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Summary of full report
by Richard Stayner
March 2007
RIRDC Publication No 07/042 RIRDC Project No UNE-94A
Executive Summary
Background
The RIRDC study (MUA-1A)
found that, for a hypothetical grazing property in the rangelands of NSW,
harvesting kangaroos for human consumption could cover both the capital
and variable costs of the enterprise. It also drew attention to the potential
economic and environmental benefits of a reduced stocking rate of domestic
stock, if accompanied by measures to control total grazing pressure.
A RIRDC workshop in May 2004 on the Sustainable Wildlife Enterprises Program concluded there was a need for more economic analysis and business case development for the industry proposals that emerged from that workshop. This project was proposed to progress that work.
Objectives
The objectives of this project
were to:
Methodology
The project consisted of
two main tasks:
Results
The ewe breeding enterprise
model usefully illustrated the drastic financial effects of rainfall deficiency
(drought) in two years out of ten, by demonstrating that accumulated surpluses
would be consumed by the costs of supplementary feeding and by the inability
to join ewes in those years.
The model of the kangaroo harvesting enterprise was developed for a group of neighbouring properties. This allowed significant economies of size to be achieved. On the Base Case assumptions, the returns from the kangaroo enterprise are sufficient to just cover the fixed costs within the operational life of the capital equipment. The assumptions used in the Base Case were mostly more conservative than those presented in the earlier research, except for the price per kilogram received for kangaroo meat at the chiller. Sensitivity testing was carried out on several of the key physical and financial variables.
Implications
Based on the results, using
simplified assumptions and hypothetical data, the models show good potential
for further development. The results of the sheep model are consistent
with widespread experience of the actual effects of droughts on sheep enterprises
in the rangelands. It therefore provides a promising tool for illustrating
the potential effects of drought. Suggestions for several further useful
refinements to the data and assumptions of both models are made. The models
now need to be developed further using data and decision rules based on
the participating properties from the trial sites.
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