Economic analysis of the role of canola in southern and central NSW farming systems.
1 NSW Agriculture, RMB 944, Tamworth NSW 2340
2 NSW Agriculture, Wagga AI, PMB, Wagga Wagga NSW 2650
3 NSW Agriculture, Yanco AI, PMB, Yanco NSW 2703
central NSW. The objective of this analysis is to ascertain the
farm-level economic impact of the introduction of canola and triazine-tolerant
canola into rotations.
This paper contains an outline of the cropping system under consideration, a description of the PRISM whole-farm model, analysis of the effect of different yields and price levels on the inclusion of canola and triazine-tolerant canola in rotations and discussion of these results.
will provide useful information for farmers and advisers regarding the yield
and price levels at which canola is a viable crop in the rotation system . It
will also denote the potential farm-level
economic impacts of the use of triazine-tolerant canola in place of
non-triazine tolerant varieties.
KEYWORDS: crop rotations, economics, whole-farm modelling
Farming systems in southern NSW have been characterised
by two main patterns of land use. Firstly, legume pastures grown in rotation
with cereal crops such as wheat and secondly,
of fallow (primarily for moisture conservation but also weed and disease
control) followed by a cereal crop. In the drier areas of southern and central
NSW, a common rotation is pasture-fallow-wheat (Poole,
Since the early 1970’s there has been an intensification of cereal cropping in response to improvement in relative profitability as well as the development of ‘conservation farming’ systems. The expansion of cereal cropping occurred due to opening up of new land and at the expense of pasture and fallow periods (Poole, 1987). Canola has become a commonly grown rotation crop with cereals and pastures. It has the advantages of reducing cereal root diseases, improving soil structure (due to a different root structure to cereals), preventing build up of herbicide resistant weeds and diversifying income.
In this paper we assess the place of canola in the
rotation system in the Wagga region of southern NSW
, in terms
of the effects of price changes and relative yield to other crops on the
inclusion of canola in the rotation. In addition, we address the use of
triazine-resistant canola and it’s effect on rotation choice.
2. The PRISM model
PRISM is a whole-farm computer model developed to
analyse the farming systems of the south-eastern wheat belt of Australia. It was composed in a joint NSW Agriculture and
Agriculture Victoria project funded by the Grains Research and
(GRDC). The principle
objective of the project was to adapt the Western Australian MIDAS model for
use in the wheatbelt of southern Australia. MIDAS (Model of an Integrated Dryland
Agricultural System) is a whole-farm linear programming framework
that represents biological and economic aspects of a representative mixed farm
(Faour et al,
Marked differences between the wheatbelt of southern
Australia and that of Western Australia required substantial changes from the MIDAS parent
model, so the new model was renamed PRISM (Profitable Resource Integration
Southern MIDAS). The PRISM model is a Microsoft® Excel for Windows®
workbook of several spreadsheets which uses the LINDO®
programming solver, What’s Best!® to
solve the model using a combination of integer and linear programming (Faour
PRISM is an optimising annual steady state model which
allocates available farm resources to maximise farm profit for a representative
mixed farm (Faour
1997). There are different versions of PRISM for different regions in
south-eastern Australia, including South Australia (E ver s
Peninsula), Victoria (Bendigo, Wimmera and Mallee) and southern NSW
(Wagga Wagga and Condobolin). The version for the Wagga region is used in this
Crop yields are determined from growing season
(GSR), growing season losses,
transpiration, and various weed and disease penalties which vary according to
preceding crop history. Monthly live-weight values of livestock are inputs into
the model, which determine the animals’ energy requirements. Monthly energy
supply by pastures are also inputs into the model. Energy may either be used by
the livestock or transferred forward one month (with accompanying quantity and
Outputs from the model include operating cash surplus,
optimal area of crop and pasture, the area of each crop grown, the amount of
seed to be either purchased or retained, sheep enterprise type (selected from
first cross ewes, second cross ewes, merino ewes and merino wethers) and the
annual amount of
single superphosphate fertiliser
required. Shadow costs of rotations not selected as optimal
are also reported.
3. ANALYSING THE ROLE OF CANOLA
3.1 The representative farm
The representative farm used in this analysis is a
1,000 hectare farm operating an integrated crop and livestock system. Farm
revenue is derived from grain, wool and sheep sales as well as interest earned
on positive cash flow. Grain may either be sold or fed to livestock as a
ration. The model analyses only one soil type (red earth) and does not include
cattle. Continuous cropping without a pasture phase was not included as an
option as it isn
standard district practice (Faour et al
3.2 PRISM model settings
PRISM-Wagga was run for the representative farm with
various yield and price combinations for standard and triazine tolerant (TT)
canola. For standard canola,
canola yield was varied across a range
of outcomes, from 1.4 to 2. 6 t/ha in
0.2 tonne increments. For TT canola, a 20% yield penalty was assumed, so yields
were varied from 1.12 to 2.24 t/ha. For each yield level, a price sensitivity
analysis was conducted where the farm gate price was altered from $240 to $450
per tonne in $10 increments. For each combination of yield and price, the PRISM
model identified the rotation which maximised the operating cash surplus of the
All parameters for other crops were not altered since
relative effect of yield and price difference
canola were being tested. Price
levels for the various crops were wheat $140/t, lupins $290/t and oats $100/t.
Yield levels for other crops var y
according to the rotation (the model takes disease
and weed effects into account) but were in the order of wheat 2.8 t/ha, barley
2.0 t/ha and oats 3.1 t/ha.
Canola yield was lower where canola was cropped after
wheat compared to after pasture due to
and soil fertility penalties. The model allowed for yield benefits to wheat
crops following canola. It was assumed that no fertiliser nitrogen was added to
grain crops so there was some yield reduction from the potential in canola.
4.1 Variation in yields and prices
When canola was not included in the available set of
or was not chosen by the model, the
rotation selected was 600 ha of crop and 400 ha of pasture. The rotations selected were PPWLW
(942 ha) and PPOLW (58 ha) with 200 ha of lupins, 388 ha of wheat, 12ha of oats
and 2,600 second cross ewes. The operating cash surplus was $164 ,466 .
Low yielding (1.4 t/ha) canola was not included in the
optimal rotation until the price became relatively high ($410/t). Conversely
when canola yields were very high (2.8 t/ha) it was always selected as part of
T he average yield for
the Murrumbidgee region was 1.77 t/ha in 1996 , so
the current situation w ould
be represented by the 1.6
t/ha and 1.8 t/ha yield graph s . T t he
rotations selected were PPCaW (4 year rotation, canola 25% of farm area) and
PPPCaWLW (7 year rotation, canola 13% of farm area) where P represents
sub-clover pasture, W for wheat, L for lupins, Ca for canola and O for oats.
4.2 Herbicide resistant canola
Currently, the only herbicide resistant canola
released in Australia is triazine tolerant (TT) canola. Triazine
herbicides are residual herbicides, mostly used for the control of mustard,
radish and turnip weeds. Previously control of these weeds in canola was
difficult because canola belongs to the same botanical family (Brassicaceae)
and thus was susceptible to the same herbicides. Current TT canola varieties
are Pinnacle, Karoo, Drum, Clancy, Hylite 200TT and Surpass
1999). The triazine herbicides that may be used on these varieties are atrazine
and simazine (Mullen and Dellow, 1998).
Currently, the permit for using triazine herbicides on TT canola specifies that only a single atrazine or simazine application or a single application combining atrazine and simazine is permitted. The maximum total amount allowed to be applied to the crop in the growing season is 4 litres of either chemical or a combination of both chemicals (Mullen and Dellow, 1998).
The non-TT variety Oscar has been used as a benchmark
by the industry for comparing average yields with the TT varieties. Trials have
shown that Pinnacle returns 80-85%
the yield of Oscar
, 93% of Drum and 77% of Clancy.
Pinnacle is usually recommended over the other varieties
because Drum and Karoo have poorer blackleg resistance, and
Clancy has substantially l ess
average yield. Karoo also has relatively poorer seedling vigour
(McDonald, L, pers. comm., 1999). Pinnacle also has a marginally
better average oil percentage than the other three varieties
(Colton et al,
For the purposes of this
the standard canola variable
costs in the PRISM-Wagga model have been altered
to suit the Pinnacle variety . This include s
altering the seed cost, herbicide treatments (see Table 1) and average yield.
It was assumed that a 20% yield penalty was incurred compared to the alternative
Table 1: Differences between standard canola and TT canola in the PRISM model
The herbicide for
TT canola were less than for standard
canola, while seed costs were
slightly higher. However
there was a net reduction in costs for
value of the 20% yield penalty varied from $67.20/ha (for 1.12 t/ha @ $240/t)
to $252/ha (for 2.24 t/ha @ $450/t) which
in all cases result ed
in a lower gross margin for TT
the achievable yields of TT canola
were the same as for standard canola
there would be a net improvement in gross margin . As a
result of this TT
be included in the rotation at lower prices. For example, at 1.6 t/ha, TT
canola is included in the
rotation at a price of $3 40/t, while at the same yield standard
canola is included once
the price reaches approximately $370/t.
5. Discussion of Results
Compared to the results for standard canola, TT canola
requires higher yields and prices to be included in the
rotation. The assumed yield penalty of 20% for TT canola outweighed
lower herbicide costs.
However, currently standard canola and TT canola are not in competition for the same crop area, since TT canola is usually grown only when there is a need to control the Brassicacae family weeds and it is impractical to grow standard canola due to the weed problem. TT canola provides the option to grow canola where the farmer would not have otherwise had the option.
The implications for
canola breeding programs and the industry
these results show that if the comparably lower yields of TT
canola can be improved relative to the
varieties, TT canola would replace standard canola, due to the formers lower variable
The financial assistance of GRDC in
building the PRISM model is gratefully acknowledged.
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