, D.J., George, R.J. & Far
Page 89 and 90: Keighery, Halse and McKenzie Terres
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Page 97 and 98: Lloyd number of legal cases pending
Page 99 and 100: Lloyd 0 -500 -1000 -1500 -2000 -250
Page 101 and 102: Lloyd Table 3. Sheep grazing days i
Page 103 and 104: Lloyd Hectares project to provide w
Page 105 and 106: INTRODUCTION The Lake Chinocup Catc
Page 107 and 108: agriculture) in various stages, the
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Page 117 and 118: eliminates drainage through the nex
Page 119 and 120: REFERENCES Dawes, W.R., Stauffacher
Page 121 and 122: Pannell ECONOMICS, SOCIETY AND ENVI
Page 123 and 124: Pannell • the area of land protec
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Page 129 and 130: Pannell investments in long-term la
Page 131 and 132: Pannell Pannell, D.J. (2001). Dryla
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Page 149 and 150: CASE STUDY - TOOLIBIN LAKE AND CATC
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Page 157 and 158: CONCLUSIONS Actions to protect and
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with Salinity in Wheatbelt Valleys
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Photo Gallery 2 Dealing with Salini
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APPENDIX 1 BACKGROUND HYDROLOGY AND
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WHEATBELT HYDROLOGY Flow in the Yil
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Flow (ML) STREAM SALINITY Salt Rive
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APPENDIX 2 WATER MANAGEMENT OPTIONS
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APPENDIX 3 MANAGING WATER AND SALIN
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SUMMARY- TIMELINE OF RECENT SIGNIFI
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RECENT HISTORY OF WATER AND SALINIT
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Figure 1. Hydrological cross-sectio
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Depth (m) 316 315 314 313 312 311 M
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FURTHER INVESTIGATIONS AND MANAGEME
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