Bioeconomic Modelling to Assess the Impacts of Using Native Shrubs on the Marginal Portions of the Sheep and Beef Hill Country Farms in New Zealand

Round 1

Reviewer 1 Report

This paper is focused on analysing the production and farm economic trade-offs with the establishment of browsable native shrubs on the steeper parts of a typical sheep and cattle hill farm in NZ. The paper is generally well written and presents an interesting analysis, however, there are a number of discrepancies or issues that should be addressed or clarified prior.

• Given the long-term nature of the shrub investment, it would be more rigorous to lead (in the abstract and elsewhere) with reporting NPV or NPV as an annuity (if wanting to make it more farmer/reader friendly) than mean annual total sheep enterprise cash operating surplus (also mention in the abstract that it is discounted COS).
• L36-37: start sentence with ‘In 2020..’ put sheep behind 26m and delete respectively.
• L73: not clear what is meant by ‘farm sustainable use’, just ‘farm sustainability’ perhaps?
• L94: reference error
• L104-105: improve language/expression
• Fig 1 is not cross-referenced into text
• L158-159: Labour cost interaction – if end up reducing flock size (which tends to have higher labour requirements), wouldn't affect whole farm economics? – need to make the labour assumptions explicit in the method in relation to keeping cattle constant (also noting that only sheep enterprise income is being reported – not whole farm performance – which would include fixed costs of running sheep).
• L156 onwards: Section 0??
• Eqn 1: is ‘Int’ meant to be ‘int’ of something else?
• L180: reference error
• L184: why 52.1 and 38.1% as this doesn’t seem to correspond to the data shown in Table 3 – based on this data it would be very much in the low range.
• The effort in modelling shrub growth and browsing is commendable, but it isn’t clear if there are any differences in feed quality between pasture (even at different slopes) and shrubs? Or does 1kg pasture = 1kg shrub in feed quality terms?
• L320: reference error
• L339: reference error
• L363: reference error
• L385: reference error
• L388-390: explanation of replacements/lamb sales interaction should also be included around the introduction of eqn 1, as it wasn’t clear at that point in the manuscript that it was a self-replacing flock (vs being reliant on purchasing replacements).
• L449: reference error
• L458: ‘10 years’
• L485: reference error
• Figure 5: Should this chart start at year 0 on the x-axis? As year 1 would indicate first year of investment in shrubs & increased lamb sales – which is discounted (as shown by yr 2 currently)
• Fig 6: why does planting rate expenses persist beyond 5 and 10 years for the 20% & 10% planting rates? As wouldn’t planting be completed? Or are there maintenance costs? If so, they should be noted in the manuscript.
• Ref errors at L506, 507, 539, 541, 572
• The results & discussion should be changed to lead with NPV (whole period) before mean annual COS – annual equivalent (L504 onwards) – it would also be worthwhile to remind readers that it is a ‘discounted COS’ (if it isn’t, then it should be to be consistent with the preceding results).
• Section 3.3.4 – it seems pointless to indicate the reporting of IRR, but then not to report it due to its limitations – my suggestion would be to drop it all together and just stick with NPV and discounted COS.
• Table 5: a 50% and 100% planting rate scenario would have been interesting as well – but of course with the cash flow/finance limitations considered.
• It would be good to expand on the areas for future research and perhaps include things such as:
  1. The assumption of constant feed supply from pastures and shrubs (during their growth stages - not feed balance variability which is implicit) - are there differences in variability between pastures & shrubs in the steep parts of the landscape (would have thought so given differences in rooting depths etc)?
  2. Comment on using cattle to graze shrubs – perhaps acts as a drought reserve? Perhaps enables the canopy to be opened and sheep regain some grazing & expand the browsing window??
• The number of references seems excessive and effort should be made to reduce it.

Author Response

Please find the attachment.

Author Response File: Author Response.pdf

Reviewer 2 Report

This paper presents a comprehensive analysis of the impacts of some potential management option which involves planting native shrubs on the marginal portions of the sheep and beef hill country farms. Not only that the result reported in this study has high scientific soundness, the paper is also well written in terms of quality of presentation. I only have a couple minor comments.

Introduction

(Line 69-71) It is stated that “Bioeconomic modelling of establishing native shrubs on the hill country sheep and beef farms using the limited literature data available can provide insights.” Please state specifically what insights can be gained from this study.

Materials and Methods

(Line 294-295) In the assessment of farm economics effect of planting native shrubs, the authors assumed that “the beef enterprise income and costs on per hectare basis” are unaffected. However, the economic assessment includes discounted net cash flow in terms of cash operating surplus (COS), net present value (NPV), and internal rate of return (IRR). Please state how enterprise income and costs are different from the farm economic indicators examined in the economic assessment.

(Line 312-314) The authors used a break-even analysis to estimate the carbon price at which the NPV for the native shrub-inclusive model equals the no-native shrub model. What is the purpose of the break-even analysis? Any further insights can be gained from the break-even analysis?

Author Response

Please find the attachment.

Author Response File: Author Response.pdf