4610.0.55.008 - Experimental Estimates of the Gross Value of Irrigated Agricultural Production, 2000-01

4610.0.55.008 - Experimental Estimates of the Gross Value of Irrigated Agricultural Production, 2000-01 - 2007-08

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ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 30/07/2010

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BACKGROUND

Gross Value of Irrigated Agricultural Production (GVIAP) estimates have been a core component of the ABS Water Account (cat. no. 4610.0) which is produced every four years. Growing demand from policy-makers and other users has led to an increasing pressure on the ABS to produce more accurate and frequent estimates of GVIAP at a sub-state geographic level. This product presents the ABS response to these information needs.

Recently, the ABS developed an improved methodology for calculating GVIAP, which is described in the information paper Methods of estimating the Gross Value of Irrigated Agricultural Production (cat. no. 4610.0.55.006). The experimental estimates presented here use this improved method.

GVIAP refers to the gross value of agricultural commodities that are produced with the assistance of irrigation. The gross value of commodities produced is the value placed on recorded production at the wholesale prices realised in the marketplace. Note that this definition of GVIAP does not refer to the value that irrigation adds to production, or the "net effect" that irrigation has on production - rather, it simply describes the gross value of agricultural commodities produced with the assistance of irrigation. GVIAP is not a measure of productivity.

For this reason, extreme care must be taken when attempting to use GVIAP figures to compare different commodities - that is, the gross value of irrigated production should not be used as a proxy for determining the highest value water uses. Rather, it is a more effective tool for measuring changes over time or comparing regional differences in irrigated agricultural production (see Explanatory Notes for more information).

In the first issue of this product, released in May 2009, tables relating to the reference period 2000-01 to 2006-07 were presented for Australia, States and Territories and the Murray-Darling Basin.

This second issue builds on the time series with the addition of 2007-08 data for Australia, States and Territories and the Murray-Darling Basin, as well as Natural Resource Management (NRM) region level data for 2005-06, 2006-07 and 2007-08.

Further, the GVAP (Gross Value of Agricultural Production, also referred to as VACP) and GVIAP estimates for 2005-06 and 2006-07 shown in this latest release have been revised where necessary, for example, when a new price becomes available for a commodity after the previous publication.

These estimates are presented in current prices, and therefore changes between years do not show the impact of changes in prices over time (see Explanatory Notes).

The ABS plans to release GVIAP estimates on an annual basis. It is anticipated that future issues of the product will include additional information including chain volume measures at the national level and some further regional breakdown.

ABS welcomes comments on these experimental estimates. Please contact Steven May on 02 6252 5593 or email at steven.may@abs.gov.au.

SUMMARY OF FINDINGS

In 2007-08, irrigated agricultural land comprised less than 0.5% of all agricultural land in Australia. The gross value of production from irrigation was $12,311 million, which represented 28% of the total gross value of agricultural production. This figure was down from 2006-07, when GVIAP was $12,488 million and represented 35% of the total gross value of agricultural production.

In general, there has been an increasing trend in GVIAP since 2000-01 when it was $9,669 million.

The decrease in GVIAP in 2007-08 was in line with a similar decline in the volume of water used for irrigation in 2007–08 due to the continuing limited availability of water during the drought. Australia's irrigated agricultural water use in 2007–08 decreased 18% to 6,285 gigalitres on the back of a 29% drop in 2006–07. While the long-term trend in GVIAP has been upwards, the total use of water for irrigated agricultural production has been declining.

In 2007-08, vegetables for human consumption contributed the highest value to total irrigated production of $2,972 million, followed by fruit and nuts ($2,292 million) and dairy production ($2,289 million). These three commodity groups accounted for 61% of total GVIAP.

There are some commodities for which the value of irrigated production contributes significantly to the total value of agricultural production. The entire value of rice production in Australia ($55 million in 2006-07, dropping to $7 million in 2007-08) is produced under irrigation. The irrigated value of production from cotton, grapes, fruit and nuts, vegetables and nurseries, cut flowers and cultivated turf in 2007-08 accounted for 80% or more of total production for each of those products. Cotton followed the same trend as rice in 2007-08 with a 57% reduction in irrigated agricultural production.

The State which contributed the most to the value of irrigated production during 2007-08 was Victoria - $3,712 million or 30% of Australia's total GVIAP. The GVIAP for Victoria increased by 13% from 2006-07 to 2007-08, as opposed to the GVIAP for Queensland, which decreased 15% over the same period (from $3,642 million to $3,103 million).

The NRM producing the most GVIAP in 2007-08 was Goulburn-Broken, in the MDB in central Victoria. The GVIAP for this region was $1,043 million, an increase of 11% from 2006-07. From 2005-06 to 2007-08, SA Murray Darling Basin was the NRM region with the greatest increase in GVIAP ($681 million to $896 million). The Murray NRM region in NSW had the largest decrease in GVIAP over the same period ($439 million to $205 million). The maps linked below provide a national snapshot of the relative intensities of GVIAP and GVAP at NRM region level across Australia.

Statistics for the Murray-Darling Basin (MDB) relating to irrigation are only available for 2000-01, 2005-06, 2006-07 and 2007-08. In 2007-08 the MDB had irrigated production to the value of $5,079 million, or 41% of Australia’s total value of irrigated production. In contrast, the value of irrigated production in the MDB in 2000-01 was $5,085 million, or 53% of the total value of irrigated production for the nation at that time.

Irrigated production in the MDB accounted for 33% of the total value of all agricultural commodities produced in the Basin in 2007-08 (down from 39% in 2006-07).

The commodities that contributed most to the value of irrigated production during 2007-08 in the MDB were fruit and nuts ($1,182 million or 23%), grapes ($1,104 million or 22%) and dairy production ($961 million or 19%).

During 2000-01, cotton had been the commodity that contributed most to the total value of irrigated production ($1,111 or 22%) of total GVIAP for the MDB. However by 2007-08 this commodity only accounted for $193 million or 4% of total GVIAP in the MDB. This is reflected in the decrease in the volume of water applied to cotton, with the volume decreasing from 1,574 GL in 2005-06 to 283 GL in 2007-08.