Previous chapters have discussed the effectiveness of the approach of Water Use efficiency (WUE) programs to increase water productivity and drive changed irrigation practices. The efficacy of the administration of WUE programs has also been examined. This chapter considers how further gains for the environment and improvements for water efficiencies may be achieved.
Critical to the long term achievement of WUE programs is sustainable levels of environmental water flows, and in-ground and river water health. WUE programs target how water is used and the quantity of water used for irrigation, in order to maintain or increase levels of water available to the environment.
Improving water levels for the environment and the productivity of that environmental water is a vital objective. However, in the context of this inquiry, the Committee is mindful that consideration of environmental flows is broader than the focus of this inquiry on WUE programs in the irrigated agriculture sector. At the time of referring the inquiry, the Minister for Agriculture and Resources, the Hon. Barnaby Joyce MP, noted that the House of Representatives Standing Committee on Environment and Energy would be conducting an inquiry into the management of Commonwealth environmental water resources and therefore the Minister suggested that this Committee ‘may wish to limit its consideration of environmental flows in order to avoid duplication’.
Accordingly, the first section of this chapter provides a summary review of evidence received regarding environmental flows and complementary measures, and also notes concurrent work being conducted in this field.
The second part of this chapter considers how further improvements to WUE can be driven in the agricultural sector through ongoing research and addressing impediments to implementation, such as energy pricing and improved meteorological forecasting.
Improving environmental flows and river health
In addition to promoting agricultural water productivity through WUE programs, improvements to environmental outcomes can also be sought through making better use of this water. The range of activities to improve environmental water productivity is referred to as ‘complementary measures’. This section explains how these complementary measures form part of the Australian Government’s water use efficiency framework.
DAWR defined ‘complementary measures’ as ‘a wide range of non-flow related measures that are focused on delivering environmental outcomes’ and gave examples such as ‘the installation of fishways, fish diversion screens, release of the carp herpes virus, works to address cold water pollution and riparian management activities and habitat restoration’.
The Sustainable Rural Water Use and Infrastructure Program (SRWUIP) provides funding for several environmental programs, including the installation of low flow devices, salinity management, water level management and riverine management.
More broadly, DAWR noted that the Murray-Darling Basin Authority (MDBA) has an Environmental Watering Plan for the Basin:
The plan is an environmental management framework that sets out key components of environmental watering management, and principles and methods to be applied in environmental watering. Environmental watering is coordinated to achieve the maximum benefit through Southern Connected Environmental Watering Committee (SCBEWC), an organisation of state and Commonwealth bodies with interests in environmental watering.
We note that supply measure projects under the Sustainable Diversion Limit Adjustment Mechanism (SDLAM) will enable more efficient use of environmental water to reduce water recovery from consumptive purposes while achieving equivalent environmental outcomes. Supply measures may include environmental works such as installation of levee banks, changes in river operations and evaporative savings through storage systems. More efficient use of environmental water allows for higher sustainable diversion limits and hence a reduction in the environmental water recovery target.
As DAWR explained, there is ongoing commitment at an intergovernmental level to facilitating these measures:
Murray-Darling Basin water ministers have agreed that complementary measures can provide real environmental benefits and have sought advice from officials on how to better embed complementary measures as an element of Basin Plan implementation. Ministers are regularly updated as this work progresses. Basin water ministers have also made an in-principle commitment, subject to funding availability, to the implementation of a comprehensive suite of complementary measures and other projects (collectively known as ‘toolkit’ measures) that target improved water management and environmental outcomes across the northern Basin in support of the outcomes of the MDBA’s Northern Basin Review.
As part of the MDBA’s Northern Basin Review, the MDBA developed a ‘toolkit’ of complementary measures intended to improve water management in the northern basin.
This toolkit will require commitments from the Australian, Queensland and New South Wales governments. The MDBA suggests that these measures will be a ‘means of reducing the social and economic implications of the Basin Plan while also providing opportunities for improved water management to enhance the use of environmental water’.
The aim of the toolkit measures proposed by the MDBA is to ‘help achieve river health with less water’ and includes:
protection of environmental flows,
undertaking targeted recovery of water,
a range of event-based mechanisms (including one-off temporary water trade, options over water pumping, and store and release mechanisms),
promoting the coordination and delivery of environmental water,
removing constraints in the Gwydir catchment which prevent flows from reaching the Gwydir wetland, and
targeting environmental works and measures to promote fish movement and habitat in the northern basin, including construction of fishways and control of cold water pollution.
Irrigator groups in particular argued that complementary measures, and more broadly the more efficient use of water allocated for environmental use, should remain a high priority for governments.
The National Irrigators’ Council (NIC) advocated for increased attention to non-flow efficiency measures, including carp control, management of cold water pollution, improved fish migration measures and increased capacity for the Commonwealth Environmental Water Holder (CEWH) to trade water. The NIC argued that the implementation of such measures:
… to achieve environmental outcomes (rather than the recovery of more water entitlement) and proper measurement of long term environmental outcomes, is critical to the sustainability of communities throughout the Murray-Darling Basin. This will optimise every opportunity to deliver real environmental outcomes.
Cotton Australia, for instance, argued that ‘much more can be done for the river environment by adopting other measures than simply water acquisition’, and suggested that complementary measures ‘would leverage significant environmental outcomes without the need for further water acquisitions’.
Therefore, Cotton Australia argued that the focus should be ‘on the implementation of complementary measures rather than further water recovery’.
Cotton Australia suggested the following complementary measures:
‘mitigating the effect of cold water pollution from headwater storages, improving fish passage, controlling feral animals in riparian and wetland areas, removing carp from our waterways, and properly managing significant wetlands’.
The National Farmers’ Federation (NFF) recommended that the Government ‘explore to the full extent possible non-flow complementary measures’ to improve outcomes from environmental water. The NFF noted the ‘significant investment that has been made in procuring water entitlements for environmental water holders, and the ongoing costs associated with holding them’, and argued that ‘prudent and efficient management must be a focus’.
The NFF went on to suggest that:
[b]etter outcomes can be achieved if ‘non-flow’ issues such as addressing cold water pollution and fish passage, controlling feral animals in key wetland and floodplain areas, and tackling carp infestations. Improving land management in valued ecosystems is also important.
The NFF criticised the proposed MDBA toolkit of complementary measures as ‘narrow in focus’, and noted that ‘realistic alternatives to achieve environmental outcomes remain largely unexplored’. Expanding on this, Ms Knowles of the NFF stated:
There are six measures in that toolkit in total. We thought that there was potential for it to be broader to address issues like carp control and cold water pollution, particularly in something like the Gwydir River, for example. If you've ever swum downstream of Copeton Dam—I wouldn't advise it!—it's pretty cold to expect native fish to be able to breed in that environment. The Environmental Water Holder holds significant parcels of water in that system. For that to be most effective, addressing something like cold water pollution in Copeton Dam is really critical to achieving native fish outcomes in that part of the world. That's why we were somewhat disappointed with the MDBA's recommendation around the toolkit, because there was potential for it to have gone further than what it did.
The NFF acknowledged that monitoring efficiency of water usage is still a ‘relatively new endeavour for Governments, and continuous improvement has been a focus for agencies such as the Commonwealth Environmental Water Holder, and state based equivalent entities’.
However, the NFF argued, ‘continued concerted effort is required to ensure that we make the most of the water that has been recovered from production for the benefit of the environment’.
Smartrivers asserted that infrastructure projects to improve environmental water efficiency were just as important as those to support irrigation water efficiency:
The environmental water belonging to the Environmental Water Holder is just as precious as the entitlements held by irrigators. Therefore, it is not unreasonable to spend money on infrastructure that will increase the efficacy of environmental water. This could include infrastructure that enables access to private storages to store and release environmental water and mechanisms to divert environmental water to where it will have the most environmental benefit.
Alongside irrigators, other experts drew attention to the importance of efficient management of environmental water allocations. Dr Adamson stated:
You can treat the environment exactly the same as an irrigation problem. We've got certain wetlands there that always require water, and that makes them like a perennial crop. We've got other wetlands that require a watering every now and then, so they become like an annual crop. When you understand the portfolio of entitlements you have by region, you'll work out, roughly, your water supply and the variability across different times: in droughts and in wet states. When you know what the environmental objectives are by those regions, you can work out if can we actually water these things correctly.
When you start doing this you can then start asking those lovely questions associated with trade. Can we make this system more efficient? Can we trade between the environment and farmers to get maximum benefits?
The Committee supports the evidence that complementary measures to improve the efficient use of environmental water allocations are an important element in the overall management of environmental outcomes. Given the scale of government investment in water efficiency projects and purchases, the Committee considers it of the utmost importance that this water is used efficiently to achieve its purpose of maintaining the environment.
The Committee also notes and endorses recent work in the area by other bodies, such as the Productivity Commission and the CSIRO. The Committee draws attention to the extensive set of draft recommendations and findings in regards to environmental management made by the Productivity Commission in their September 2017 draft report, and in particular:
Productivity Commission Draft Recommendation 5.1
Australian, State and Territory Government should ensure that their policy frameworks provide for the efficient and effective use of environmental water to maximise environmental outcomes and, where possible provide additional community outcomes relating to water quality, Indigenous values, recreation and economic benefit …
Productivity Commission Draft Recommendation 5.6
Australian, State and Territory Governments should improve monitoring, evaluation, auditing and reporting to demonstrate the benefit of allocating water to the environment, build public trust in its management, keep managers accountable and make better use of environmental water over time …
The Committee also notes the CSIRO report released 2 November 2017 on complementary measures. This report provided a scoping study on the assessment of complementary water measures in the Murray-Darling Basin. While its focus was on that region, the application is broader and it provides a valuable addition to holistic environmental water management.
The Committee notes the work that has been undertaken in this area, and also the further inquiry reviews that are anticipated. The Committee encourages the DAWR to take note of the evidence summarised here, and reiterates the importance of considering complementary measures in achieving long-term sustainability and productivity of environmental water.
The Committee will continue to monitor the outcomes of these reviews.
Improving the development and implementation of irrigation efficiencies
Achieving more water efficient irrigation frequently requires implementing more advanced technologies and techniques. These can include pressurised or sub-surface irrigation systems, lateral move or centre-pivot irrigation systems, or may simply involve refinements to existing irrigation techniques that will save water.
Given the unpredictable and drying Australian climate, the irrigation sector increasingly relies on producing more with less water, and the development and deployment of cutting-edge irrigation technologies is critical to that endeavour. This section will outline the evidence the Committee has received on the state of irrigation research and development, and will discuss some of the factors that can slow the adoption of more water efficient irrigation technology.
Box 5.1: Australian Cotton Research Institute, NSW
On 6 April 2017 the Committee conducted site inspections at the Australian Cotton Research Institute (ACRI) located between Narrabri and Wee Waw, NSW. ACRI is jointly operated by the New South Wales Department of Primary Industries (NSW-DPI) and the CSIRO. The Committee heard that staff at ACRI conduct research to improve cotton production in Australia through the development of advanced strains of cotton and the development of better agronomic practices.
The Committee's visit to ACRI highlighted the benefits of collaborative and integrated research, development and extension. The Committee was briefed on industry, government and academic cooperation to develop new and better strains of cotton, improve yield, water productivity, and fibre quality, and to develop and promote better technologies and agronomic practices.
Committee members heard how effective this research and development work has been for the Australian cotton industry. Australia's cotton farmers consistently achieve world-leading yields and have improved their WUE by more than 40 per cent in the last 15 years.
Research on water efficiency technologies
DAWR told the Committee that it is satisfied with the level of research and development work being undertaken in the irrigation space. Its submission referred to the National Water Use in Agriculture Research, Development and Extension Strategy, a project developed under COAG’s National Primary Industry Industries Research, Development and Extension (RD&E) Framework. The framework aims to ‘encourage greater collaboration and promote continuous improvement in the investment of research, development and extension resources nationally.’ In relation to WUE, the strategy’s aim is to:
… more effectively deliver research, development and extension outcomes for irrigated and rain fed agricultural industries seeking to maximise water productivity, adapt to decreasing water availability, and increase the capability of water managers and users to help transform the way that water is used in agriculture.
The Department argued that WUE research and development is well provided for under existing arrangements, and that there is a good degree of collaboration to ensure that innovation in the area is shared between stakeholders. Ms Mary Colreavy from the Department said:
There is a high level of cooperation already existing between relevant people from those different institutions, especially when they are focused on pieces of research that are similar or have related aspects. There are many cross-cutting committees and wards across government where we come together and share updates on where things are happening.
Mr Malcolm Thompson from DAWR noted that a key part of the Government’s RD&E policy settings is that they permit irrigators and industries to set their own research agenda:
… the government's science and technology and research priorities are driven through the policies that we have through rural research, development and extension priorities, and they include soil and water ... I don't think we, certainly in the department, would feel that we are stage managing all of that research and development … That allows the R&D corps, which are typically commodity based, as I said, to get on and have the growers and the farm sector help set their priorities.
Asked about the possibility of re-establishing a Cooperative Research Centre devoted to irrigation, Mr Thompson warned that it ran the risk of being lost in an already crowded field:
...a CRC would be another entity in a very wide landscape of entities that are involved. I don't think any of those other entities that I have talked to, whether it is CSIRO, the Bureau of Met or the R&D corps, would cede their authority to a new CRC ... I am not sure that it would be a decisive step in trying to coordinate them.
Similarly, Mr Phillip Glyde, Chief Executive of the MDBA, told the Committee that he was encouraged by the RD&E work being undertaken in the WUE field via the research and development corporation model:
The thing I have taken some comfort from is the existing research development corporation structure. That is an ongoing enduring thing, as you would probably be aware, funded in part by the government and in part by levies on the farmers—or, in this case, irrigators. I would observe that cotton RDCs and Dairy Australia—all of that structure—are looking at every possible way they can maintain their profitability and find efficiency gains ... what we can observe is there is a lot of work going into water use efficiency right through that whole enduring RDC complex. We are certainly encouraged by that.
The irrigation industry was also satisfied with the current level of irrigation RD&E. Industry groups noted in their submissions that the irrigation industry has worked hard in recent years to improve water use efficiencies, and continues to do so. Ms Jacqueline Knowles from the NFF explained that current gains in water efficiencies are a result of previous research and development investments made by industry and governments:
… investments that we've made in water use efficiency, whether it's about crop varieties, or farming systems, or technologies on farm, or sensors in fields, or technologies that reduce evaporation from storages—whatever it is—a lot of that has come from those past investments in CRC. The opportunity for governments to recover water through water use efficiency was really taking the opportunity that that R&D had created and provided. We'd like to see a continued bipartisan commitment to that rural research and development model. It's one that we cherish and that has delivered huge successes both for the ag sector and for the Australian economy more broadly.
The NFF submission noted that past and present industry investment (often in partnership with government) continues to drive improvements:
While the agriculture sector has invested significantly in recent decades to drive improved water use efficiency, the Australian industry continues to strive to better. Under the Government’s Rural R&D for Profit Program, the Commonwealth, in partnership with 6 Research and Development partners and 19 farmer irrigation technology learning sites are aiming to improve the profit of 3,000 cotton, dairy, rice and sugar irrigators by $20,000 - 40,000 per annum by improving water productivity, efficiency and farmer profitability by 10- 20% ... The project will focus on:
Practical, reliable irrigation scheduling technologies,
Precise, low cost automated control systems for a range of irrigation systems,
A network of farmer managed learning sites located in major regions referred to as “optimised irrigation” farms.
Box 5.2: ‘Keytah’ farm, NSW
On 6 April 2017 the Committee travelled to 'Keytah', a large cotton farm near Moree in NSW. The property is owned by the Sundown Pastoral Company. The Committee met with Keytah's General Farm Manager and staff from the Gwydir Valley Irrigators Association (GVIA) who facilitated the visit.
The Committee conducted inspections of Keytah's cropping operations and was briefed on WUE research conducted at Keytah between 2009 and 2016 as part of the Grower Led Irrigation System Comparison Research project led by GVIA. The project trialled various methods of growing cotton in order to determine their relative advantages and disadvantages.
The research conducted at Keytah compared traditional furrow siphon irrigation methods with more advanced bankless channel, lateral move, and subsurface drip irrigation systems. It found that while the more advanced lateral move and drip systems could reduce labour costs and provide increased yield per hectare and per megalitre, these gains were offset by increased capital and operating costs (particularly electricity). GVIA concluded that, overall, bankless channel systems provided the best overall balance, combining WUE and yield improvements with lower labour, energy, maintenance, and capital costs.
The Keytah site inspection once again raised the issue of increased operating costs - particularly electricity costs - and highlighted some of the impediments to the adoption of more water efficient technologies.
The National Irrigators’ Council also referred to the contribution that the irrigation industry makes, and has made, to gains in water use efficiency innovations:
Australian farmers have always been innovators; they have looked for solutions when faced with tough climatic conditions. Irrigators are no exception and over recent decades have overcome sometimes inefficient historical designs of irrigation districts to become more efficient. Those substantial efficiency improvements have been both Government and self-funded. Irrigators have embraced research and development and taken advantage of technological change and broadened their knowledge to improve their bottom line, while at the same time increasing their water use efficiency.
Further, the cotton and rice industries noted the substantial improvements their industries have made in recent years to water use efficiency developments. Ms Rachel Kelly from the Rice Growers’ Association (RGA) told the Committee that:
They [ricegrowers] are constantly striving for efficiencies in their water use on their crops. The efficiencies are generally achieved through irrigation practices but also through research and development. In particular, the rice breeding program and irrigation efficiency use is the key objective of the rice industry's R&D program. In addition to the On-farm Irrigation Efficiency Program and the PIIOP—Private Irrigation Infrastructure Operators Program—there has been much private investment in irrigation efficiency across our valleys and for our membership. It is important that this is recognised because people are doing that off their own back.
The Cotton Australia submission stated that the industry has ‘increased its WUE by 40 per cent in the decade leading up to 2012’ through a combination of better technology, management expertise and improved varieties. The Gwydir Valley Irrigators Association similarly highlighted cotton research conducted at the ‘Keytah’ property to the west of Moree in NSW which has sought to compare different cotton cropping systems to assess their strengths and weaknesses. The testing is part of the Smarter Irrigation for Profit program, which arises from National Water Use in Agriculture Research, Development and Extension Strategy.
While extensive research and development was noted across many sectors, some inquiry participants indicated that there are also gaps in Australia's land and water research program. Much of the research mentioned above focusses on shorter term gains and on the deployment of existing technologies.
Evidence to the inquiry from academic sources indicated that there are substantial gaps in our understanding of Australia’s water systems, and that it is simply unknown how our current WUE policies are affecting those systems, highlighting the need for more research. Professor Edward ‘Snow’ Barlow from the Australian Academy of Technological Sciences and Engineering (ATSE) told the Committee that:
… from the academy's point of view, in terms of the basic hydrological system that we're playing with here—and irrigation is just one part of that hydrological system—we need to establish what are the actual impacts of irrigation water use efficiency programs on the surface and groundwater systems and the agricultural ecosystems that depend on them.
Likewise, Professor Lin Crase told the Committee that regulators do not measure water use sufficiently well in Australia, and that this undermines the operation of the national water market:
The simple fact is ... that, if you look at what we've done with water accounting in this country, you see we've done a very poor job of counting where it goes ... largely we don't account for a lot of water that leaks ... We just don't measure this thing very well.
…markets only work well to the extent that governments are able to validate the resources that are exchanged. What I'm suggesting to you is we're not doing as good a job as we might in measuring some of those resources.
Professor Barlow explained that information-based measurement is critical to the management of Australia’s water resources, and there is room for improvement in this regard:
Where we are a bit poor at present is the infrastructure to actually do it on a basin scale to know what every stream is doing, what every irrigation channel is doing, and what the water loss characteristics and the crop uses have been. We'll get there, but that's in the big sense. So I'm saying that there are strong opportunities to use technology effectively to measure our water use and its effectiveness coming forward. It will take time, but we need to have the regulatory authorities in possession of this information ... It has to be an information-based management rather than a finger in the wind.
Box 5.3: Darling Downs, QLD
On 5 April 2017 the Committee conducted site inspections in Toowoomba, Queensland. The Darling Downs is one of Australia’s leading agricultural regions, generating approximately 25 per cent of Queensland’s annual agricultural production, and irrigated agriculture - primarily cotton and horticulture - is prominent in the Central Downs. Toowoomba is home to the National Centre for Engineering in Agriculture (NCEA), located at the University of Southern Queensland. Staff from the NCEA accompanied Committee members on site visits to properties in the Toowoomba region.
The Committee's inspections focused on the technology under development by NCEA staff and irrigators in the area. The Committee visited a cotton farm at Yargullen, west of Toowoomba and heard about the design and testing of centre pivot irrigation systems, field sensors, soil and crop models, and the development of autonomous irrigation systems. These kinds of technologies have the potential to greatly improve irrigation efficiency, and new data gathering and analysis tools can help inform decision-making. Smarter, more autonomous irrigation systems can provide time and labour savings of great value to irrigators, as well as providing opportunities for greater precision in the application of water and fertilisers.
The Committee also appreciated the opportunity to visit the NCEA campus in Toowoomba and thanks NCEA staff for taking the time to brief members on their work.
In terms of the structure of Australia’s RD&E institutions, Professor Guy Roth indicated that there is a stop-start quality to Australia’s research efforts that has prevented Australia from being a true world leader in WUE technologies:
… we have had a CRC that did its time and finished, and we lost momentum. Eventually we had the National Program for Sustainable Irrigation, and that finished. The Rural R&D for Profit program, the Smarter Irrigation for Profit project, finishes in the middle of next year; it may get another year, but we do not know. We always seem to be doing this, and I think there is great potential to, if we want to be, be real world leaders in this sort of technology.
Professor Roth argued that the distributed nature of the organisations contributing to Australia’s irrigation research made collaboration more difficult, in spite of the participants’ best efforts:
If you look at how agricultural research is done in Australia, it is largely done by departments of primary industries, or whatever they are called in each state, the CSIRO and the universities, and public organisations as well. They are fiercely independent. They do try to collaborate, but that is easier said than done.
Similarly, Professor Barlow told the Committee that:
… there are 15 commodity-based rural industry R&D corporations at present; they are all commodity-based. There was another, which was Land and Water Australia, which was disbanded probably seven or eight years ago. That had responsibility for soil and water. Soil and water are the basis of all those systems. So I think government does have a role in coordinating this ... there is a gap there that hasn't been adequately filled by the individual corporations. You can see that. The cotton guys or the beef guys would say, 'Why do we need to fund all of the water research?' There needs to be someone who does that.
Professor Roth also argued that WUE research in Australia is negatively impacted by the absence of an overarching or coordinating organisation which has a longer-term focus:
There are a lot of things on the agenda with water use efficiency: the Murray-Darling Basin Plan, environmental buybacks, the irrigation modernisation programs, there used to be a national groundwater research strategy, and there used to be an urban water research strategy. But there is not the longer term. There is the national RD&E strategy, but it is not resourced long term. ... having a longer term approach to it would use government resources more efficiently.
Ongoing improvements to irrigation efficiencies are vital – while there is scope to innovate and develop, progress should not be impeded by gaps in research or a lack of shared knowledge. The Committee was impressed by the breadth of RD&E work being undertaken across Australia and the investments being made by irrigators and industry groups. The drive to innovate was also demonstrated time and again to the Committee during its inspections around Australia. Some of the highlights of these demonstrations are described in Text Boxes through this report.
However, while current irrigation techniques research and innovation is substantive, the Committee notes the importance of coordinating this research and notes that there are some gaps in research areas. Demonstration and dissemination of new research technologies is also critical to drive uptake and implementation.
Given the vital importance of gaining water efficiencies, and the substantial investment undertaken in WUE programs, the Committee considers there is a clear role for a coordinating research body to develop technologies, drive future innovations, disseminate information and assist in the uptake and implementation of new technologies. This would provide an important longer term focus and ensure continuing water use efficiencies across the sector.
The Committee recommends that the Australian Government establish and provide seed funding for a coordinating Research, Development and Extension (RD&E) body to work with the agriculture sector in order to:
Accelerate the adoption of existing cutting-edge irrigation technologies, and
Promote innovation and the development of new water efficiency technologies.
Impediments to efficiencies
Evidence to the inquiry highlighted two issues which are currently impeding water use efficiencies. The first issue relates to electricity pricing and the prohibitive cost of accessing alternative energy sources. Farmers are obliged to make commercial decisions that will ensure the financial viability of their enterprises. At times, new irrigation technologies may deliver water savings, but the associated energy costs may be prohibitive.
The second issue relates to access to accurate meteorological long-range weather and rainfall forecasting. Accurate forecasting enables farmers to utilise water irrigation only when this is required. While most areas are well serviced, the Committee received evidence that there are gaps in some areas which severely impact farmers’ capacity to irrigate efficiently.
Agricultural businesses are necessarily focused on financial viability, and any increase to operating costs is rightly viewed with concern. In many instances, the operation of WUE technologies may reduce water usage and so the price paid for water, however energy operating costs may increase to levels which make the implementation of water efficient technologies uneconomic.
In relation to the adoption of WUE technologies, several submitters noted that farmers must decide whether or not to invest in upgrades based on overall business profitability. In this context, the efficient use of water is only one factor among many. As the Gwydir Valley Irrigators Association noted:
To present a balanced perspective of irrigation and water use efficiency in Australian agriculture, consideration must be given to all the production parameters; soil, crop, and climate, the reliability of the irrigation water resource, the cost to establish infrastructure and to the resources of labour and energy, as well as the key driver for many growers, productivity or yield.
Similarly, Professor Guy Roth explained:
It is not all about water. For example there are complex interactions between water, energy, labour, nutrient use, crop agronomy, soils, salinity and the water balance that need to be better understood.
Many submitters noted that adopting more water efficient technologies involved trade-offs, primarily associated with higher energy costs. Cotton Australia called this the ‘water/energy nexus’:
Farmers are changing to alternative irrigation systems such as centre pivots and lateral move systems and it is expected there will be an increasing number of these machines in the future. These systems can achieve labour savings and with some soil types, water savings (about 30 percent), but have significantly higher energy costs associated with water pumping and machine operation.
Mr Peter Smith reiterated the difficulties of water efficiency versus energy costs:
An improvement in irrigation efficiency can often be achieved by adopting a form of pressurised irrigation. The problems are that the increased operating costs may prejudice the viability of the farm business and that the manufacture and operation of pressurised systems is more energy intensive than surface irrigation systems. The result may therefore be improved water use efficiency but decreased energy use efficiency and perhaps decreased profitability of the irrigated enterprise.
The NIC also noted the connection between water use efficiencies and energy, arguing that governments have failed to take rising power prices into account when designing programs:
Water efficiency in irrigation is often achieved by piping irrigation networks and pressurising delivery, ideally regulated using smart, automated control systems. Operating such systems, however, entails far higher energy usage that flood and other gravity based systems. State and federal governments have invested billions in water efficiency programs without addressing the energy part of the equation.
This concern was reiterated by Mr Steve Whan, NIC Chief Executive Officer, who explained the severe impact energy prices can have on irrigators:
... electricity prices are a real problem for many of our producers. I met an almond farmer in the Riverland in South Australia a few weeks ago whose electricity bill had increased by $87,000 in a single year. It was $325,000 prior to that; $87,000 on top of that. Fortunately for him at the moment, the price of almonds is really good. So he is coping with that. But if you have a product where the market or the terms of trade have turned against you a bit, or one where the margins are not so good—for instance the dairy industry—then that is a real problem.
Ms Jacqueline Knowles from the NFF told the Committee that high energy prices have led farmers to make regressive choices in terms of how much water they use:
… what we've seen over recent years is that, with escalating power prices, farmers are either reverting to not using the water use efficiency technology, which is power hungry, or they're leaving the grid and dusting off diesel generators. That's not good for anyone, but that's been the most cost-effective way for them to continue to run their pumps and their irrigation systems.
Growcom, representing the Queensland horticulture industry, argued that high energy prices put pressure on profitability and reduced capacity of enterprises to invest for the future:
Water itself is not a large cost input for most irrigators even though without it most farms cease to operate. For intensive horticulture production systems energy to pump water is currently the main driver for the uptake of water use efficiency and alternative energy sources. As the cost of energy steadily continues to increase over the next few years ... irrigators will find it more difficult to objectively irrigate. As market price takers this will place increasing pressure on farm gate returns and further reduce the ability of the horticulture industry to self invest.
Likewise, the Queensland Farmers’ Federation noted the surge in energy prices in recent years, and pointed out its impact on irrigators:
Assessment of electricity bills amongst irrigators has revealed price increases of 300 per cent over the last NSW network determination period (2009–2014). Similar increases have been experienced in Queensland over the same period. The electricity costs cannot be offset as irrigators are price takers in international commodity markets with no ability to dictate returns achieved for their products.
... higher energy costs have become a major constraining factor for irrigators to utilise their water efficient irrigation equipment and have caused individual irrigators to be exposed to electricity price volatility and continuous price increases.
Submitters had a number of suggestions to deal with the impact of energy costs on irrigators. The NIC argued that although many organisations are addressing power prices, an agriculture-focused irrigation energy program is necessary to assist irrigators:
We argue that a national irrigation energy productivity program funded by ARENA (Australian Renewable Energy Agency) is needed to develop and incentivise adoption of irrigation systems that optimise both energy and water usage. In addition to increasing energy and broader agricultural productivity, the program would help reduce pressure on national bulk water resources, and in so doing may reduce water allocation conflict in the Murray Darling Basin and other irrigation catchments.
Karen Hutchinson from the NIC argued that a whole-of-government approach is needed, to ensure that relevant technology is not excluded from programs for irrigators:
The point that I would make in terms of the energy-irrigation nexus is the real need for a whole-of-government approach when funding programs of such national significance, like what we have seen with the Basin Plan. As part of the on-farm program, solar, for example, was specifically excluded as an eligible activity, which led farmers to move towards diesel and other things for pumping ... it was because of the government departments that were operating the funding buckets; solar did not fall into the right bucket.
Mr Levy Scheider from Netafim noted that new technologies designed to help irrigators reduce their energy costs were under development, and that other technologies could be also be of assistance:
It is absolutely an issue that is a challenge for us ... What we are doing about it is developing systems that are low flow and low pressure to reduce the pressure, as well as working with pump companies to develop systems that are going to work on solar as well—any other renewable energy, like wind or solar, as well as the storage. At present, storage—and I am thinking about battery storage—is expensive, but it is coming down in big rates.
The Ricegrowers’ Association argued that factors like energy prices should be included in future WUE programs:
… future on-farm efficiency programs should not be focused on a single input/commodity such as water savings. Rather the program should take a broader view and encompass energy and other input savings to ensure that the overall efficiency impact for the business is positive. There are a number of examples where participants have upgraded their infrastructure to achieve water efficiencies however the upgraded infrastructure is significantly more energy intensive.
During site inspections around Australia, the Committee heard numerous times that rising electricity prices are impacting the capacity of farmers to implement more efficient irrigation technologies. In addition, the up-front cost of installing alternative energy sources was considered prohibitively high and so economically unviable – despite the resulting water efficiencies savings from new technologies.
A further issue brought to the Committee’s attention was the reliance on accurate and timely meteorological information, and the impacts on water use efficiency where this information is not available.
The Bureau of Meteorology (BOM)’s submission noted that its:
climate and streamflow forecasting services provide foresight into future water availability and are being used now by irrigation companies and other water managers to assist in planning water allocations and managing supplies.
Similarly, Macquarie River Food and Fibre noted that ‘efficient agricultural industry requires access to timely, relevant and accurate [weather radar] information to fully inform production decisions’.
However, Macquarie River Food and Fibre also observed that there are gaps in coverage:
Improved access to weather radar services is imperative for agricultural producers in central and western NSW who currently operate in a ‘black spot’ with inadequate coverage from existing radar stations at Moree, Gunnedah, Wagga Wagga and Sydney.
They also raised the additional concern that there is ‘confusion with real-time information (provided by the NSW Department of Primary Industries - Water), and river predictions and flood warnings (provided by the Bureau of Meteorology) made available from different sources’.
Energy pricing was a concern consistently raised with the Committee during this inquiry, and it was often cited as an impediment to installing and operating new water efficient technologies. The Committee recognises that this issue has significant influence on irrigators’ adoption of water efficiency measures and considers that improvements to water use efficiency cannot be fully achieved without addressing energy pricing.
The Committee notes that energy pricing concerns relate to electricity costs and also the installation cost of alternative energy sources. While addressing these issues is beyond the scope of this inquiry, the Committee considers it essential that further work is undertaken. There may be scope for WUE programs to include within their funding scope the installation of alternative energy sources where these power efficient technologies. The Committee recommends that the Government further investigate the impact of energy pricing on the implementation of water use efficient technologies, and develop a range of mechanisms to address these impediments.
The Committee recommends that the Australian Government investigate mechanisms to address factors such as the rising cost of electricity and cost of alternative energies which may act as impediments to the adoption of water use efficiency technologies in irrigated agriculture.
The Committee suggests that this research be conducted by the Research, Development and Extension (RD&E) body set out in Recommendation 4.
Accurate and timely weather forecasting is vital for irrigators to ensure the efficient use of water. The value of efficient technologies and investment in new infrastructure is severely depleted if there is not access to coordinated weather radar forecasting and event information across all areas.
The Committees notes that the expansion of BOM services will require some supplementary Government expenditure, however this expenditure will maximise the value gained from investments currently made in WUE programs. Further, the Committee recommends that the BOM work with State government agencies and service providers to ensure more coordinated event information is available to farmers and irrigators.
The Committee recommends that the Bureau of Meteorology make additions to its weather radar services to ensure up to date forecasting and coordinated information is available in all required irrigated areas.