View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by University of Southern Queensland ePrints Technological change in the Australian irrigation industry: implications for future resource management and policy development Shahbaz Mushtaq and Tek N. Maraseni Waterlines Report Series No 53, August 2011 NATIONAL WATER COMMISSION — WATERLINES i Waterlines This paper is part of a series of works commissioned by the National Water Commission on key water issues. This work has been undertaken by Shahbaz Mushtaq and Tek N. Maraseni of the University of Southern Queensland, Toowoomba, on behalf of the National Water Commission. The report is based on work undertaken as part of a National Water Commission Fellowship which was awarded to Mr Mushtaq and Mr Maraseni in 2009–10. The Commission's Fellowship Program was established in 2007 to develop future leaders for Australia's water sector by advancing knowledge and building capacity in the sector. The program contributes to the National Water Initiative (NWI) by supporting water professionals with at least 10 years experience to undertake research in areas that could make a significant contribution to knowledge of Australia's water management and use. NATIONAL WATER COMMISSION — WATERLINES ii © Commonwealth of Australia 2011 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and enquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney General’s Department, National Circuit, Barton ACT 2600 or posted at www.ag.gov.au/cca. Online ISBN 978-1-921853-30-2 Technological change in the Australian irrigation industry: implications for future resource management and policy development, August 2011 Authors: Shahbaz Mushtaq and Tek N. Maraseni Published by the National Water Commission 95 Northbourne Avenue Canberra ACT 2600 Tel: 02 6102 6000 Email: [email protected] Date of publication: August 2011 Cover design by: Angelink Front cover image courtesy of Pat Daley An appropriate citation for this report is: Mushtaq S and Maraseni T N 2011, Technological change in the Australian irrigation industry: implications for future resource management and policy development, Waterlines report, National Water Commission, Canberra Disclaimer This paper is presented by the National Water Commission for the purpose of informing discussion and does not necessarily reflect the views or opinions of the Commission. NATIONAL WATER COMMISSION — WATERLINES iii Contents Executive summary ix Crop-level modelling results ix 1. Introduction 1 1.1 Aims and objectives 2 1.2 Scope of the study 3 1.3 Outline of the report 3 1.4 Overview of the Australian irrigation industry 3 2. Literature review 7 2.1 Comparing the efficiency of irrigation systems 7 2.2 Potential onfarm water saving 13 2.3 Water use and energy efficiency 14 2.4 Australia’s proposed CPRS and the agricultural sector 15 2.5 Summary and conclusions of literature review 17 3. Methodology 18 3.1 Integrated modelling 18 3.2 Application of the integrated framework 25 4. Empirical results 27 4.1 Estimation of potential water savings at crop level 27 4.2 Estimation of energy use and GHG emissions 27 4.3 Economics of new irrigation technology 32 4.4 Farm level case studies 41 4.5 Integrated analysis trade-off matrix 74 4.6 Irrigation technology transformation scenarios 75 5. Discussion—the effects and consequences of technological change 82 5.1 Policy-level implications 83 6. Conclusion and recommendations 86 6.1 Key conclusions 86 6.2 Key recommendations 88 Bibliography 90 Appendix A—Types of irrigation systems 99 Appendix B—Questionnaire 100 Tables Table 1: Sources of agricultural water, 2004–05 to 2008–09 .................................................... 4 Table 2: Number of establishments (sites) and irrigation methods in Australia, 2002–03 to 2008–09........................................................................................................... 5 Table 3: Irrigated cropping area 2002–03 and 2008–09 ........................................................... 6 Table 4: Water use and potential water savings for different crops under different irrigation technologies....................................................................................................... 13 Table 5: Energy implication for different farming systems ....................................................... 15 Table 6: Energy content factor in diesel and electricity and their emissions factors ............................................................................................................................... 20 Table 7: Energy content factor for agrochemicals ................................................................... 22 Table 8: GHG emissions due to use of agrochemicals, including production, packaging storage and transportation (kg CO2-e/kg fertiliser element, fe, or active chemical ingredient, ai) .......................................................................................... 22 Table 9: Nitrous oxide (N2O) emissions factors for synthetic fertiliser .................................... 23 Table 10: SWAP model simulation results for average water use and potential water savings for different crops grown under different irrigation technologies in south-eastern Queensland ........................................................................................... 27 Table 11: Energy consumption for installation, maintenance and decommissioning of irrigation machinery, accessories and infrastructure in different irrigation systems as a percentage of total energy values per megalitre of irrigation water .............................................................................................. 28 NATIONAL WATER COMMISSION — WATERLINES iv Table 12: Energy consumption and greenhouse gas emissions in different irrigation systems after considering installation, maintenance and decommissioning energy .................................................................................................. 30 Table 13: Greenhouse gas emissions estimates based on average water use under sprinkler and drip irrigation technology .................................................................. 31 Table 14: Capital and operational costs of irrigation technology ............................................. 32 Table 15: Yields and gross margins of major crops ................................................................ 33 Table 16: Economic evaluation of irrigation technology based on crops ................................ 34 Table 17: Economic evaluation of irrigation technology based on cropping pattern............................................................................................................................... 34 Table 18: Net present value (NPV) of irrigation technology under various water trading prices and water sharing plans............................................................................. 36 Table 19: Net present value (NPV) of irrigation technology under various water savings ............................................................................................................................. 37 Table 20: Net present value (NPV) of irrigation technology under various GHG emission tax ...................................................................................................................... 38 Table 21: Net present value (NPV) of irrigation technology under various yield assumptions ..................................................................................................................... 39 Table 22: Net present value (NPV) of irrigation technology under various yield assumptions ..................................................................................................................... 40 Table 23: Net present value (NPV) of irrigation technology under various interest rates .................................................................................................................................. 41 Table 24: Energy consumption (MJ/ha) and greenhouse gas emissions (kg CO2-e/ha) due to use of fuels in farm operations for cotton crops in case study 1, Darling Downs, southern Queensland ................................................................ 45 Table 25: Energy consumption (MJ/ha) and greenhouse gas emissions (kg CO2-e/ha) due to use of agrochemicals for cotton crops in case study 1, Darling Downs, southern Queensland.............................................................................. 45 Table 26: GHG emissions (kg CO2-e/ha) due to various farming inputs to the two cotton irrigation systems in case study 1, Darling Downs, southern Queensland ...................................................................................................................... 46 Table 27: Economic evaluation of sprinkler (lateral-move) irrigation technology adoption for cotton cropping in case study 1, Darling Downs, southern Queensland ...................................................................................................................... 47 Table 28: Sensitivity analysis of sprinkler (lateral-move) irrigation technology adoption for cotton cropping in case study 1, Darling Downs, southern Queensland ...................................................................................................................... 48