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\Four years data from a steepland site near Omarama, North Otago (500 mm rainfall), shows that on average oversown lucerne produced 5.3 t/ha/annum, with 3.3 t/ha of this being produced between mid August and late November. The translation of this small-plot yield to expected production under normal grazing is discussed. In deriving the expected production, corrections are made for the long term production from nearby dryland lucerne stands, the effects of varying terrain within hill blocks and the effects of grazing management on utilisation. Recent research results and farmer practice both indicate that extensive areas of lucerne can be managed with simple systems that do not necessitate more intensive subdivision than for pasture. The expected production under grazing is used in a linear programme model of a semi-arid zone farm system, which includes a wide range of options. Examples investigated with the model included ‘warm’ and ‘cold’ properties, varying levels of development and allowing some irrigation. The likely costs of establishing lucerne are some 70% greater than for a clover-based pasture. However the model shows that the pattern and quantity of grazing provided by lucerne on low-sunny country makes it a profitable part of a development programme that balances year-round feed supplies, particularly on colder properties.

PLACE OF OVERSOWN LUCERNE IN DRY HILL COUNTRY FARMING SYSTEMS