The economic impact of prescribed fire on grazing leases in the mallee eucalypt regions of southwestern New South Wales

Conflicts have arisen over the appropriate land use for the mallee eucalypt shrublands of southwestern New South Wales. The major proportion of these lands are presently held as Crown grazing leases, whose future economic viability is threatened by a continuing cost-price squeeze on livestock production. Prescribed fire management can lead to significant productivity gains by thinning dense stands of mallee eucalypt shrubs to promote increased herbage production. However, prescribed fire is presently prohibited, pending the formulation of regional management plans and research into the environmental and conservation implications of different land management activities. The paper uses a case study approach to examine the economic impact of prescribed fire to assess its attraction to grazing leaseholders, and the potential income opportunity cost of further prohibition of the technique. The analysis shows that prescribed fire can yield high rates of economic return, thereby placing pressure on management agencies to define the environmental implications of widescale use of the technique.