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

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.