Economic analysis of irrigated agriculture development options
A new desktop study has identified the viability of growing a range of irrigated fodder and horticulture crops, and associated value-added developments in the Pilbara.
The Economic analysis of irrigated agriculture development options for the Pilbara was commissioned by the Department of Agriculture and Food WA (DAFWA), as part of the $12.5 million Pilbara Hinterland Agricultural Development Initiative (PHADI).
The report modelled a number of crop production scenarios, staged development and value-added options, to compare returns over a 30 year timeframe.
Lucerne hay, Rhodes grass hay, cotton, peanuts and sweet potatoes showed positive returns based on a $10,000 per hectare development cost.
While value-added canning tomatoes achieved a positive return, the cost of vegetable processing was greater than any additional benefit.
The report also indicated that a 10,000 head feedlot of cattle trucked to Perth could yield a positive scenario, while a biofuel plant based on 800 hectares of sorghum broke even at $1.18 per litre.
DAFWA Economist and PHADI team member, Brad Plunkett, said the level of development cost was a critical factor in assessing a crop’s potential economic viability.
"A staged approach to irrigated development was preferable," he said.
“The expansion of fodder crops in the immediate term, which complement the existing pastoral industry, is a good model of initial development."
"As soil and water resource bases are established and production systems are refined, additional opportunities can be pursued, such as those suggested by the DAFWA's recently released Growing the North report."
To create viable, long term business opportunities further attention needs to be paid to infrastructure needs, and linking production to market and investment opportunities in fast-growing, high-value markets.
The report provides an overview of the break-even cost for a range of irrigated crops, including fodder (grain and hay), fibre (cotton), human food (pulses, peanuts, tomatoes and capsicums) and industrial use (sorghum for biofuels), as well the minimum scale required for selected developments to be viable.
The information from the report will be integrated into new analytical tools, currently under construction, to assist irrigated agricultural development in the Pilbara, and address the site-specific nature of development opportunities.
The PHADI team are working with project partners to ground truth the report’s yield assumptions, and will be integrated into the project’s prefeasibility study on the potential for irrigated agriculture development in the Pilbara which will be published at the completion of the PHADI project in 2017.