What future for Riverina irrigation communities?Craig Clifton, Dhakshy Sooriyakumaran, Nick Schofield & Stephen Joyce

Project overviewObjective: Assist Riverina irrigation communities plan for a

future with less waterThree stages:1. Current socio-economic

status of region & influence of recent change

2. Assess risks and opportunities associated with the future

3. Plan for sustainable communities and economy

Project overviewStage 2: What may the future hold for Riverina irrigation

communities?Three stages:1. Current socio-economic

status of region & influence of recent change

2. Assess risks and opportunities associated with the future

3. Plan for sustainable communities and economy

• Identify key trends & drivers of change

• Develop scenarios to describe how the future may unfold

• Assess future risks and opportunities

Riverina: a major Australian agricultural, food & beverage production region

Dryland cropping

Livestock grazing

Production Processing

Cereals $355 M $197 M

Rice $121 M

Vegetables $67 M

Fruit $199 M $127 M

Citrus $75 M

Wine grapes $110 M $400 M

Livestock

Livestock $210 M

Meat $319 M

Total $840 M $1041 MSources: ABS data; AEC 2010

Sources: BRS data; SKM 2010

Irrigation

The community & economy are highly dependent on agriculture

Employment Economic value add

Economic value add

AgricultureFood & beverage manufacturingWaterServices to agricultureOther

Carrathool

Griffith

Sources: ABS data; AEC 2010; SKM, 2010

Employment (#EFT)Carrathool

Griffith

Economic value addCarrathool

Griffith

Key trends: the Big Dry

0%

20%

40%

60%

80%

100%

2000/01 2002/03 2004/05 2006/07 2008/09

Lachlan River HS Lachlan River GS

Murrumbidgee River HS Murrumbidgee River GS

Rainfall anomaly Irrigation allocations

Sources: BoM data, NSW Office of Water data; SKM 2010

2001-2003 2004-2006

2007-2009

Key trends: agriculture & food production

$-

$50

$100

$150

$200

$250

$300

$350

2000-01 2005-06

Carathool

$-

$50

$100

$150

$200

$250

$300

$350

2000-01 2005-06

Griffith

$-

$200

$400

$600

$800

$1,000

2000-01 2005-06

Val

ue o

f agr

icult

ural

com

mod

ities M

illio

ns

$-

$50

$100

$150

$200

$250

$300

$350

2000-01 2005-06

Griffith

Intensive animal

Dryland

Nurseries

Irrig-fruit

Irrig-vegetables

Irrig-crops

Sources: ABS data, AEC 2010; SKM 2010

Industry Change in value of output ($M)

Sheep -$10.4 Grains -$112.6 Beef cattle -$5.9 Other agriculture +$0.1 Services to agriculture +$3.5 Milling products & cereal foods

-$98.3

Citrus, grapes & other fruit No changeWine & other beverages No changeTotal -$223.6

Change in value of production 2005-06 to 2009-10 due to drought

20,000

30,000

40,000

50,000

2,000

4,000

6,000

8,000

1990 1995 2000 2005 2010

Key trends: population & employment

Region

Griffith

Narrandera

Carrathool

The Big Dry

0 5000 10000 15000 20000 25000

1996

2001

2006Agriculture

Manufacturing

Retail trade

Health services

Education

Construction

All others

EmploymentPopulation

Employment losses 2005-06 to 2009-10• Agriculture – 588 jobs• Other sectors (direct/indirect) – 1231

jobs

Drivers of changeInternational-global scale State-MDB-national scale Local-regional scale

Climate:• Natural variability• Human-induced change

Health of global economy• Demand & price for food,

fibre & minerals• Currency exchange rates• Cost of key agricultural

inputs• Trade freedom/distortion

Global population growth Global food supply &

security Technology:• ICT• Food production• Energy

Water:• Catchment inflows &

storage volumes• Planning & management• Infrastructure• Policy, politics & public

perceptions• Market operation

Population growth in major cities• Congestion• Housing affordability

Strength of Australian mining sector

Interest rates Government investment

into regions ICT infrastructure &

services

Confidence in region’s future

Entrepreneurial spirit – community leadership

Technological & management innovation in key industries

Regional development investment

Retention & attraction of population

Drivers of changeInternational-global scale State-MDB-national scale Local-regional scale

Climate:• Natural variability• Human-induced change

Health of global economy• Demand & price for food,

fibre & minerals• Currency exchange rates• Cost of key agricultural

inputs• Trade freedom/distortion

Global population growth Global food supply &

security Technology:• ICT• Food production• Energy

Water:• Catchment inflows &

storage volumes• Planning & management• Infrastructure• Policy, politics & public

perceptions• Market operation

Population growth in major cities• Congestion• Housing affordability

Strength of Australian mining sector

Interest rates Government investment

into regions ICT infrastructure &

services

Confidence in region’s future

Entrepreneurial spirit – community leadership

Technological & management innovation in key industries

Regional development investment

Retention & attraction of population

What might the future hold? Some alternative futures

Scenarios incorporate:• Critical uncertainties – climate & water

policy• Other regional-global scale change

drivers• ShocksPlausibility tested with stakeholders

2010 2030

Better water outcomes

Worse water outcomes

Rejuvenated Riverina

Resilient Riverina

Ruinous Riverina

Scenarios preceded Guide to MDBP

Risks and opportunitiesKey risks• A quick step back into Big Dry –

like conditions• Run-away water trade from

region• MDBP implements large

reduction in SDL

Key opportunities• Adapted, more efficient agriculture• Increase regional value add to

agriculture• Biofuels & solar energy• Education, training & health care• Affordability options for new

industries and residents• Tourism

Options mostly not unique to Riverina region

Potential implications:• Rapid population decline• Workforce contraction• Divestment by businesses• Smaller local governments

become unviable

Conclusions: What future for Riverina irrigation communities?

• The region will remain highly dependent on agriculture, including irrigated agriculture

• High reliability Murrumbidgee high security water & groundwater critical to region’s future

• The region will continue to track agriculture’s fortunes and misfortunes

• Griffith will continue to growth while the smaller towns & LGAs continue to decline

• The region will continue to invest in economic diversification - with limited success particularly away from Griffith & Leeton

What future for Riverina irrigation communities?

Some critical uncertainties:• Murray-Darling Basin Plan• Future climate – next few years & long-term• The demand & price for the region’s agricultural & food

products • Confidence in the region’s future• Community leadership & entrepreneurial spirit

A future with less water is not where the Riverina irrigation communities want to be