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“Lime-It” A Flexible Acid Soils Programme For Farmers

Zvi Hochman, Dirk Godyn, Brendan Scott, Jim Hindmarsh

Department of Agriculture, NSW

“Lime-It” is a computer programme designed to help District Agronomists and farmers answer the question: “How much lime should I use on this paddock?”. This question needs to be resolved in order to arrest acidification of soils in Australia’s extensive agricultural systems. For the Australian wheat-sheep belt lime cost, at 2.5 t/ha may represent between 50% and 100% of the annual produce from that hectare. For this reason lime rate recommendations developed in countries with more intensive (and often subsidised) agriculture are not appropriate. Such recommendations include:

(i) a fixed rate of lime for a given soil type;

(ii) lime rates predicted to raise soil pH to a particular target level; and

(iii) lime rates calculated to lower exchangeable aluminium to a specific level.

Such recommendations, if implemented, will certainly ameliorate the soil, but the cost to the farmer could well be his economic survival!

To make a rational decision on an appropriate lime rate we need to consider the effects on the soil not only in the year of application but also in the longer term. We need to account for the pasture response to changes in the soil which result from lime addition and the subsequent effects on animal production. We need to calculate costs and benefits of any rate of lime in order to determine which is the most profitable rate. We also need to compare investment in lime with alternative investments on and off the farm. In addition the payback period on an investment in lime may be vital.

In “Lime-It” we have endeavoured to incorporate the best information currently available to predict the effects of liming on soils, pastures, stocking rates and farm economics. We wrote this information into a computer programme which is easy to use. To put “Lime-It” to work you simply insert a disk in the disk drive, turn on the computer and read the screen. After a brief introduction “Lime-It” will ask you questions about your paddock. The first few questions will relate to NSW Department of Agriculture soil test results. This information will be used to calculate the effects of any rate of lime on soil pH and exchangeable aluminium, not only in the year following liming but also in the following ten years.

Next, “Lime-It” displays a number of alternative pasture response curves to soil pH. Here it is up to you, the user, with guidance from your District Agronomist, to select a curve. Results from test strips, local experience, regional on-farm demonstrations and research can be used as a guide. “Lime-It” then considers the effect of any liming rate on the carrying capacity of the paddock over a ten year period. To do this it will ask you what your current stocking rate is, in dry sheep equivalents (DSE).

Having calculated the biological effects of lime, “Lime-It” moves on to economics. This is best illustrated by an example.

An example of “Lime-It”

The following is a unique solution calculated for a hypothetical farm, hence the outcome will vary from farm to farm.

TABLE 5.1 The effect of lime on pH and yield potential
1. pH ten years after liming
2. Average maximum yield over the ten years

LIME (t/ha)

PH YEAR 1

FINAL pH

AVERAGE % MAX. YIELD

0

4.2

4.1

59

0.5

4.5

4.1

66

1.0

4.7

4.2

73

1.5

4.9

4.3

82

2.0

5.0

4.5

88

2.5

5.2

4.6

92

3.0

5.3

4.7

95

3.5

5.5

4.8

97

4.0

5.6

4.9

98

4.5

5.7

5.0

99

Table 5.1 shows that from a production viewpoint maximum production is reached at a lime rate of 4.5 t/ha. The cost of that much lime would, however, be prohibitive. Farmers will have to consider their lime rate in economic terms. To do this, “Lime-It” requires information on present stocking rates, gross margin/DSE, the cost of incorporated lime in the soil and the cost of any additional livestock. The gross margin/DSE was assumed to be $12, the cost of additional livestock $20/DSE. Table 5.2 gives the total gross margin of ten years of pastures. The stocking rate used in this example for unlimed pasture was 7.5 DSE/ha. Given the information supplied so far, “Lime-It” calculated the net gross margin, including any residual value of lime at the end of the ten year planning period. Costs included expenditures on lime and those of additional money tied up in extra livestock.

TABLE 5.2 The effect of lime on the net gross margin (NGM) and the internal rate of return to investment

Lime t/ha


(1)

Total
Gross
Margin
($/ha)
(2)

Residual
Value of
Lime
($/ha)
(3)

Total
Cost
Lime
($/ha)
(4)

Opportunity
Cost
Livestock
($/ha)
(5)

Net Gross
Margin
($/ha)
(6)

Additional
Net
Gross Margin
($/ha)
(7)

Internal
Rate of
Return
($/ha)
(8)

0.0

1059

0

0

81

978

 

0

0.5

1194

7

52

90

1059

81

25

1.0

1324

13

94

100

1142

83

24

1.5

1472

29

137

112

1252

110

26

2.0

1580

45

179

120

1325

73

25

2.5

1657

61

222

126

1370

45

23

3.0

1709

77

264

130

1392

22

22

3.5

1742

93

306

133

1396

4

20

4.0

1758

109

349

134

1384

-8

18

4.5

1760

125

391

135

1359

-25

17

Table 5.2 shows maximum gross margins at a lime rate of 3.5 t/ha. Gross margin generated by additional amounts of lime is progressively reduced (see column 7). It is unlikely that farmers will invest 3.5 t/ha of lime because lime must compete for funds with alternative investment opportunities. Because the additional or marginal net gross margin falls rapidly beyond a rate of 2 t lime/ha, farmers may feel inclined to apply up to 2 or 2.5 t/ha.

It is also important to know how returns from lime compare with alternatives on or off the farm. The internal rate of return (column 8) gives the average return to investment in lime.

Returns to investment are important. However, many farmers will need to know if they can afford lime from a cash flow viewpoint. “Lime-It” requires the following information to answer this question: area limed, application rate, interest paid and earned, and specific details on other off- and on-farm costs and income. Table 5.3 gives details.

TABLE 5.3 Information required for cash flow

Hectares to be limed

100 ha

Lime applied
Interest rate payable on loan
Interest rate earned on investment
Marginal tax bracket
Stocking rate without lime
Expected rate of inflation
Annual price change for livestock
Current net farm income
Current net off farm income
Annual overheads
Annual household expenditure

2 t/ha
15%
12%
30%
7.5 DSE/ha
10%
7%
0 $/year
0 $/year
0 $/year
0 $/year

Table 5.4 shows that in this example it takes five years to recoup the costs of liming. The profit or loss, including the residual value of lime and the value of additional livestock is given for the end of the planning period in constant and nominal dollars.

TABLE 5.4 Lime-It cash flow (pH 4.2, TEC 4.43, soil aluminium 1.04)

10 YEAR CASH FLOW

 

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

YEAR 7

YEAR 8

YEAR 9

YEAR 10

INCOME

                   

Added income due to lime

0

3926

4277

4655

5064

5504

5977

6486

7032

7618

Other Income
-net farm
-net off farm


0
0


0
0


0
0


0
0


0
0


0
0


0
0


0
0


0
0


0
0

Total Income

0

3926

4277

4655

5064

5504

5977

6486

7032

7618

COSTS

                   

Lime
Extra livestock
Household
Other overheads
Interest

7700

0
0


8342
0
0
809



0
0
1357



0
0
1051



0
0
672



0
0
211



0
0
-276



0
0
-801



0
0
-1413



0
0
-2123

Total Costs

7700

9151

1357

1051

672

211

-276

-801

-1413

-2123

CASH FLOW

-7700

-5225

2919

3605

4392

5293

6253

7287

8445

9740

Debt or surplus
Residual value of lime
Value of added livestock

-7700

-12925

-10006

-6401

-2010

3283

9536

16823

25269

35009
13188
13396

Profit or loss
Profit or loss in constant dollars

                 

61593
26121

Conclusion

The present “Lime-It” programme is not infallible but reflects the best information currently available enabling users to obtain advice that is paddock specific. The programme also provides a framework to which new research findings can be added, ensuring that the programme continues to provide solutions which reflect our present understanding of the acid soils problem.

lit is important to reiterate that the figures presented are only an example. They were calculated from answers to 18 questions. If any one of these questions is answered differently, the outcome will be affected. “Lime-It” does not give general recommendations - it provides “tailor made” solutions to aid your decision. Because it only takes a few minutes to run “Lime-It” from start to finish it can be used to investigate “what if” questions you may have.

Further reading

1. Hochman, Z., Godyn, D.L. and Scott, BK!. (1986). “The Integration of Data on Lime Use by Modelling”, Chapter 8. In Robson, A.D., Yeates, J.S. and Porter, W.M. (Eds). Soil Acidity and Plant Growth (in press). Academic Press.

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