Acid and acidifying soils occur extensively in Australia. Currently, some 90 million hectares of agricultural land in Australia is considered to be acidic and around 35 million hectares are considered to be highly acidic which is both a serious agricultural and environmental problem. The nature, impact, and causes of soil acidification vary across Australia, as do farming systems and the institutional and socioeconomic issues relating to land management. In high-rainfall areas of south-eastern Australia, managing acid soils is particularly difficult in permanent pasture systems. In this paper, an economic analysis is made of the results of a long-term trial (MASTER – Managing Acid Soils Through Efficient Rotations) aimed at developing a sustainable agricultural system which can stop soil acidification and ameliorate subsurface acidity in the 500-800 mm rainfall zone . Data from four basic treatments (with and without lime) such as annual pastures, annual pastures / crop rotation, perennial pastures and perennial pastures / crop rotation were analysed. We used average crop yields and wool cuts during 1992 to 1997 and calculated gross margins for the options. Using discounted cash flows, the economic benefits of the different treatments were examined. The implications for farmers in those regions are identified and explored.


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