IRRIGATED AND NON-IRRIGATED AGRICULTURAL PRODUCTION

The Murray-Darling Basin is a unique region in Australia because it contains the majority of Australia's irrigated agricultural land (65% in 2005–06) (table 4.16). One reason for the proliferation of irrigated crops and pasture in the MDB is the Basin's water storage and delivery infrastructure, enabling water to be captured and transported to farms.

So far in this chapter the focus has been on total agricultural production. The following section looks more closely at irrigated agricultural production in the MDB.


Irrigated farms and area in the Murray-Darling Basin

More than 1.4 million ha (or 56%) of Australia's irrigated agricultural land is in the New South Wales and Victorian parts of the MDB (table 4.16). Approximately 90% (or 0.9 million ha) of the total New South Wales irrigated area, and 81% (or 0.5 million ha) of Victoria's total irrigated area occurs in the MDB.

4.16 Irrigated and non-irrigated land—2005–06
		Irrigated		Non-irrigated		Total Agriculture
		Area	Proportion of Australian irrigated land	Area	Proportion of Australian non-irrigated land	Area
		'000 ha	%	'000 ha	%	'000 ha
Murray-Darling Basin
	New South Wales	914	36	50 300	12	51 214
	Victoria	522	20	7 071	2	7 593
	Queensland	147	6	23 275	5	23 421
	South Australia	71	3	6 484	1	6 555
	Australian Capital Territory	-	-	45	-	45
	Total(a)	1 654	65	87 174	20	88 828
Balance of Australia
	New South Wales	80	3	10 825	3	10 906
	Victoria	126	5	4 595	1	4 721
	Queensland	393	15	121 706	28	122 098
	South Australia	145	6	48 708	11	48 854
	Western Australia	60	2	98 592	23	98 653
	Tasmania	81	3	1 658	-	1 739
	Northern Territory	7	-	59 120	14	59 127
	Total(a)	893	35	345 205	80	346 097
Australia		2 546	100	432 378	100	434 925
- nil or rounded to zero (including null cells)
(a) Components may not add to total due to rounding.
Source: Water Use on Australian Farms, 2005–06, cat. no. 4618.0

Within the MDB, more irrigated farms are located in Victoria compared with each of the other states. This concentration of irrigators indicates that the average area of irrigated farms is smaller in the Victorian part of the MDB compared with New South Wales (table 4.17).

4.17 Irrigated farms—2005–06
		Number	Proportion of state/territory irrigated farms	Area	Proportion of state/territory irrigated area
		no.	%	'000 ha	%
Murray-Darling Basin
	New South Wales	6 651	57	914	92
	Victoria	7 915	68	522	81
	Queensland	1 536	16	147	27
	South Australia	2 514	40	71	33
	Australian Capital Territory	17	100	-	100
	Total(a)	18 634	. .	1 654	. .
Balance of Australia
	New South Wales	4 936	43	80	8
	Victoria	3 706	32	126	19
	Queensland	8 324	84	393	73
	South Australia	3 783	60	145	67
	Western Australia	3 173	100	60	100
	Tasmania	1 919	100	81	100
	Northern Territory	351	100	7	100
	Total(a)	26 193	. .	892	. .
Australia(a)		44 826	. .	2 546	. .
. . not applicable
- nil or rounded to zero (including null cells)
(a) Components may not add to total due to rounding.
Source: Water Use on Australian Farms, 2005–06, cat. no. 4618.0

Irrigated and non-irrigated crops

In 2005–06, the MDB accounted for a greater proportion of Australia's non-irrigated agricultural land than it did in 2000–01 for a range of commodities including cotton (80% in 2000–01, 98% in 2005–06) and cereals other than rice (48% in 2000–01, 51% in 2005–06). In this period, the Basin's non-irrigated agricultural land decreased as a proportion of the Australian total for fruit, grapes and vegetables (table 4.18).

The MDB accounted for a lower proportion of Australia's irrigated land in 2000–01 compared with 2005–06 (decreasing from 73% to 65%). In this period, the only irrigated crop or pasture in the MDB that increased as a proportion of Australian irrigated area was fruit (from 51% to 53%).

4.18 Contribution of Murray-Darling Basin irrigated and non-irrigated land to Australia, by crop(a)—2000–01 and 2005–06
	Irrigated		Non-irrigated
	2000–01	2005–06	2000–01	2005–06
	%	%	%	%
Rice	100	100	. .	. .
Cereals (excl. rice)	90	88	48	51
Cotton	93	92	80	98
Grapes	63	58	44	43
Fruit (excl. grapes)	51	53	33	12
Vegetables(b)	32	28	22	13
Total Agriculture	73	65	18	20
. . not applicable
(a) Irrigated land as a proportion of total Australian irrigated crop land; non-irrigated land as a proportion of total Australian non-irrigated crop land.
(b) For human consumption.
Source: Water Use on Australian Farms, 2005–06, cat. no. 4618.0; ABS data available on request, Agricultural Census, 2000–01 and 2005–06

Many of the crops and pasture grown in the MDB rely on irrigation to facilitate production. In 2005-06, more than 80% of the MDB area of cotton and fruit, and more than 90% of grapes and vegetables for human consumption were irrigated (table 4.19).

The irrigated proportion of the total area for most crops showed minimal change between 2000-01 and 2005-06. However, for fruit crops, there was an increase from 77% to 85%.

All rice grown in Australia is irrigated and located in the MDB. The land area utilised for growing rice was less in 2005–06 than in 2000–01. Only 3% of area for cereals other than rice were irrigated in the MDB in 2005–06. While this proportion remained the same as in 2000-01, the irrigated and non-irrigated areas increased. Irrigated and non-irrigated cotton areas in the MDB both decreased in this period.

4.19 Irrigated and non-irrigated agricultural land, by crop and pasture—Murray-Darling Basin—2000–01 and 2005–06
	2000–01			2005–06
	Irrigated	Non-irrigated	Irrigated proportion	Irrigated	Non-irrigated	Irrigated proportion
	'000 ha	'000 ha	%	'000 ha	'000 ha	%
Pasture (native or sown)	760	na	na	717	na	na
Rice	178	. .	100	102	. .	100
Cereals (excl. rice)	260	8 835	3	329	10 053	3
Cotton	405	78	84	247	56	81
Grapes	84	7	92	106	8	93
Fruit (excl. grapes)	59	18	77	75	13	85
Vegetables(a)	37	5	89	31	3	92
Total Agriculture	1 824	81 685	2	1 654	87 174	2
. . not applicable
na not available
(a) For human consumption.
Source: Water Use on Australian Farms, 2005–06, cat. no. 4618.0; ABS data available on request, Agricultural Census, 2000–01 and 2005–06

Location of irrigated agricultural production in the Murray-Darling Basin

Irrigation activity occurs over a relatively small area of the MDB; only 2% of the total agricultural land. Irrigated crops and pasture are generally grown downstream from major water storages and delivery infrastructure, adjacent to major rivers, and often within specified irrigation districts (see map 1.16).

In 2005–06, some irrigated crops, rice and cotton for example, were grown in relatively confined areas of the MDB.

• Rice was predominantly grown in the Riverina region of southern New South Wales, around Griffith and Deniliquin.
• Approximately 39% of irrigated pasture in 2005-06 was used for dairy farming (see Chapter 3). This occurred predominantly in the northern Victorian and southern New South Wales areas of the MDB.
• Irrigated cotton was predominantly grown in the northern New South Wales and southern Queensland areas of the MDB.

Irrigated crops such as fruit, grapes, vegetables and cereals other than rice were dispersed over a larger area than cotton and rice, in 2005-06. Irrigated pasture for non-dairy livestock was also distributed over a broad area of the MDB.

• Irrigated fruit areas in the MDB followed the Murray River in the South Australian 'Riverland' region and in north-west Victoria. Irrigated fruit was also grown around Shepparton, Griffith and south-east Queensland.
• Areas of irrigated grapes were scattered along the Murray River in the 'Riverland' region of South Australia and in north western Victoria. Irrigated grapes were also grown in the southern MDB in Victoria and the eastern MDB in New South Wales.
• Irrigated vegetables were located across northern Victoria, southern New South Wales, and parts of south-east South Australia and south-east Queensland.
• Irrigated cereals other than rice were grown in northern Victoria and southern New South Wales, and around Griffith, Toowoomba, Dubbo and Tamworth.
• In 2005-06, approximately 61% of irrigated pasture was used for non-dairy livestock. Irrigated pasture used for non-dairy livestock occurred broadly across much of the MDB, with particular concentration in northern Victoria and southern New South Wales.

Economic value of Agriculture in the Murray-Darling Basin

This section presents estimates of the value of agricultural production in the MDB along with estimates of the value of irrigated agricultural production. The gross value of agricultural production in 2005-06 was published in the ABS Value of Agricultural Commodities Produced, Australia, 2005-06 (cat. no. 7503.0).

Australia's Agriculture industry not only produces food and fibre for domestic consumption and export, but in 2005-06 represented approximately 3% of Australia's Gross Domestic Product (GDP) (ABS 2006b). In 2005-06, Agriculture in the Murray-Darling Basin produced a gross value of agricultural production (GVAP) of $14,991m, 39% of Australia's total GVAP ($38,541m, see table 4.20).

Of all agricultural commodities, livestock (excluding dairy, $4,225m) and cereals other than rice ($3,436m) produced the most economic value, followed by dairy farming ($1,172m) and fruit ($1,111m).

4.20 Gross Value of Agricultural Production(a), by commodity—2005–06
	MDB	Aust.	MDB as a proportion of Aust.
	$m	$m	%
Dairy farming	1 172	3 603	33
Other livestock	4 225	10 987	38
Rice	274	274	100
Cereals (excl. rice)	3 436	7 320	47
Cotton	861	933	92
Grapes	777	1 377	56
Fruit (excl. grapes)	1 111	2 627	42
Vegetables	602	2 923	21
Other agricultural commodities(b)	2 533	8 494	30
Total agricultural commodities(c)	14 991	38 541	39
(a) In current price terms, see Explanatory Notes.
(b) Includes other broadacre crops and nurseries.
(c) Components may not add to total due to rounding.
Source: ABS data available on request, Value of Agricultural Commodities Produced, Australia, 2005–06

In the 5 years from 2000-01 to 2005-06, the GVAP in the Murray-Darling Basin increased 7.3%, from $13,964m to $14,991m in current price terms (table 4.21). This was lower than the general increase in the cost of living over this period when compared with the All Groups Consumer Price Index which increased by 14.7% between 2000-01 and 2005-06 (cat. no. 6401.0). Furthermore, the increase in Australian GVAP (12%) was more than the increase in MDB GVAP over the same period (7%). From 2000-01 to 2005-06, the GVAP of some commodities increased (e.g. dairy farming, other livestock and fruit), however others decreased (e.g. rice, cotton and grapes).

4.21 Gross Value of Agricultural Production(a), by commodity—2000–01 and 2005–06
	Murray-Darling Basin		Australia
	2000-01	2005-06	2000-01	2005-06
	$m	$m	$m	$m
Dairy farming	1 037	1 172	3 283	3 603
Other livestock	2 817	4 225	8 364	10 987
Rice	349	274	350	274
Cereals (excl. rice)	3 565	3 436	7 327	7 320
Cotton	1 184	861	1 305	933
Grapes	874	777	1 517	1 377
Fruit (exc. grapes)	839	1 111	2 020	2 627
Vegetables	603	602	2 251	2 923
Other agricultural commodities(b)	2 695	2 533	7 723	8 494
Total agricultural commodities(c)	13 972	14 991	34 164	38 541
(a) In current price terms, see Explanatory Notes.
(b) Includes other broadacre crops and nurseries.
(c) Components may not add to total due to rounding.
Source: ABS data available on request, Value of Agricultural Commodities Produced, Australia, 2005–06

Economic value of irrigated agricultural production

Maximising economic benefit from irrigation is a key theme emerging from recent water policies. There is strong interest in estimating the value generated from irrigating crops. A central component of the federal government's National Water Initiative (NWI) concerns the flow of water to its highest value use (see Appendix). Integrating the volume of water used with a measure of the return to the Australian economy provides one indication of the economic benefit obtained from applying water to certain agricultural commodities. The change over time provides an indication of whether water is being utilised by relatively higher value users.

Allocative efficiency refers to how well water is allocated across industries in terms of the production value returned to the economy per quantity of water used. Allocative efficiency is achieved when it is not possible to increase the value added for the economy as a whole by transferring water from one activity to another (The Treasury: Roberts, Mitchell and Douglas 2006).

The following section provides an analysis of the Gross Value of Irrigated Agricultural Production (GVIAP) in the MDB generated by different agricultural commodities, including a comparison with the volume of water consumed in the same period. The irrigated value of production is compared to non-irrigated value of production, and the change in GVIAP between 2000-01 and 2005-06 is also presented.

GVIAP should not be used as a proxy for determining the highest value water use, because water is not the only input to agricultural production from irrigated land (ABS 2006a). Land, fertiliser, labour, machinery and other inputs are also used, and their contribution to agricultural production cannot be separately identified. Estimates of GVIAP are derived from agricultural commodity values in the 2000-01 and 2005-06 editions of Value of Agricultural Commodities Produced, Australia (cat. no. 7503.0). Further details on the methods used to derive the estimates are presented in the Explanatory Notes.

In 2005-06, nearly $4.6 billion, or 44% of Australia's GVIAP originated in the MDB (table 4.22). The majority of the GVIAP for rice (100%), cotton (92%), and cereals other than rice (84%) was generated in the Basin.

4.22 Gross Value of Irrigated Agricultural Production(a), by commodity—2005–06
	MDB	Aust.	MDB as a proportion of Aust.
	$m	$m	%
Dairy farming	938	1 812	52
Other livestock	132	180	73
Rice	274	274	100
Cereals (excl. rice)	92	109	84
Cotton	797	869	92
Grapes	722	1 228	59
Fruit (excl. grapes)	898	1 820	49
Vegetables	530	2 473	21
Other agricultural commodities(b)	193	1 722	11
Total agricultural commodities(c)	4 576	10 486	44
(a) In current price terms, see Explanatory Notes
(b) Includes sugar and other broadacre crops and nurseries.
(c) Components may not add to total due to rounding.

In 2005-06, the highest GVIAP was generated from dairy farming ($938m or 20% of the MDB GVIAP), fruit ($898 or 20%), cotton ($797m or 17%), and grapes ($722m or 16%) (table 4.23).

4.23 Gross Value of Irrigated Agricultural Production(a), by commodity—Murray-Darling Basin—2005–06
	GVIAP	Proportion of total GVIAP
	$m	%
Dairy farming	938	20
Other livestock	132	3
Rice	274	6
Cereals (excl. rice)	92	2
Cotton	797	17
Grapes	722	16
Fruit (excl. grapes)	898	20
Vegetables	530	12
Other agricultural commodities(b)	193	4
Total agricultural commodities(c)	4 576	100
(a) In current price terms, see Explanatory Notes
(b) Includes other broadacre crops and nurseries.
(c) Components may not add to total due to rounding.

Although the MDB generated 44% of Australia's GVIAP in 2005-06, this was achieved with 66% of Australia's agricultural water consumption (see Chapter 3). Cotton consumed a significant volume of water (20% of agricultural water consumption in the MDB) to generate 17% of the MDB GVIAP. Rice also accounted for a significant volume of agricultural water consumption in the MDB (16%), but generated only 6% of GVIAP. Vegetables generated 13% of GVIAP but consumed only 2% of MDB water consumption (see table 4.24 and graph 4.25).

4.24 Gross Value of Irrigated Agricultural Production and water consumption, by commodity—Murray-Darling Basin—2005–06
	GVIAP(a)	Proportion of total GVIAP	Water consumption	Proportion of total water consumption
	$m	%	GL	%
Dairy farming	938	21	1 287	17
Other livestock	132	3	1 284	17
Rice	274	6	1 252	16
Cereals (excl. rice)	92	2	782	10
Cotton	797	17	1 574	20
Grapes	722	16	515	7
Fruit (excl. grapes)	898	20	413	5
Vegetables	530	12	152	2
Other agricultural commodities(b)	193	4	460	6
Total agricultural commodities(c)	4 576	100	7 720	100
(a) In current price terms, see Explanatory Notes.
(b) Includes other broadacre crops and nurseries.
(c) Components may not add to total due to rounding.

In 2005-06, the value generated from irrigated agricultural production contributed a greater proportion of the value of total agricultural production in the MDB (31%) than for the whole of Australia (27%). In the MDB, GVIAP represented 33% of the total GVAP in 2000-01, however this decreased to 30% in 2005-06. GVIAP made up 26% of Australia's total GVAP in 2000-01 and 27% in 2005-06.

In the 5 years from 2000-01 to 2005-06, the GVIAP in the MDB did not change significantly, remaining at approximately $4.6 billion in current price terms. In comparison, the GVIAP for Australia increased by 18% in this period (table 4.26).

4.26 Gross Value of Irrigated Agricultural Production and Gross Value of Agricultural Production(a)—2000–01 and 2005–06
		Total GVIAP	Total GVAP	GVIAP as a proportion of GVAP
		$m	$m	%
2000-01
	Murray-Darling Basin	4 585	13 972	33
	Australia	8 895	34 164	26
2005-06
	Murray-Darling Basin	4 576	14 991	31
	Australia	10 486	38 541	27
(a) In current price terms, see Explanatory Notes.

Changes in GVIAP between 2000-01 and 2005-06 varied for different agricultural commodities (table 4.27). Caution should be made when assessing whether the movement from 2000-01 to 2005-06 constitutes a long-term trend, because the GVIAP of annual crops like rice and cotton may fluctuate significantly from year to year depending on water availability.

4.27 Gross Value of Irrigated Agricultural Production(a), by commodity—2000–01 and 2005–06
	Murray-Darling Basin		Australia
	2000–01	2005–06	2000–01	2005–06
	$m	$m	$m	$m
Dairy farming	926	938	1 811	1 812
Other livestock	62	132	83	180
Rice	349	274	350	274
Cereals (excl. rice)	106	92	118	109
Cotton	1 105	797	1 215	869
Grapes	809	722	1 352	1 228
Fruit (excl. grapes)	630	898	1 313	1 820
Vegetables	486	530	1 803	2 473
Other agricultural commodities(b)	112	193	850	1 722
Total agricultural commodities(c)	4 585	4 576	8 895	10 486
(a) In current price terms, see Explanatory Notes.
(b) Includes other sugar, broadacre crops and nurseries.
(c) Components may not add to total due to rounding.

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