Tamworth's Keith Pengilly is part of a five-year research project into the key limitations, consequences and economic drivers of farming systems, which is funded by the Grains Research and Development Corporation (GRDC).

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Mr Pengilly said the key question was "how effectively are our crops using water that is stored in the soil?" and how this affects decision-making.

"The most useful thing for growers is to understand and get a better understanding of how much soil water is available at planting time, that way growers can make an informed decision about matching crop types to the plant available water in their system," Mr Pengilly said.

"Where we are at the moment - going through three years of drought so far and impacting on businesses - people need to make correct decisions about what's going to generate cash flow at a low risk.

"You don't want to go and spend a large amount of money upfront for a potential crop fail, so you want to make sure you've got as many risk factors accounted for in your business [as possible]."

The University of Sydney's Nowley Farm at Spring Ridge is one of seven trial sites for the project and Mr Pengilly said the "key driver" was looking at the profitability of different cropping systems that growers would normally use across the Liverpool Plains.

"The primary thing we're looking at is around what the economics are. What is the most profitable system for growers?" he said.

"The second one is looking at, how are the different systems affecting soil fertility, and as a part of that, do we need to increase the amount of fertiliser we're adding to the system as we're increasing our cropping intensity?

"The other one is looking at water use within the cropping system."

Mr Pengilly said the drought had highlighted the importance of crop stubble in retaining rainfall and reducing soil eroision

"The big difference is the amount of water we're actually capturing from rainfall and storing in our soils, and that's driven by the type of crop stubble or crop residue that is left behind from the previous crop," he said.

"If we use wheat or barley as the standards - and they're probably the better ones for main ground cover - and include our fallow efficiencies or water stored in the soil, they're operating at around 28 per cent.

"So for around 100mm of rain that falls, around 28mm is being stored and is available for next year's subsequent crop."

Mr Pengilly said a major issue across the north west is that pulse crops, particularly canola and chickpeas, "leave very little residue behind" so they are only capturing "about 10-13 per cent of that rainfall".

"The biggest challenge we have is ... because we just haven't had the rainfall amount, we're running below deposit rainfall [and] the big difference between where we're grow pulses compared to wheat or barley, we're starting from a position further back," he said.

"So if it does rain, say tomorrow, the systems that are based on a wheat stubble will have more moisture in them and more available to plant next year.

"If we start with chickpeas, we've got a much drier profile and it won't capture as much moisture if it does rain, and we'll go into the next season with those crops not having as much water available for them."

Mr Pengilly said as the drought continued, ground cover would become "a primary decision-making point" for farmers.