This paper assesses the economic benefits of green manuring and the potential costs. It also investigates the circumstances in which green manuring will be profitable and those that result in losses to growers.

Executive summary

Recently interest in the role of renovation cropping in the farming systems of the Western Australian wheatbelt has increased.  It has been proposed as a means of addressing the apparent decline in soil quality in some intensively cropped areas and the increased incidence of herbicide resistance. 

Renovation cropping involves either turning a crop into the soil at flowering or cutting the crop and leaving it on the soil surface.   This is done to maximise the amount of organic matter added to the soil and to control weeds most effectively.  In the Western Australian wheatbelt the focus has been on using pulses, although a range of crops can be used.  The pulse phase of a rotation is favoured as pulses improve the nitrogen status of the soil. In addition the returns to pulses are lower relative to cereals and canola, so the forgone profit in the year of renovation cropping is lowest.

Renovation cropping leads to changes in soil conditions that persist for at least the following season.  It reduces weed numbers in the following crop by reducing seed set, increases the availability of nutrients and may improve soil structure.  Lower weed numbers reduce the carry-over of root diseases thus providing a disease break for the following cereal crop.  Recent trials have shown likely yield increases of 20-30% above those after a pulse crop and increased grain protein levels in the following cereal.

The main cost of green manuring is the income lost by sacrificing grain production.  The loss in income plus any additional costs associated with soil renovation need to be recouped in the following season(s).  Therefore the income from the yield increase(s) in the subsequent year(s) needs to be equal to or greater than the total costs of renovation, including the income forgone.

Despite the increase in interest in renovation cropping, no comprehensive economic analysis has been undertaken to determine its role in Western Australian farming systems.  This study investigates circumstances under which renovation cropping is likely to be profitable and estimates the needed increase in farm profit, given the variability of yields that result from seasonal influences.

To investigate the consequence of risky yields historical rainfall data was used to generate yield distributions for different rainfall zones, soil types and crops.  The yield distributions were used as input to a simulation model to determine the distribution of income, resulting from renovation cropping, in a lupin:wheat:wheat rotation.  The mean yield boost resulting from renovation cropping was estimated to be 3% based on trial results (F. Hoyle, pers. comm.). 

The results of the analysis showed that there is a 30-40% chance of increasing profit if yield is increased by 30% on average.  However, the results were very sensitive to the average increase in yield.  The probability that profit will be increased was halved when yield boost was reduced to 20%. 

The yield increase required to make renovation cropping profitable can vary between 100% under the worst case and below 10% under the best case.  The variability depends on grain prices, grain yield in the renovation phase (if a commercial crop had been was harvested), and the cost of renovation and grain yields in the following crop phase.

The likelihood that profit will be increased depends largely on minimising income forgone relative to the increase in income in the following years.  Therefore green manuring will be most profitable when done in years when the grain yield of the pulse crop is low, and/or when the following cereal yield is very high. 

Weather forecasts are not yet sufficiently developed to predict potentially good years over 12 months ahead, so renovation needs to be undertaken in poor years to maximise the chances of increasing profit.

Identifying poor yielding years prior to renovation does present some difficulty although weather forecasts may improve the chances of undertaking renovation in the 'right' year.  .  Also yield potential is determined directly by biomass of the crop, so this may be used as an early indicator of yield.  Where waterlogging or disease has caused low vegetative growth, resistant weeds are widespread in a paddock, or where frost has damaged the crop green manuring is more likely to be a profitable option. 

This suggests a role for tactical use of renovation cropping so that it is undertaken in years where the forgone income is minimised (i.e. it is done in poor yielding years).  The results of the analysis show that only small yield increases in the following cereal crop are necessary to break even in these circumstances. 

The analysis highlighted gaps in the knowledge of the impact of renovation cropping that may be important for more comprehensive economic analysis, or information that may improve the grower’s ability to undertake the practice profitably.  Further research into green manuring could include:

• Determining whether the profitability of green manuring can be increased using long term weather forecasts.  Improving the estimates of the probability of achieving different yields may allow farmers to renovate soils in years that have lower risk.
• More information on the effects of green manuring on yield and protein for different crops under different conditions is required to better assess the economic advantages of green manuring
• The profitability of green manuring relative to other methods of improving sustainability of cropping also needs to be addressed.