Formosa, Cressy - When timber and non-timber values are accounted for, carefully integrating trees into agricultural landscapes can be a profitable and attractive option with strongly competitive internal rates of return.Download PDF
|Location||Cressy, Northern Tasmania|
|Property size||773.8 ha|
|Enterprise||Dryland and irrigated mixed farming|
|Soil type||Brown chromosol|
|Forested area||1 ha|
Agroforestry is the incorporation of woody perennial vegetation into agricultural systems. Agroforestry often involves planting commercial forestry species for harvest, but also includes planting stream-side buffers, shelter belts of native species or even species that produce high-value products for harvest, such as energy, fruits, nuts, oils and honey. The benefits of agroforestry to the farming enterprise include diversification, increasing overall productivity and improving the sustainability and resilience of farm systems. Trees integrated into agricultural systems have many benefits to other parts of the farming enterprise that are rarely accounted for in farm balance sheets so we: Quantified and integrated the direct and indirect benefits of trees to the farming system. Sought to understand the most profitable configurations of trees on farms. Explored farmer motivations and barriers to adoption of trees on farms. Demonstrated a strong economic argument to include trees in agricultural landscapes.
Agroforestry is often perceived to be unprofitable or associated with high opportunity costs forming a significant barrier to adoption. However, there is a paucity of financial analyses examining the profitability of agroforestry systems in Australia. Published case studies in a range of farming systems across southern Australia (livestock, cropping, dairy) indicate that agroforestry is a profitable option.
Explicit recognition of co-benefits is important for understanding the full value of agroforestry. Shade and shelter for stock, for reducing mortality and stress in hot and cold weather.
Gross returns over 25 years were calculated to be $56,560 as follows:
After accounting for the establishment costs of around $6,000/ha, the internal rate of return was 19%.
Plantation assumptions: wood price of $40/m3, fencing costs of $7/metre, establishment costs of $1.80 per seedling, plus site prep and weed control costs of $375/ha.
Pasture assumptions: A self-replacing flock of sheet producing wool and meat, stocked at 18 DSE, with feed costs of $300/tonne, wool prices of $16-$18/kg and sheep sale values of $85-$119/head.
Shelter assumptions: shelter benefits on pasture production were 60% of those measured at Formosa and reduction in livestock mortality of 50%.
This research was supported by the Agrivision 2050 initiative of the Tasmanian Government through Private Forests Tasmania, and the Department of Agriculture and Water, through the Research and Development for Profit Initiative, Round 2. Also supported by Forest and Wood Products Australia, Dairy Australia, Agrifutures Australia, the University of Tasmania, Greening Australia and Forico.