Just add water | Deloitte Australia | Consumer Business, Agribusiness has been added to your bookmarks.
Just add water – the irrigation revolution in Tasmania
The Tasmanian irrigation revolution has the potential to establish the state as the most reliable source of high quality food and fibre in a continent challenged by climate change.
The Agribusiness Bulletin
The Agribusiness Bulletin focuses on national and local industry, as well as cross-industry insights and trends. This includes some of the drivers we expect to shape the future of the industry and potential challenges that may arise.
Receive the Agribusiness Bulletin
Just add water – the irrigation revolution in Tasmania
Endowed with a Mediterranean maritime climate, Tasmania is already regarded as one of Australia’s prime food bowls. With the Tasmanian climate gradually warming, its range of potential food produce has grown.
So climate change brings the potential for diversification and intensification of agriculture in Tasmania, provided it can minimise the impacts of drought. Yes Tasmania does have droughts.
While Tasmania represents just one per cent of Australia’s landmass, it does receive about 13 per cent of the nation’s rainfall run-off, however receiving and storing water are two different issues. That has been the responsibility of a state-owned company set up for the purpose, Tasmanian Irrigation Pty Ltd (TI). Of the 15 schemes, eight have been completed since 2011, two are currently under construction and five are soon to be constructed and should be operational by the end of 2016.
The public/private partnership between farmers and the two layers of government, the design of the schemes to match irrigator demand and the ability of farmers and investors to trade water rights have been the key to this infrastructure success. The formula is becoming a template for other countries, notably New Zealand.
If one adds the data from the three irrigation schemes that existed in Tasmania before TI started its work to the data from the 15 new schemes, this irrigation revolution in Tasmania will be storing and distributing about 160 gigalitres of water across almost 250,000 hectares of arable land.
But that does not tell the whole story. The flagship project is the $104 million Midlands Water Scheme (MWS), the largest built in Tasmania. It utilises a 137-km pipeline and delivers up to 38,500 mega litres of water a year to 55,484 hectares of irrigable land, the most familiar farmland in the state since it borders the main highway between Hobart and Launceston.
“The MWS transforms farming down the spine of Tasmania,” TI chief executive Chris Oldfield said. “It services farms between Campbell Town in the northern midlands and Kempton in the southern midlands. Traditional production here has been in poppies, cereals, canola, pasture seeds, lucerne, potatoes and pasture for livestock finishing. This scheme brings the potential for dairy conversions and perennial horticulture. That is revolutionary.”The scheme is complex, running through a remote and challenging landscape, from the central highland lakes to the sometimes-arid plains of the Tasmanian midlands. Their low rainfall produced the nation’s most prized superfine merino fleeces but excluded intensive cropping and dairying.
The scheme’s natural 600-metre fall from the highlands has allowed a 6.5 megawatt power station to be installed to supply hydroelectricity to drive the scheme and enough surplus to put into the state grid to power about 5000 homes.
So the scheme provides water and electricity and it transforms dry, sheep country into an intensive farming landscape.
The total economic benefit of irrigation to Tasmania is difficult to calculate and easy to exaggerate. However, just the second tranche of five schemes is expected to produce a combined economic NPV (net present value) at farm gate of $100 million, according to economic consultants Marsden Jacob Associates, and to have a flow-on economic effect of up to an additional $200 million, that is, an economic multiplier of three. If the multiplier of three is applied to the $1 billion for all schemes then we are talking about a $3 billion impact in Tasmania.
The Tasmanian irrigation metamorphosis is unique. The irrigation revolution has the potential to establish the state as the most reliable source of high quality food and fibre in a continent challenged by climate change.
The Tasmanian farming landscape is undergoing a transformation. It's changing; it’s becoming greener. There are more cows in the paddocks than ever before; there are more paddocks carrying cows than ever before. Pivot irrigators, once a rarity, are commonplace and getting longer; there are poppies wherever you look. We now produce some of Australia’s best Shiraz (yes in 2011 a Jimmy Watson Memorial Trophy came to Tasmania), as well as our hallmark cool climate pinot noirs; and it is no coincidence that, with all of this, our water birds are thriving.
Jan Davis, former CEO of Tasmanian Farmers and Graziers Association, said, “The task that Tasmanian farmers have set themselves is to increase their productive value five-fold by the year 2050. It will mean our farms will contribute $10 billion a year to the overall economy, $10 billion a year towards Australia’s food security and the growing world demand for commodities. Irrigation will play a large part in Tasmania being able to achieve that.”