Predicting the Mix for Sustainable Profits
Improving the profitability of farm businesses is the goal of this project.
Achieving the best mix of enterprises
A range of factors influence farmers' selection of enterprises. Whilst profitability is an important driver, many farmers are conscious of the effect of their actions on the environment and the potential impacts on future production.
Resistant weeds, water management and soil health are all examples of such impacts. Solutions may lie in achieving the best balance of enterprises by improved integration of crop and livestock production and better understanding the trade-offs that occur in mixed systems.
The National Whole-Farm Economics Project will determine how profit changes as the enterprise mix is altered to improve environmental outcomes, quantifying the financial aspects of these trade-offs.
The project economists are collaborating with other Grain & Graze research, such as the National Feedbase Management Project, to evaluate alternatives for integrating cropping and livestock enterprises.
Planning the future for the whole farm
The project will develop economic models to examine the relationship between profit, sustainability and enterprise mix of mixed farming systems in different regions. Unlike previous models, the new models will factor in different soil types; crop/pasture species; machinery capacity; crop sequence; allocation of feed to livestock; and environmental constraints.
How the project will work
Two approaches will be taken to provide information to farmers and researchers on the financial impact of changes to enterprise mix.
In two regions economists will work directly with farmers and apply a whole farm budgeting model to individual farms. The best scientific data available will guide the assessment of changes to farm strategy, to determine its effect on farmers' cashflow and profit.
In four regions whole farm optimising models will be used to explore a range of alternative strategies to determine the trade-offs between environmental and financial objectives. As these models can account for the interactions between enterprises, the financial value of the benefits of integration can be estimated.
This work will focus on the role of perennial pastures, grazing cereals and the way perennial pastures might be combined with crops.
Applying economic analysis
In the Eyre Peninsula region in South Australia, economists will work directly with 10-15 farmers to undertake individual assessments of the financial impact of different enterprise mixes.
In the Central West/Lachlan region in New South Wales, researchers will look at the biodiversity situation on farms and estimate each situation's ecological value. They will take into account the regional context of existing vegetation and potential changes to this vegetation.
The team of economists will then estimate the financial impact of these situations for individual farm businesses and the catchment. This will help determine the economic viability of alternative biodiversity outcomes. Specifically for this region, the estimate will include an assessment of the role of pasture cropping in improving profitability and biodiversity.
Project Coordinator
Andrew Bathgate
41 Trebor Road
Cuthbert, WA 6330
Phone: (08) 9841 5126
Email: bathgate@netconnect.com.au