1. 1

2. Future Farm Industries Cooperative
Research Centre: Profitable
Perennials
R R Farquharson, A Abadi, C Lewis, J
McGrath, and K Goss

3. Objectives of this talk
1. Outline the FFI CRC objectives
 Headline farming systems
 Impacts of the CRC
 An economic evaluation
1. Some issues in adoption of one
technology
 New pastures in southern Australia
 Risks and returns in a variable climate

4. 4
1. FFI CRC objectives
Develop ‘Profitable Perennials’ to ..
Change the nature of farming
Create new industries
Inform the management of catchments
.. in southern Australia
Context
Typical (historical) climate variability
Potential future climate change
Activities
R&D, Education and Training

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Headline farming
systemsEverGraze – pasture & livestock systems for HRZ
Enrich – fodder shrubs in mixed farming systems
EverCrop – perennials in crop-dominated systems
New Woody Crop Industries – woody perennials
integrated in mixed farms
Saltland Systems – production from saltland in mixed
farming systems
Environment – perennials & their environmental
footprint in dryland agricultural landscapes

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How?
Conducts farming systems-based R&D
With numerous partners
Purpose - develop Profitable PerennialsTM
Increase productivity of existing industries
Develop new regional industries through investment in woody
crop production on farm
Reduce the risk of natural resource degradation, including dryland
salinity
Improve conservation of biodiversity & water resources
Impacts expressed as changes in key headline
farming systems
Direct monetary benefits & additional non-monetary
benefits

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Types of benefits
Monetary benefits
Costs and impacts
Discounted cash flow (5%)
Adoption pattern
Environment
Adoption of INFFER
Improvement in NRM investment and policy
Non-monetary impacts
Water use, biodiversity, weed risks
Science capability & capacity building
Risk analysis

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Monetary impacts
Indicator Unit Analysis
Program impact life span Year 2007-21 2007-30
Land impacted Mha 2.07 5.90
Net benefits (Most likely
scenario)
$M 808 2,510
Net benefits (Conservative
scenario)
$M 513 1,460

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Adoption pattern

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2. Adoption of pastures
Perennial pastures Western Victoria HRZ
DCF analysis – time and risk dimensions
Representative whole-farm analysis
• Including
Livestock carrying capacity, extra return on
capital invested, finance implications, partial
development budget approach, includes
climatic risk
Generate information for farmers/extension re
adoption
Climate variability & pasture investment

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Representative farm
Enterprise Lambing/calving Area (ha) Product
Sheep 800
- SR Merino September 560 Wool
- Mer x White
Suffolk
July 240 Prime lambs
Beef
- Angus April 200 Steers & cull heifers

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Comparisons
Base Case
Rye grass/sub clover with capeweed at Hamilton
EverGraze Triple
SARDI7 Lucerne, Avalon rye, Quantum Tall Fescue
EverGraze Ryegrass
Fitzroy rye, Avalon rye, Banquet rye
Pasture growth and quality included
Gross Margins, importance of supplementary feed costs
NPV & IRR

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Cumulative NCF

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Risk-return analysis
Mean-variance efficiency (Hardaker)
Importance of stocking rate

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Conclusions
Potential economic (& non-economic) impacts
of FFI CRC activities are substantial for
southern Australian dryland livestock-
cropping systems
An ex ante analysis based on projected
benefits
For one pasture technology, we investigated
Cash flow, investment & risk-return
trade-offs for farm-level adoption
Links - climatic risk, profitability & adoption

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Acknowledgements