On-farm Economics of Laser Landforming for Rice Farmers

The whole farm financial effects of laser land forming were analysed using a two stage modelling procedure. In the first stage, linear programming models of representative Murrumbidgee Irrigation Area (MIA) rice farms were used to predict the profit-maximising activity mixes with and without successive increments of land forming. In the second stage, the profit-maximising activity mixes with and without an increment became inputs into a spreadsheet model designed to undertake discounted cash flow analysis of investment in the increment. The transition over time of yields to the achievable levels for land formed layouts was accounted for in the spreadsheet model, as were the effects of taxation (including taxation concessions for land forming) and access to concessional credit from the Special Conservation Scheme of the New South Wales Rural Assistance Authority. The analysis suggests that land forming the full area of a typical MIA rice farm is warranted, but that priority in allocating a limited capital budget should be given to areas requiring relatively low volumes of earth to be moved. A financial analysis of 'topsoiling' (replacing topsoil on areas from which it has been 'heavy cut' during land forming) showed it to generate considerably lower rates of return than land forming. Thus it appears land forming should be given priority overtopsoiling in allocating a limited capital budget.