Financial risk analysis of lucerne pasture establishment: Under-sowing vs direct sowing

Thomas Nordblom, Timothy Hutchings, Guangdi Li, Richard Hayes, John Finlayson

    Research output: Book chapter/Published conference paperConference paperpeer-review

    Abstract

    Over the past 80 years an unresolved issue in rain-fed crop-pasture rotations by
    scientists and farm advisors has been whether to recommend sowing a
    perennial pasture either alone or with a cereal cover crop. Researchers and
    agronomists have typically advocated sowing pastures alone to improve
    pasture productivity, but a large proportion of farmers continue to sow
    pastures under a cover crop suggesting a perceived financial advantage with
    the latter establishment method. Whether there is a real financial benefit of
    establishing pastures under a cover crop presents a practical Farm Financial
    Risk problem. Our study is based on four years of field experiment results (2008
    to 2012) along a 200 km transect running north and south of Wagga Wagga,
    New South Wales, Australia. Analysis of these results with information on local
    weather and price variations using “The Intensive Farming (IF) model”
    (Hutchings et al, 2016), suggests the following: (1) sowing the pasture alone is a
    more reliable method of establishing lucerne (Medicago sativa L.) pasture than
    sowing under a cover-crop; and (2) the additional costs of sowing a lucerne
    pasture alone are met in the majority of years by its increased productivity
    compared with pastures sown with cover-crops. Comparing median decadal
    cash balance values for pastures with stocking rates of 10, 15 and 20 dse/ha,
    our results show an advantage with direct-sowing for farms with high equity.
    Farms with low equity may not be helped by agronomic improvements, but find
    it best to focus on reducing debts.
    Original languageEnglish
    Title of host publication60th Conference proceedings of the Annual Conference of the Australian Agricultural and Resource Economics Society (AARES 2016)
    Place of PublicationAustralia
    PublisherAustralian Agricultural and Resource Economics Society (AARES)
    Pages1-18
    Number of pages18
    DOIs
    Publication statusPublished - 2016
    Event60th Annual Conference of the Australian Agricultural and Resource Economics Society (AARES 2016) - Hyatt Hotel, Canberra, Australia
    Duration: 02 Feb 201605 Feb 2016
    https://www.aares.org.au/files/past_conference_programs/AARES_2016_Conference_Program.pdf (Conference program)

    Conference

    Conference60th Annual Conference of the Australian Agricultural and Resource Economics Society (AARES 2016)
    Abbreviated titleFeeding and Energising Emerging Asia and the Pacific: Opportunities for Australia and New Zealand
    Country/TerritoryAustralia
    CityCanberra
    Period02/02/1605/02/16
    Internet address

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