ECONOMIC IMPLICATIONS OF CHANGING SUGARCANE MANAGEMENT PRACTICES—MACKAY WHITSUNDAY REGION

PROJECT CATALYST HAS been assisting growers to investigate the agronomic and economic potential of changing management practices. The project aims to identify management practices that improve water quality in the Great Barrier Reef (GBR) while also improving farm profitability. This paper investigates the economics of skip row planting and controlled traffic farming by two growers in the Mackay Whitsunday region. Investment analyses are conducted based on change in gross margin before and after each practice change, and the relevant capital costs. Based on current data, the skip row trial results in a gross margin equal to, or slightly lower than, the gross margin for a conventional planting scenario. With the inclusion of capital costs into the economic analysis, skip row planting does not appear to improve profitability, despite the expected improvement in water quality attributable to this practice. On the other hand, the controlled traffic farming case study indicates an improvement in cane gross margin of $112 per hectare. Although the capital costs included for transition to controlled traffic farming are high at $152 500 it is expected that investment in this new/modified equipment will be a positive investment for this grower. While change in individual farming systems is essential to continue to remain economically viable over time, this paper concludes by highlighting the limitations of using case study results to formulate regional or state level prescriptive changes to the cane industry.