Opportunities and challenges in Australian grasslands: pathways to achieve future sustainability and productivity imperatives Lindsay W. Bell A,E , Richard C. Hayes B , Keith G. Pembleton C , and Cathy M. Waters D A CSIRO Ecosystems Sciences/CSIRO Sustainable Agriculture Flagship, PO Box 102, Toowoomba, Qld 4350, Australia. B EH Graham Centre for Agricultural Innovation (New South Wales Department of Primary Industries & Charles Sturt University), Pine Gully Road, Wagga Wagga, NSW 2650, Australia. C Tasmanian Institute of Agriculture, University of Tasmania, Private Bag 3523, Burnie, Tas. 7320, Australia. D New South Wales Department of Primary Industries, Trangie Agricultural Research Centre, PMB 19, Trangie, NSW 2823, Australia. E Corresponding author. Email: Lindsay.Bell@csiro.au Abstract. Grassland production systems contribute 40% to Australia’s gross agricultural production value and utilise >50% of its land area. Across this area, diverse systems exist, but these can be broadly classified into four main production systems: (i) pastoral grazing, mainly of cattle at low intensity (i.e. <0.4 dry sheep equivalents/ha) on relatively unimproved native rangelands in the arid and semi-arid regions of northern and central Australia; (ii) crop–livestock systems in the semi- arid zone where livestock graze a mixture of pastures and crops that are often integrated; (iii) high-rainfall, permanent pasture zone in the coastal hinterland and highlands; and (iv) dairy systems covering a broad range of environments and production intensities. A notable trend across these systems has been the decline in sheep numbers and the proportion of income from wool, with beef cattle or sheep meat increasingly important. Although there is evidence that most of these systems have lifted production efficiencies over the past 30 years, total factor productivity growth (i.e. change in output relative to inputs) has failed to match the decline in terms of trade. This has renewed attention on how research and development can help to increase productivity. These industries also face increasing scrutiny to improve their environmental performance and develop sustainable production practices. In order to improve the efficiency and productivity of grassland production systems, we propose and explore in detail a range of practices and innovations that will move systems to new or improved states of productivity or alter efficiency frontiers. These include: filling gaps in the array of pastures available, either through exploring new species or improving the adaptation and agronomic characteristics of species currently sown; overcoming existing and emerging constraints to pasture productivity; improving livestock forage-feed systems; and more precise and lower cost management of grasslands. There is significant scope to capture value from the ecological services that grasslands provide and mitigate greenhouse gas emissions from livestock production. However, large reductions in pasture research scientist numbers (75–95%) over the past 30 years, along with funding limitations, will challenge our ability to realise these potential opportunities. Additional keywords: breeding, economics, feed-base, grazing, greenhouse gas, pasture, precision agriculture, perennial. Received 2 December 2013, accepted 27 February 2014, published online 30 May 2014 Introduction Grasslands cover a large proportion of Australia and contribute 40% of the value of Australia’s agricultural production (Australian Bureau of Statistics 2012). Agricultural enterprises cover 400 Mha, or 52%, of Australia’s land area. Only 6.5% of this agricultural area (i.e. 26 Mha) is sown to crops (Australian Bureau of Statistics 2012). The remainder is primarily made up of sown or native pastures, which underpin the sheep, beef cattle and dairy industries. In the period 2007–08 to 2009–10, these industries together were valued at AU$15.8 billion per year to Australia’s economy (Australian Bureau of Statistics 2012). Beef production was the largest industry, with 24.7 million head in the national herd, and beef cattle slaughters were valued at AU$7.4 billion annually. Sheep numbers were ~73 million head, which has declined steadily from 170 million in 1990. The sheep industry produced AU$2.4 billion per year from slaughter of sheep and lambs and $2.0 billion per year from wool. Together sheep and cattle slaughters produced 2.7 Mt of meat, of which nearly half was exported (1.3 Mt). In addition, Australia has a significant live export industry of sheep (AU$338 million) and Journal compilation Ó CSIRO 2014 www.publish.csiro.au/journals/cp CSIRO PUBLISHING Crop & Pasture Science, 2014, 65, 489–507 Review http://dx.doi.org/10.1071/CP13420