Case studies

Four case studies have been developed as part of the project which and these illustrate possible pathways to sustainable wool production in the region.

These case studies were developed from the observation of practices, feedback from landholders and research findings. The case studies should be considered in light of several qualifications:

  • The general aim for this project was to promote sustainable production, which was interpreted to be integrating production, resource and biodiversity values. In some cases, there may be trade-offs between income and conservation. The debate about who should carry the cost of such trade-offs (which may occur in some case studies) was considered important but outside the scope of the research. We did, however, try to develop case studies that minimised the private costs of conservation work.
  • Financial results are based on estimates of typical production scenarios. Farm businesses are highly diverse so not all situations can be covered.
  • The results of ecological studies are usually strengthened by having longer study periods and more sites. Findings and conclusions from this study should be treated as initial outcomes and that should be subject to further research.

The case studies are indicative only, given the variations in farm business structures. Individual producers should make their own estimations before making management decisions.

Case Study 1 - Fencing for Habitat and Water Quality

For this case study there are two scenarios.

First, for the two larger properties, 200 ha of remnant are fenced off with one kilometre of new fencing and a water trough and one kilometre of piping. For the 2600 ha property 100 ha is fenced with 0.5 km of fencing and 500 m of piping. Second, the riparian areas are assumed to be an equal mix of open pasture and open woodland and are fenced at 200 m width with the waterway at the centre. The lengths of the waterways are four, eight and 12 kms. Grazing pressure in both cases (riparian and remnant) is reduced by 40 percent after fencing. Table 1 shows the opportunity cost, in annual income decrease and that decrease as a percentage of the original farm income.

In the case of the 2600 ha property the annual loss increases by $413/yr. Fencing remnant woodland is generally a low cost although the proportional effect on small profit or loss margins is proportionately high, as in the 2600 ha property case. As expected, the cost of fencing off the riparian areas is much higher, with the length of fencing required to isolate a relatively small, but long and narrow, area. Even with a proportionately smaller area of waterway frontage, such expenditure adds considerably to the operating loss of the smallest property.

Table 1: Costs of Protection Projects
Case study property Base annual income* Remnant Woodland Annual Opportunity Cost Riparian Zone Annual Opportunity Cost
$/yr % of base income/yr $/yr % of base income/yr
2600 ha -$4,924 $413 8.38 $2,380 -48.32
6100 ha $60,581 $626 1.03 $3,819 6.30
10,000 ha $106,783 $590 0.55 $5,226 4.89

 

 

Case Study 2 - Accelerated Rotational Grazing

There are two scenarios for this case study.

First, additional paddocks are created on each property with the aim of increasing stock rotation rate to then increase carrying capacity and ground cover. Total additional fence lengths are 10, 20 and 50 kms, respectively, with new watering systems required for four, eight and 12 new paddocks. The second scenario involves undertaking all of the riparian and woodland project work outlined above, but including this as part of the grazing management system so that fencing and watering costs for the resource protection projects are shared with the grazing projects. For example, the woodland fence becomes one side of a new paddock, while other new paddocks are assumed to radiate off the riparian fences.

The results of these analyses are reported as threshold stocking rates. That is, the stocking rate in the model was increased until the net property income matched that of the base case and the reported result was the percentage increase in stock numbers required to ‘break-even’ financially. In other words, this was the point where the increased carrying capacity covered the cost of the fencing and watering equipment. In addition, in the second case, it covered some loss of grazing in the riparian and woodland areas over a 10 year period. Table 2 shows the estimated results.

It should be noted that in the second scenario with a decrease in grazing pressure in riparian and woodland areas there would be an additional increase in effective stock numbers on all other parts of the property. That is, incorporating the resource protection projects on to a grazing management project will further increase grazing pressures in other parts of the landscape if the aim is to accept no losses. A potentially important variable that has not been included at this stage is a possible additional labour component for mustering and shifting stock. This might be minimised with a property plan that allows for adjacent paddock shifts, however, there would still be some increase in labour. This may be offset by reducing labour for worm control but the evidence for either case is not yet available so additional labour was excluded for the time being. The costs will increase considerably if heavy duty piping is used and/or more dams are constructed. In this example the target stocking rate would be more like a 30-40 percent increase.

Table 2: Stocking Rate Increases to Offset Project Costs

Property

Base DSE

Target Stock Rate Increases

Grazing Only (%)
Grazing & recourse protection (%)*
2600 ha 5800 6.67 7.62
6100 ha 11,335 8.52 8.70
10,000 ha 22,340 10.49 12.44

 

 

Case Study 3 - Optimising the Regrowth Control Cycle

This case study is based on the biodiversity benefits of regrowth on the basis that landholders will generally wish to control regrowth relatively early for reasons of landscape appearance, fear of legislative controls on mature vegetation and to prevent perceived economic losses.

This case study focuses on the latter concern and tries to identify an economically optimum control cycle. For this more complex modelling, the focus is on a hectare of land rather than the whole property, although the net wool returns ($20/hd) excluding fixed and capital costs are derived from the spreadsheet.

  Wool Income by Regrowth Treatment

Wool Income by Regrowth Treatment

It is assumed that the area under consideration starts as open pasture and then 600 stems/ha regenerate and grow at an average of 0.5 cm/yr in diameter, a moderate growth rate in eucalypts in a medium rainfall zone. The pasture yield loss is an average of about 1.7 percent/yr but with the exponentially increasing basal area, the decline accelerates over time, as shown by the falling wool returns from the untreated case in Figure 2. The tree/grass yield trade-off figures are derived from The GRASP pasture model run by the Queensland Department of Natural Resources.

In this case study three regrowth treatment strategies are compared, including the no treatment case. At seven and 11 years, , woody regrowth is treated with a chemical. In this project, the labour value is $20/hr and the chemical costs approximately $30/ha.

The returns ($/ha) are estimated as the wool income received, based on the changes in stocking rate. Wool production per head remains the same, but the number of sheep run on each hectare decreases as tree basal increases.

 

Case Study 4 - Thinning Woodlands

The final case study comprises three scenarios and may be more appealing to landholders as it that involves thinning a relatively dense stand of old regrowth (30 years+) resulting in an increase in carrying capacity.

The first thinning scenario involves clearing 100 ha with a bulldozer, raking and burning the timber and then following up with regular regrowth control. Again, the income figures are derived from the whole-property modelling. The woodland is mixed age and thinned to 50 stems/ha. The harvesting age is 100 years, based conservatively on ironbark (E. crebra), and therefore 2.5 stems/ha are available for harvest every five years, or 0.5 stem/ha/yr. Results are expressed as annualized NPV, which is the total net present value of making the change divided by the number of years considered, in this case 30, for an average over that time.

Scenarios two and three share the same pasture yield increase but thinning alone is a marginal proposition. In addition the extra time and therefore cost involved in mechanically thinning as opposed to full clearing, would be generally unattractive to landholders without additional incentive. The returns could be further improved if, during the initial thinning stage, usable timber could be extracted, thus offsetting some of the initial undiscounted ‘project’ costs. The main point here is that a modest forestry enterprise makes creating and maintaining an open woodland much more attractive if that is the desired goal. This latter option would depend on market opportunities and knowledge of native forestry.