An economic evaluation of the impact of improved phosphorus use efficiency and increased pasture production in the beef and sheepmeat industries in southern grazing zone of Australia.

Summary

Rationale The application of phosphorus (P) to pastures has remained a key fertiliser practice for southern livestock enterprises for many years. The relative cost of elemental P compared to other farm input costs rose significantly several years ago, but has since fallen back to some extent in the last year or two. Price levels and instability in supply and price may possibly increase in future due to lower grade base materials with higher extraction costs. Inefficient use of P in existing fertiliser P applications is a feature of Australian farming systems due to leaching (losses to groundwater and surface waters) and fixation within the soil. 
Being able to increase the utilisation of P already in the soil as well as that applied in fertiliser would reduce the cost of production of Australian beef and sheepmeat by reducing P fertiliser requirements as well as reducing P export off farm. Objective The investment in phosphorus R&D by Meat and Livestock Australia (MLA), Australian Wool Innovation (AWI) and others will be targeted at improving phosphorus use efficiency in southern grazing systems. The Investment A total investment is assumed of $22.2 million over 5 years (2010/11 dollar terms) and including cash and in-kind from contributing agencies, with approximately $10 million cash or 45% from MLA. The investment is assumed to be made across four themes. 
The four themes are: 
1. Increasing adoption of existing and acceptable phosphorus management practices. 
 2. Increasing the phosphorus efficiency of existing grazing plants as well as identifying new pasture plants and developing their phosphorus efficiency. 
3. Developing new fertiliser types, management systems, and application and timing processes that increase phosphorus availability to plants and increase phosphorus uptake. 
4. Presentation of facts about the phosphorus policy environment including peak phosphorus predictions, the phosphorus life cycle, the regulatory environment regarding the impact of phosphorus, and the market environment including claims for the efficacy of other products. 
The Analysis The economic analysis of the investment has been constructed in an expected value framework using probabilities of success due to the large number of uncertainties regarding outputs and outcomes and hence benefits. Some of the expected outputs (e.g. understanding and knowledge) and outcomes including farm level adoption of eventual products can only be valued in economic terms by making assumptions about the pathway, timing and costs that lead to such adoption. While such analyses are fraught with uncertainty, the assumptions on which the analyses are based have been clearly defined so that debate can focus on the assumptions rather than the results, results being only the logical extensions of the assumptions made.