Measuring the profitability and environmental implications when growers transition to best management practices : final report 2014/015

Abstract

The development of sugarcane Best Management Practices (BMPs) aims to improve the productivity, profitability and sustainability of sugarcane farms. However, there has been limited research that has examined both the economic and environmental implications of BMP adoption on commercial farms in Australia. To alleviate this problem, this project has undertaken a literature review and six case studies on commercial farms in the Wet Tropics analysing the farm profitability and life cycle environmental implications of BMP adoption. After completion, case studies were distributed and extension materials were presented to industry.

Economic, biophysical and farm operational data were collected from the commercial farms to undertake Farm Economic Analysis Tool (FEAT) and Cane Life Cycle Assessment (CaneLCA) tool analyses. Revenues, costs and the environmental impacts of the farming system both before and after BMP adoption were calculated using these tools in order to determine the economic and environmental impacts of the management changes. Results from investment and environmental analyses indicate that BMP implementation in the Wet Tropics can be a win-win for both economic and environmental outcomes. The economic benefit from BMP adoption was found to range between $25 and $220 per hectare per year. The CaneLCA analysis indicated reductions in energy use, greenhouse gas emissions and potential water quality impacts from nutrients and pesticides over the life cycle of sugarcane production.

The adoption of management practices that have been scientifically validated, such as BMPs, mean that adverse impacts on production are unlikely. When adopting any management practice change, however, there is always a risk that production outcomes may not be as expected. Sensitivity analyses identified that the economic and environmental outcomes were sensitive to increases or reductions in cane yield. Such risks can affect the practice adoption decisions of growers and, in the case studies, the approaches taken by growers to mitigate risks differed depending on the individual circumstances of each of the farming businesses. Ongoing communication of the project’s findings may encourage growers to consider further BMP adoption, and the methods employed in this project could be applied to develop case studies in other regions.