Hill pasture renovation methods have been restricted in the past to surface oversowing of unaltered, trampled or burnt pastures. Unfortunately the old pasture recovers and may compete vigorously with the establishing new species, slowing pasture improvement. The availability of suitable herbicides has opened up a new opportunity for hill pasture development. Herbicide applied before oversowing can minimise the competition and allow the new species to establish more easily. The benefits include reduced time to attain optimal stocking rates and improved establishment control, but these are offset by higher initial costs. The technical aspects of the herbicide establishment methods are overshadowed by the economic factors which control the profitability of the programme, however successfully applied. As the cash flow patterns differ between the tradrtional renovation and the herbicrdebased techniques, changes in interest rates and prices have differential effects. Real interest rates below 7% make both methods profitable but are more favourable to the herbicide technique at 1987 prices, Also, price increases favour the herbicide method. Among other issues affecting the speed and profitability of development and ultimate gain, management skull is found to be crucial and dominates both establishment methods. Keywords: hill pastures, renovation, herbicides, interest rates, management skill, profitability
