Whole-farm economic and risk effects of conservation agriculture in a crop-livestock system in western China

• Simulated economic and risk effects of different crop residue retention practices for a crop-livestock agricultural household.
• Retaining minimal crop residues produced highest profits in the short term.
• Full crop residue retention produced highest profits in the long term.
• Crop residue usage trade-offs are strong when markets are incomplete or alternative livestock feed sources are scarce.

Researchers advocate using conservation agriculture as a tool to improve farmer livelihoods, with crop residue retention being an integral component of conservation agriculture. Crop residues are used for mulch, livestock feed, and fuel material in crop-livestock farming systems. In this article, we conducted long-term simulation modelling to compare the economic effects of different crop residue retention practices for a crop-livestock agricultural household in semi-arid China. We calculated the average profit and net present value (and associated variability) of different crop residue retention practices using planning horizons of 3, 6, 10, and 20 years. Crop residue retention increased grain production, reduced forage production leading to smaller livestock flock sizes, and increased family heating and cooking costs. The net effect was that retaining minimal crop residues gave the highest profits using the three year planning horizon.Full crop residue retention provided the highest profit when the planning horizon exceeded 10 years. Relatively flat economic payoffs associated with changing crop residue usage around the maximum economic payoff existed. Calls for comprehensive crop residue retention are unlikely to be attractive when farmers discount future profits, and when crop residues have significant value as a fuel and feed source. The economic benefits of crop residue retention can take numerous years to eventuate and retaining crop residues also increased simulated ground cover and this positive environmental impact extends beyond individual farm boundaries. Because of these time lags and external environmental benefits, providing financial incentives to retain crop residues during the initial transition years could be a policy option.