Can this technique be applied to forest planting? As mentioned, our biggest issue is the mice who eat the roots, the plan to tackle those pests is to cut the grass short regularly so they have nowhere to hide. I think maybe the mulching is for when you don’t have a mouse problem?

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Of course! It aids in more habitat for mouse eating predators.. aka snakes. Anytime you build an ecosystem the pests:predators will balance out. If you cut out parts of the ecosystem, the managers (you) have to perform the role of the parts cut out.