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The Irrigation Industry in the Murray and Murrumbidgee Basins Wayne S

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The Irrigation Industry in the Murray and Murrumbidgee Basins Wayne S The Irrigation Industry in the Murray and Murrumbidgee Basins Wayne S. Meyer CRC for Irrigation Futures Technical Report No. 03/05 June 2005 Copyright and Disclaimer © 2005 CRC for Irrigation Futures. To the extent permitted by law, all rights are reserved and no part of this publication covered by copyright may be reproduced or copied in any form or by any means except with the written permission of CRC for Irrigation Futures. Important Disclaimer: CRC for Irrigation Futures advises that the information contained in this publication comprises general statements based on scientific research. The reader is advised and needs to be aware that such information may be incomplete or unable to be used in any specific situation. No reliance or actions must therefore be made on that information without seeking prior expert professional, scientific and technical advice. To the extent permitted by law, CRC for Irrigation Futures (including its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it. Cover Photographs: By permission from CSIRO Land and Water Image Gallery: www.clw.csiro.au/ImageGallery/ Description: Sunset over ancient cliffs on the Murray River, upstream from Renmark, SA. 2002. File: ASA_RIV001_006.jpg Photographer: Greg Rinder Description: Pumping Station on the Murray River at Loxton, SA. 2004. File: ASA_ WSU001_009.jpg Photographer: Greg Rinder Description: Murrumbidgee River with lucerne and wheat crops near Wagga Wagga, NSW. 1999. File: CSA_AGR001_004.jpg Photographer: Greg Heath Description: Overhead sprinklers irrigating a vineyard at Loxton, SA. 1989. File: PDB00205_030.jpg Photographer: Willem van Aken © 2005 CSIRO The Irrigation Industry in the Murray and Murrumbidgee Basins Wayne S. Meyer CRC for Irrigation Futures Technical Report No. 03/05 June 2005 CRC for Irrigation Futures Page i Acknowledgements The work contained in this report is collaboration with the Water for a Healthy Country National Research Flagship; the work undertaken is a component of the Murray node program in the Flagship. The Flagship is a research partnership between CSIRO, state governments and the Australian Government, private and public industry and other research providers. The Flagship was established in 2003 as part of the CSIRO National Research Flagship Initiative. The Project was initiated through the CSIRO Water for a Healthy Country Flagship Program. The enthusiasm and input from Colin Creighton and his team including Warwick MacDonald and Sarah Ryan is gratefully acknowledged. Many people have assisted in defining, developing and providing data for this project. Among them are Sandy Robinson Murray-Darling Basin Commission, Gerrit Schrale South Australian Research and Development Institute, Lindsay Beck and Jim Parrett NSW Statewater, Derek Poulton and Jim Viney Goulburn Murray Water, Phil Cole Department of Water, Land and Biodiversity Conservation, CEOs and staff of various irrigation water supply companies. The team: Wayne Meyer, CRC IF, CSIRO Land and Water Steve Marvanek, CSIRO Land and Water, Spatial Technology Unit Sue Saunders, CRC IF, CSIRO Land and Water Brett Bryan, CSIRO Land and Water, Policy and Economics Research Unit Evan Christen, CSIRO Land and Water, CRC IF John Hornbuckle, CSIRO Land and Water, CRC IF Shahbaz Khan, CSIRO Land and Water, Charles Sturt University, CRC IF Tian Shi, CSIRO Land and Water, Policy and Economics Research Unit, CRC IF Mike Young, CSIRO Land and Water, Policy and Economics Research Unit, CRC IF Consultants: Ann Shaw Rungie QED Max Dewdney QED Sharon Leith QED Tony Read KBR Angela Gackle CRC for Irrigation Futures Page ii Executive Summary All Australians benefit from irrigation, either directly through the constant supply of quality fresh fruit and vegetables, grains and fibre or economically from irrigated production that is a significant contributor to national wealth generation. Producing these many and varied food and fibre supplies, and generating wealth with irrigation, requires suitable land, water, capital, infrastructure, skill and institutional organisation. Limits on any of these vital inputs will limit the benefits that can be obtained. Hence concern in Australia, particularly in the southern regions of the continent, about the continuing availability of water has particular interest for irrigators and the industry. However, the ability of the industry to articulate its concerns and to develop a full appreciation of its size, position and importance has been hampered by the lack of a contemporary compilation of the industry. This study sets out to collate a hitherto scattered set of information on irrigation in the Murray and Murrumbidgee Basins and so provide a "bird's eye view" of irrigation in the south eastern part of Australia. From this "bird's eye view", we present data indicating the size and position of irrigated production and its impact on both the regional resources and the dependent communities. This provides some indicators that illustrate where the opportunities for increased irrigated productivity are located and the conditions that are generally necessary for the opportunities to be realised. Irrigation – a “bird’s eye view” This study highlights that irrigated production generates a level of economic and community activity that is three to five times higher than would be supported from rain-fed production alone. It also shows that significant opportunity exists for further expansion and intensification of irrigated activity through improved water distribution and application efficiency, and through improved water productivity, largely mediated by improved management skill and controlled irrigation systems. Economic productivity or profit? At a National and State level, a major motivator for regional development is the desirability of increasing the economic productivity from the use of resources, often expressed in terms of $/ha or $/Ml1. While these measures are useful at this broad scale, they do not directly accord with the drivers of activity at the individual irrigated farm enterprise level. This study has illustrated that large returns are almost always accompanied by large capital and skill investment, although this does not necessarily lead directly to high profit - a major and critical determinant of enterprise viability. Irrigated farm businesses that are successful because they are profitable and operated by satisfied people come from the full spectrum of operations, from intense horticulture, annual cropping and dairying. Hence, many profitable irrigated enterprises do not have the same gross return per ha or per Ml. Given the biophysical, market, infrastructure and skill conditions, the current use of resources is profitable and of significant local benefit. Whether, on balance, these resources could be used for alternate purposes with greater net benefit for society as a whole is much less clear. Although it is useful to have broad scale measures with respect to the use of resources, such measures do not necessarily accord with the drivers at an individual enterprise level. Recognition of this does not diminish the reality that, within similar enterprises, performance is highly variable. Studies of this variability show that it is very strongly associated with variable management capability and that considerable improvement is always possible. Many of these improvements, generally aimed at increasing profit, or increasing ease of 1 Abbreviation used commonly through this report: ha = hectare, Ml = megalitre (1 million litres), GL = Gigalitre (1000 million litres), kg = kilogram CRC for Irrigation Futures Page iii operation, will bring about improved water and land productivity, often by correlation rather than by causation. Irrigation efficiency or productivity? In the discussion above, care has been taken to distinguish the use of terms such as efficiency and productivity. Terminology, or the language used, can assist or confuse communication. In Australia thus far, there has been focus on improved "water use efficiency" as a means of alleviating an increasing "economic shortage of water". While values of Ml/ha and $/Ml are useful measures at a broad scale, they are not efficiency measures. It is appropriate to identify water storage efficiency, water delivery efficiency or water application efficiency i.e. measured water out relative to measured water in. In irrigation, water is used to develop useable or saleable plant product with the aim of optimising water productivity expressed as kg/Ml as a component in maximising enterprise profit. Water, transpired by plants in producing useable material, can be thought of as beneficial depletion; that evaporated from the soil surface is truly lost from the immediate hydrological cycle and is a non-beneficial depletion of water. Land productivity is the traditional measure of yield on a unit area basis i.e. kg/ha. Irrigated regions in the Murray and Murrumbidgee Basins The irrigated areas of the Murray and Murrumbidgee Basins were grouped into ten regions on the basis of similarity of regional biophysical conditions, supply systems, commodity production and institutional arrangements. Using data from a range of sources, supplemented by derived productivity and profitability estimates, a comprehensive picture of irrigated activity and its
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