Victorian Resources Online - Goulburn Broken

Investing in New Enterprise Options

New Enterprise Options for Landholders within the Dryland Component of the Goulburn Broken Catchment

Introduction

With the region's strong economic profile and favourable physical characteristics, there are a range of new and emerging industries that may be invested in. These include: thoroughbred horse breeding, winegrape production, mushroom farming, aquaculture olives, vegetables, softwood and hardwood plantations, as well as value adding industries such as processing and manufacturing plants. Natural resource based tourism is also seen as a growth industry.

Source: Economic Profile of the Goulburn Broken Catchment (including all of the Shepparton Irrigation Region) 2000 (external link).

There are literally a hundred or more new enterprises that provide opportunities for new landholders, or those looking to diversify production on some of their existing farm. However, there are a few requirements that these enterprises have to meet if they are to be applicable to more than just a handful of farmers.

Firstly, there must be a clear market demand for the resulting products, with known specifications, and little or no impediment to landholders entering the industry.

Secondly, there must be a large enough area of suitable land so that the new enterprise is relevant to a reasonable number of farmers.

Thirdly, the profitability of the new enterprises must be at least the same as that of the major competing land use (grazing) for them to be attractive for landholders as alternative options for their consideration.

DPI/DSE staff have examined a broad list of possible new enterprises and have prepared marketing and economic analyses as well as climate and land suitability maps for the following enterprises that meet the above three requirements:

goat meat
broombush (used for brush fencing)
cut wildflowers
vegetables
wine grapes
firewood
pulpwood

A paper is available on each enterprise showing the market outlook for the product, Net Present Values and Internal Rate of Return (measures of profitability), peak debt, year of peak debt, year to break even and cumulative cash flow. An icon on each map will direct you to the relevant analysis.

Maps of the dryland component of the Goulburn Broken catchment have been prepared that show areas of high, moderate and low biophysical suitability, based on climatic, landscape and soil features. The underlying data used is accurate at the 1:100,000 scale.

Important Notes:

1. Crops/animals grown in areas of moderate or low suitability are unlikely to be as productive as those grown in areas of high suitability as the biophysical attributes are not as conducive to high performance. Alternatively where biophysical factors can be modified by management (e.g. frost, drainage, pH), in areas of moderate and low suitability costs of production are likely to be higher to achieve the same level of production.

2. The maps indicate generally where areas of high suitability are likely to be found. More specific testing of a site (particularly of soil characteristics) should be undertaken before any final decisions are made.

For those wishing to read further, the section below describes how the maps have been produced.

Biophysical Suitability Analysis Using The Most Limiting Factor Method.

The Most Limiting Factor Method (MLF) as used in this study, identifies biophysical factors that are critical for production or the protection of the environment. The biophysical factors are assessed in relation to the level at which they become limiting to plant growth or protection of the environment. The approach ultimately assigns a suitability rating based upon the most limiting factor.

The combination of landscape attributes (soil, vegetation, slope, drainage, etc.) that occur in the landscape unit is considered, and different units are given the same suitability rating if they have similar landscape attribute levels. The values derived for units are based upon expert knowledge of the key factors (attributes) and the level at which they become critical. All factors are considered to have equal weight with respect to their impact upon growth or the environment. The simplicity of the approach allows the technique to be applied via a GIS platform or manually.

Components, Factors and Critical Values.

The biophysical suitability for horticultural production has been determined based upon three ecosystem components:

1.	Climate	Is the crop in question suited to the rainfall, temperature and frost susceptibility within the land?
2.	Landscape	Will growing the crop result in unacceptable water erosion on the land? Will the natural landscape features of the land result in drainage problems, or impede machinery operations?
3.	Soil	Are the inherent soil conditions suitable for growing the crop/pasture?

The climate, land and soil components each have various elements or factors. For each factor, critical values are identified and used to rate the suitability for different types of horticulture. The factors are rated for their limitation to plant growth, or potential for environmental degradation, according to a three class rating system (see Table 1). The most limiting factor determines the class. A table showing the factors and critical values for each map can be viewed by clicking on an icon.

Table 1: Class definitions used for the Most Limiting Factor biophysical suitability methodology.

Class	Description	Definition
1	High	High probability of the climate, land and soil being suitable for commercial horticulture production with respect to plant production and protection of the natural resource base.
2	Moderate	Moderate probability of the climate, land and soil being suitable for commercial horticulture production with respect to plant production and protection of the natural resource base.
3	Low	Low probability of the climate, land and soil being suitable for commercial horticulture production with respect to plant production and protection of the natural resource base.

The rationale for assigning critical values to each of the factors is based on:

(a) plant production
(b) protection of the natural resource base,

with the aim of identifying economically and environmentally sustainable land use and management options.

Page Top