Economic assessment of best management practices for banana growing

Abstract

This technical report presents the methodology and findings of the representative economic study modelling the economic and water quality implications of Banana Best Management Practices (BMP) adoption. The findings indicated that in general, BMP adoption led to reductions in dissolved inorganic nitrogen (DIN) and total suspended sediment (TSS) leaving banana farms, while at the same time improving the profitability of farming businesses.
The modelling approach used in this report involved developing representative farm scenarios to explore the economic and water quality implications of adopting stepwise management improvements, as well as exploring the impact of enterprise variability on profitability. A range of scenarios were developed to represent typical banana growing farms in the Tully and Innisfail regions, with variation in sizes, soil types and slopes. Data used in the modelling was collected from publications, industry sources, extension officers and workshops held with growers.
The modelling found that improved management practices were generally associated with higher farm gross margins per hectare (up to $1,381/ha when changing nutrient rate from D to B class), but not all management practice improvements had a positive impact on farm gross margin. Farm gross margins were higher for farms on Dermosol soils compared to Ferrosol soils (mainly due to higher irrigation costs in Ferrosols) and larger farms had higher farm gross margins than smaller farms (due to several areas where economies of scale could be realised by larger farms).
Investment analyses revealed that, in general, the transition to improved farming systems (e.g. all D class to all C class) showed a positive impact on farm profitability. However, some individual practice changes showed a negative impact on farm profitability. For example, transitioning ground cover from D to C class resulted in a negative impact on farm profitability (-$243/ha/yr). The implementation of BMPs is generally characterised as having a low risk of adverse production outcomes, however at present there is a limited number of studies to accurately define the production implications for some of these practices. To analyse possible production implications, a risk analysis was undertaken which revealed that the economic outcomes were very sensitive to changes in production.
The water quality modelling results found that reducing fertiliser rates was the single most important driver of DIN abatement on all farms (up to 32.2kg N/ha/yr reduction moving from D to B class rates was responsible for 88 per cent of total DIN reduction on Ferrosol soils) and delivered substantial economic benefits. Increasing ground cover on inter-rows and headlands was the most important practice in terms of reducing sediment loads in runoff (up to 10.8 t/ha/yr reduction moving from D to B class ground cover was responsible for 82 per cent of total TSS reduction on Ferrosol soils). Shifting ground cover from D to C class dramatically reduced soil erosion by a factor ~10, mainly due to addition of grassed inter-rows.
The pesticides modelled were glyphosate, chlorothalonil and glufosinate-ammonium for the Dermosol and Ferrosol soils. Pesticide loss behaviour was similar for the three pesticides with most pesticide lost in runoff, compared to leaching. These results imply that management of erosion and sediments would not be effective in significantly reducing pesticide runoff losses. Given that total runoff cannot be managed, the only effective way to reduce losses would be to reduce application rates or frequency of applications.