Lower peaks and shallower troughs: financial implications from soil health principle adoption

Five principles for managing soil have been proposed to improve soil health: keeping the soil covered; plant species diversity; minimising soil disturbance; growing plants as long as possible; and livestock incorporation. Termed the five soil health principles, these principles aim to improve farming sustainability by minimising nutrient loss and facilitating nutrient cycling and farming system resilience. This study aimed to examine how implementing these principles would influence a farmer’s profitability. 

By keeping the soil covered, and minimising soil disturbance, farmers can improve water infiltration and aggregate stability, improving water use efficiency. But it also can increase frost risk, necessitate different and more expensive herbicide usage, and increase disease problems. Given the key influence of water availability in dryland agricultural areas, I would expect this to improve profit.

Increased diversity has long been known to improve yields through rotational benefits. There have also been many yield benefits (but logistical difficulties) associated with growing multiple crops at one time, such as vetch and canola. Some farmers have experienced yield improvements of as much as 30% as a result. Provided weeds are managed appropriately, this seems a possible way to increase farm profits.

Growing plants as long as possible is difficult to consistently make work when operating in a moisture constrained environment. Livestock incorporation can make profit out of growing plants not used for harvesting. 

From economic analysis investigations, growers implementing these principles generally have lower costs and make lower gross profit, usually resulting in slightly lower net profit, but in a lower-risk enterprise. During poorer years profits can be similar or better where farmers adopt more of the soil health principles. By contrast, in the better years, conventional farmers have better profits.

If profit is your primary motive, farming conventionally may be higher risk, but a more profitable method, especially in good seasons. However, farming enterprises adopting the soil health principles appear lower risk, more resilient enterprises, with relatively better performance in the poorer years. Individual attitudes with regards to seasonal optimism, logistical management, risk management, and environmental altruism will also contribute to whether farmers adopt these principles or not.