On-site and off-site economic benefits of dryland salinity mitigation resulting from establishment of perennial vegetation on farms: a breakeven analysis

Abstract

The salinisation of agricultural land, natural habitats, water resources and non-agricultural infrastructure is a serious problem in southern Australia. A number of government programs have attempted to reduce the substantial costs of degradation. For such interventions to be justified, the level of salinity resulting from private landholder decisions must exceed the level that is optimal from the point of view of society as a whole, and the costs of government intervention must be lower than the value of benefits gained by society. This research adapts an existing hydrological/economic model representing external costs from dryland salinity affecting any biological or physical asset. The model is used to identify those variables that have the biggest impact on the net-benefits possible from government intervention. The key variables that have the biggest impact on net-benefits of dryland salinity mitigation are the value of the off-site asset and the lag time before the onset of dryland salinity in the absence of intervention. In many cases, the off-site hydrological and economic benefits from planting perennial vegetation are small, so that the returns from perennial plants need to be almost as high as those from traditional annual crops and pastures, if they are to be worth growing.