Year: 2012
Type: report
Abstract: Development of new agricultural industries in northern Australia is seen as a way to provide food \nsecurity in the face of reduced water availability in existing regions in the south. This report aims to \nidentify some of the possible economic consequences of developing a rice industry in the Burdekin \nregion, while there is a reduction of output in the Riverina. \nAnnual rice production in the Riverina peaked at 1.7 M tonnes, but the long-term outlook, given \nclimate change impacts on that region and government water buy-backs, is more likely to be less \nthan 800,000 tonnes. Growers are highly efficient water users by international standards, but the \nability to offset an anticipated reduction in water availability through further efficiency gains is \nlimited. In recent years growers in the Riverina have diversified their farms to a greater extent and \nsecondary production systems include beef, sheep and wheat. \nProduction in north Queensland is in its infancy, but a potentially suitable farming system has been \ndeveloped by including rice within the sugarcane system without competition and in fact contributing \nto the production of sugar by increasing yields and controlling weeds. \nThe economic outcomes are estimated a large scale, dynamic, computable general \nequilibrium (CGE) model of the world economy (Tasman Global), scaled down to regional \nlevel. CGE models mimic the workings of the economy through a system of interdependent \nbehavioural and accounting equations which are linked to an input-output database. When \nan economic shock or change is applied to a model, each of the markets adjusts according \nto the set of behavioural parameters which are underpinned by economic theory. \nIn this study the model is driven by reducing production in the Riverina in accordance with \nrelationships found between water availability and the production of rice and replacement by other \ncrops and by increasing ride production in the Burdekin. Three scenarios were considered: \n• Scenario 1: Rice is grown using the fallow period between the last ratoon crop of sugarcane \nand the new planting. In this scenario there is no competition between rice and sugarcane \n• Scenario 2: Rice displaces sugarcane production \n• Scenario 3: Rice is grown on additional land and does not compete with sugarcane. \nTwo time periods were used, 2030 and 2070, which are the conventional time points to consider \nclimate change impacts. Under scenario 1, real economic output declines in the Riverina by $45 \nmillion in 2030 and by $139 million in 2070. This is only partially offset by the increased real \neconomic output in the Burdekin of $35 million and $131 million respectively.
Authors: Geoff Cockfield, Shahbaz Mushtaq, Neil White
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1569598847