Are high lupin seeding rates more risky in the Western Australian wheatbelt?

Abstract

A seeding rate aimed at establishing 45 plants/m² has been the long-standing recommendation for lupin crops in Western Australia. However, contrary to recommendations, many farmers in low rainfall areas of the state use a seeding rate that results in densities as low as 25–30 plants/m², claiming that these rates give more reliable yields. Current recommendations for optimal lupin seeding rates are based solely on maximisation of expected profit and risk preferences have not been considered. The present study tested the hypothesis that optimal lupin seeding rates are lower if the farmer is averse to risk. A risk analysis of lupin yields in response to seeding rates was conducted to determine whether optimal seeding rates are lower for farmers who are risk averse. The analysis was based on results from field trials from various locations in Western Australia in various years. Lupin yields were not less reliable at high seeding rates and therefore risk aversion does not materially reduce the optimal seeding rate. Farmers who used a seeding rate lower than the recommended rate forewent profit without lowering risk. In the low and medium rainfall areas, the average reduction in expected gross margin from using a suboptimum seeding rate (25–30 plants/m²) is AU$4–10/ha. Farmers in the high rainfall zone who aim for 25–30 plants/m² could forego in excess of $30/ha, particularly in situations where high yields are possible.