28An Assessment of the Economic, Environmental and Social Impacts of the Ricecheck Program

Executive Summary

Ricecheck is an extension program developed in the 1980s by the NSW Department of Primary Industries (NSW DPI) to improve productivity through improved crop management in the rice industry. The Ricecheck program is based on monitoring crops and setting key benchmarks (or 'checks') based on the highest yielding rice crops. After analysing many factors involved in achieving high rice yields, a set of eight 'Key checks' was developed to provide a basis for growers to achieve higher yields. The Ricecheck program involves farmers following Best Management Practices, monitoring their rice crops and keeping detailed records to determine the key checks achieved. The program comprises grower discussion group meetings, field days, pre-season meetings for farmers and broad Ricecheck recommendations to provide information on the best management practices and their impact on crop yields and farm profitability.

The more key management checks each crop achieves the higher the expected yield. The checks are such that they are often difficult to achieve, even when the grower manages the crop to try to achieve the checks, as some factors are outside the control of the farmer. Ricecheck has been adopted across the rice industry, although formal involvement with full record-keeping has only reached a peak of around 20% of rice crops in any one year. It also helped to improve the knowledge and skills of many farmers who have left the program after joining it for a few years. Some other growers are aware of Ricecheck given its significance in rice production and widespread application and access to the Ricecheck Recommendation booklet distributed to each farmer every year. As a result, many growers utilise its approach without being formally involved in the Ricecheck program. Thus, farmers receive benefits ranging from 20% to 100% of those from full adoption, depending upon their level of participation.

Farmers adopting Ricecheck spend a significant amount of time (and some resources) implementing Ricecheck. They spend time in attending discussion group meetings, monitoring crops and in record-keeping, as well as providing additional inputs to meet some key checks. The time involved in adoption is included in the analysis, and is estimated to have a total annual cost of $294,000 per year, on average.

An economic analysis was undertaken within a benefit cost framework to measure the return on the investments in the Ricecheck program. The basis for evaluating the benefits of Ricecheck was to determine the difference in the yield levels that were associated with the observed level of key checks achieved through the Ricecheck program with the equivalent levels of management that would have been achieved in the absence of Ricecheck. Estimates were made of the industry knowledge that would have been available and the extent to which it would have been used by rice growers had Ricecheck not existed. That level of achievement would have increased over time as management information and technologies were improved even without Ricecheck, and because rice research and extension programs would have continued even if there had been no Ricecheck program,. Thus, achieving a given number of checks with Ricecheck provided lower benefits at the end of the period than it did at the start of the period.

The present value of the investment in Ricecheck over the period from 1986 to 2002 is $3.8 million (in real 2002 dollars). Over two-thirds of this has been an in-kind contribution from NSW DPI staff, with 29% cash investment by Rural Industries Research Development Corporation (RIRDC). The estimated present value of the benefits flowing from that investment, after allowing for adoption costs for key checks, is $67.8 million. Thus, the estimated Net Present Value of Ricecheck over the period 1986 to 2002 is $64.0 million, and the benefit-cost ratio is estimated as 18.0. Thus, every dollar invested in the Ricecheck program, averaged in real 2002 dollars per year from 1986 to 2002, is estimated to have provided a return of $18.00.

There is no obvious way to attribute the benefits separately between NSW DPI and RIRDC, so it is assumed that they share the benefits in the same proportion that they share investment costs. Thus, both achieve the same benefit-cost ratio of 18.0 on their respective investments.

Many of the on-farm economic benefits identified have social and environmental implications. To the extent that these impacts are associated with the improved economic welfare of the farm, they are incorporated into the economic benefits measured. However, this study has also identified some of the on and off-farm social and environmental benefits from the Ricecheck program that have not been incorporated into the economic evaluation. Increases in income from rice and on-farm investments are likely to have flow on effects on the regional economy, help develop social capital and enhance the cohesiveness of local community activities. In addition, the participatory approach employed in Ricecheck has also improved human capital by helping farmers to develop their managerial, marketing and decision-making skills.

There are also some environmental outcomes of Ricecheck, as the improved management incorporated into Ricecheck is likely to result in improvements in parameters such as deep drainage/seepage, surface runoff, downstream pollution, and greenhouse gas emissions. In this study, no value has been attributed to these benefits.

The benefits of Ricecheck have flowed to both industry and the community. Industry captures a larger share of the quantified economic benefits of the program than does the community, while the community has captured the majority of the unmeasured environmental and social benefits.