An economic evaluation of the use of herbicides in hill country pasture renovation in New Zealand : a thesis submitted in partial fulfilment of the requirements for the degree of Master of Agricultural Science

Abstract

Non-arable New Zealand hill country pasture is characterised by a high proportion of low fertility grasses and weeds. This places limitations on their productive capacity. Aerial oversowing and topdressing has improved the carrying capacity of this pasture without significantly altering pasture composition. This is due largely to the competitiveness of browntop (Agrostis Tenuous) against introduced "improved" grasses and clovers. The use of herbicides to effect a total vegetation kill prior to oversowing and topdressing is investigated.

The case study farm, located in Wairoa hill country, provided the application of this technique. An attempt was made to determine the optimum stocking rate on the case study farm to aid extrapolation to other areas. Average and top farm models were established to represent the response of these groups to herbicide pasture renovation in the Gisborne/Wairoa hill country region. Economic evaluation of the case study farm revealed its herbicide development programme was profitable. A comparison of the relative profitability of herbicide pasture renovation and conventional oversowing and topdressing was conducted for average and top representative farms.

Conventional oversowing and topdressing was shown to be profitable, in the current market circumstances (as at January 1987), for average farms achieving a 5.0 stock unit gain per hectare at real discount rates of up to 8.53. The corresponding gain achieved from the herbicide pasture renovation techniques of 6.0 stock units per hectare was profitable for average farms at real discount rates of up to 9.03. Top farms consistently achieved returns which compare favourably with present real interest rates (103) for both techniques. At real discount rates of less than 11.03 the herbicide pasture renovation technique is more profitable than conventional oversowing and topdressing.

Likely movements in the exchange rate should see product price increases of at least 153. This would permit profitable herbicide pasture renovation for average farms with gains as low as 3.5 stock units per hectare at a real discount rate of 5.03. Factors which have a significant influence on the investment returns are the speed of development, interest rates, herbicide prices, stocking rate and standard of management. Top farms show a significant margin of profitability over average farms with both pasture renovation techniques.

These results were extrapolated to soil groups with similar farming environments, potential carrying capacities, maintenance fertiliser inputs and management systems. A total area of 1.97 million hectares of New Zealand hill country was considered likely to effect a similar response to herbicide pasture renovation. Provided conventional oversowing and topdressing is economic in these areas then herbicide pasture renovation should be the more profitable technique.