Costs, benefits, institutional and social considerations for irrigation development. A technical report to the Australian Government from the CSIRO Northern Australia Water Resource Assessment, part of the National Water Infrastructure Development Fund: Water Resource Assessments

Stokes, Chris, Addison, Jane, Macintosh, Andrew, Jarvis, Diane, Higgins, Andrew, Doshi, Amar, Waschka, Marie, Jones, Judy, Asmi, Wood, Horner, Nerida, Barber, Marcus, Bruce, Caroline, Austin, Jim, and Lau, Jacqui (2017) Costs, benefits, institutional and social considerations for irrigation development. A technical report to the Australian Government from the CSIRO Northern Australia Water Resource Assessment, part of the National Water Infrastructure Development Fund: Water Resource Assessments. Report. CSIRO, Canberra, ACT, Australia.

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Abstract

In recent decades there has been a shift towards greater scrutiny of the commerciality of potential new water infrastructure projects, particularly where public investment is involved. This report contains information to assist in planning and evaluating the viability of investments in new large-scale irrigated development, quantifying the costs, benefits and risks involved. Three study areas across northern Australia were considered: the Fitzroy catchment (WA), a set of catchments around Darwin (NT) and the Mitchell catchment (QLD). The primary focus of this Assessment, as documented in the companion reports, is an analysis of water and soil resources to help identify opportunities and constraints for new irrigated agriculture in the Assessment area. This report complements the overall Assessment by identifying the social, institutional and economic conditions that would be required for those potential opportunities to be most likely to succeed. Part I of the report begins by setting the context for irrigated development in the study areas, providing background information on the communities, economies and existing infrastructure from which potential new developments would build. Part II of the report considers social and institutional aspects of new irrigated development to help identify those opportunities that are most attractive to investors and stakeholders, and that meet legal, regulatory and policy requirements. Part III then provides information on the costs and benefits of developing new irrigated agriculture, to identify what would be required for different types of development to be financially and economically viable. The broad conclusion of this report is that it would be challenging to find opportunities for new irrigated agriculture in the Assessment area that met regulatory requirements and gained stakeholder support while also providing a financial rate of return to investors commensurate with the level of risk involved. Revenue at the farm gate from broadacre cropping alone would be unlikely to fully cover the costs of new irrigated development. It is more likely that any case to justify new developments would rely on additional benefits beyond the farm gate such as value adding from local processing, generation of renewable electricity (hydro-electric power or bioenergy), co-benefits to other industries such as grazing or tourism, and/or other indirect benefits to local communities. The possible benefits of integrated schemes would need to be carefully balanced against the extra complexity and elevated risks from having additional sources of vulnerability that could lead to financial failure. Successful investments would likely have to combine meeting the above criteria with the cheapest sources of water, lowest risks (including water reliability, agronomic, climatic and regulatory risks) and most productive mixes of land and farming options. The main findings from this report are summarised below by the four main topics of analysis. Stakeholders and investors Legal and institutional context Scheme commerciality Regional economics Reference information on demographics, industries and infrastructure costs (details under above sub-headings are contained in the full Executive Summary)

Item ID: 57894
Item Type: Report (Report)
ISBN: 978-1-4863-1051-7
Keywords: agriculture, development, northern Australia, stakeholder, legal, economics, financial, regional, infrastructure, demographics; Northern Australia Water Resource Assessment; NAWRA
Copyright Information: © Commonwealth Scientific and Industrial Research Organisation 2018. 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 CSIRO.
Funders: Department of Infrastructure and Regional Development, Australian Government
Date Deposited: 24 Jul 2019 01:42
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140201 Agricultural Economics @ 50%
14 ECONOMICS > 1402 Applied Economics > 140202 Economic Development and Growth @ 50%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910103 Economic Growth @ 50%
96 ENVIRONMENT > 9609 Land and Water Management > 960905 Farmland, Arable Cropland and Permanent Cropland Water Management @ 50%
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