Are multi-paddock grazing systems economically justifiable?

Abstract

The financial implications of few- and multi-paddock systems were modelled by a discounted cash flow analysis with the (discounted) present value as the dependent variable, and number of paddocks, farm run-down time, time horizon and discount rate as the independent variables. Present values were higher for few- than for multi-paddocks where rundown was slow, time horizon short and discount rate high. Present values were always higher for few- than for multi-paddocks when time horizon was short. At high discounts, present values over all modelled time horizons were higher for few- than multi-paddocks. Even if the conservation ideal of zero or low discounts obtains, there is little financial incentive for multi-paddocks for farmers with short planning horizons. Remedy of this by state aid and tax concessions has been tried. Success is not obvious, perhaps because subsidy has reduced farming costs and thereby prompted faster or greater resource depletion.Language: English

Keywords: conservation; Continuous grazing; discount rate; Discount rates; farming; grazing; grazing systems; modelling; planning; present value; Present values; Range deterioration; Rotational grazing; south africa