The widespread removal of native trees from the agricultural zone and replacement with annual crops and pastures is a major cause of dryland salinity in Australia. It has been recognised that a large proportion of the landscape needs to be replanted to trees to prevent further salinisation. However, for much of the agricultural zone, agroforestry is not an option due to lack of species that can viably generate the products currently demanded by the market. The emerging carbon market may provide a new agroforestry option for landholders, through carbon sequestration. This analysis assesses the viability of growing trees for the purpose of selling carbon credits, from a landholder's perspective. Benefits of trees in preventing the onset of dryland salinity are accounted for. Two regions in Western Australia; a low rainfall (330 mm/year) region and a medium rainfall (550 mm/year) region, are analysed. At the expected carbon price of A$15/tCO 2 -e, growing trees for carbon is not a viable alternative for landholders in the low rainfall region, due to low sequestration rates. In the medium rainfall region, growing trees for carbon and timber is a viable alternative; however the opportunity costs of land mean the carbon price would still need to be higher than expected for growers to choose this alternative. Accounting for the salinity prevention benefits makes growing trees a more attractive investment for landholders in both regions. However in both regions, even after accounting for salinity benefits, the price of carbon would need to be A$25-A$46/tCO 2 -e higher than expected to make growing trees a worthwhile investment.

Re-introducing trees and shrubs into agricultural landscapes as agroforestry systems establishes a tension between long-term objectives, such as increasing shelter, water use, nature conservation and harvesting tree products, and the short-term objective of maximising crop and pasture profitability. This paper describes the growth of crops, pastures and trees at the tree–crop interface in agroforestry systems and the economic returns from alley farming and windbreak systems using various tree–crop competition management strategies in the Esperance region of Western Australia. Severing lateral tree roots (root-pruning), harvesting mallees and allowing them to coppice, or thinning trees for sawlog regimes increased the yield of crops and pastures in the competition zone. In some instances, these increases were significant: root-pruning increased the annual return from crops grown in the competition zone of Pinus radiata by up to $548/km of the tree line at 1 site. Conversely, root-pruning reduced tree growth by 14–43% across all sites. Therefore, where trees provide benefits, such as shelter from damaging winds, the benefits of reduced tree–crop competition may not offset the consequent reduction in rate of tree growth. For mallee–crop alley systems on agriculturally productive soils, mallee growth rates must be high enough to compensate for crop losses in the competition zone. On less agriculturally productive soils, block-planting mallees may be more profitable than alley systems or crops without competition (sole-crops). This research has shown that competition management strategies can be used to manipulate the relative productivity of trees, crops and pasture at the tree–agriculture interface. The use of these strategies will depend on the relative economic value of tree and crop products and the value placed on other tree benefits, such as shelter and reduced groundwater recharge.

Existing perennial plant-based farming systems are examined within 4 climatic zones in southern Australia (western winter rainfall, south-eastern low to medium rainfall, south-eastern high rainfall and northern summer rainfall) to assess their potential to improve the management of dryland salinity. If profit is to be the primary driver of adoption, it appears that the available options (lucerne and other perennial pastures, farm forestry, saltland pastures and forage shrubs) will fall short of existing hydrological targets with the exception of the higher rainfall zones. In the 3 eastern zones, the need to preserve fresh water flows to permanent river systems places limitations on the use of perennial plants, while the higher proportion of regional groundwater flow systems increases response times and heightens the need for regional coordination of effort. In the western zone, the prevalence of local and intermediate ground water flow systems increases effectiveness of individual action. Research into new perennial land use systems has been characterised by an emphasis on water use over profit resulting from poor dialogue between paddock, farm and catchment scales. Exploring the water use implications of land use systems that are potentially viable at farm scale is a more promising approach than focusing on the opportunity cost of catchment scale intervention. Perennial plant-based farming systems present both threats and opportunities to native biodiversity. The major threat is the introduction of new environmental weeds. The opportunities are potential improvements in vegetative cover, food sources and habitat for the native biota, but only where nature conservation goals can influence the structural complexity, composition and location of new land use systems.

The impact of two greenhouse gas abatement policies on two Mediterranean-type farming systems, grazing dominant and cropping dominant, is examined. The policies analysed are; an emissions taxation policy and an emissions restrictions policy. For both farming systems the restriction policy is found to be more effective and economically efficient than the carbon permit policy. Absolute cost of abatement is less for the livestock dominant system but relative cost is greater, because of lower total farm profits. The analysis found that at predicted emissions permit prices, trees, if credited as a carbon sink, would be adopted by both farming systems to offset farm greenhouse gas emissions.

No abstract