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1.Name
Jon-Maree Baker
2.Organisation
Namoi Water
3.Address
PO BOX 548 NARRABRI NSW 2390
4.Email
5.Stakeholder Group
Aboriginal/cultural heritageCommunity memberEnvironmentFishing/recreation▶ Irrigator/commercialLocal government/utilitiesLocal landholderState/Australian GovernmentOther
6.Please specify
7.Water Sharing Plan
Adelong Creek Water SourceAlstonville Plateau Groundwater SourcesApsley River Water SourceCastlereagh River above Binnaway Water SourceCommissioners Waters Water SourceCoopers Creek Water SourceDorrigo Plateau Surface Water Source and Dorrigo Basalt Groundwater SourceGwydir Regulated River Water SourceHunter Regulated River Water SourceJilliby Jilliby Creek Water SourceKangaroo River Water SourceKaruah River Water SourceKulnura Mangrove Mountain Groundwater SourcesLachlan Regulated River Water SourceMacquarie and Cudgegong Regulated Rivers Water SourceMandagery Creek Water SourceMurrumbidgee Regulated River Water SourceNew South Wales Murray and Lower Darling Regulated Rivers Water SourcesOurimbah Creek Water SourcePhillips Creek, Mooki River, Quirindi Creek and Warrah Creek Water SourcesRocky Creek, Cobbadah, Upper Horton and Lower Horton Water SourcesStuarts Point Groundwater SourceTarcutta Creek Water SourceTenterfield Creek Water SourceTomago Tomaree Stockton Groundwater SourcesToorumbee Creek Water SourceUpper Billabong Water Source
All Topics
Upper Brunswick River Water Source▶ Upper Namoi and Lower Namoi Regulated River Water SourcesWadella Creek Water SourceWybong Creek Water SourceMore than one relevant plan
8.Please specify all relevant plans
9.Submission to the Natural Resources Commission
10.Submission to the Office of Water
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Submission to Natural Resources CommissionSubmission to Office of Water▶ Submission to both Natural Resources Commission and Office of Water
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15.Please upload file to the Office of Water
16.Please upload second file to the Office of Water
17.Please upload third file to the Office of Water
18.Please upload file to both the Natural Resources Commission andOffice of Water
http://engage.haveyoursay.nsw.gov.au/survey_tool/download_file/61132 (fileattached).
19.Please upload second file to both the Natural Resources Commissionand Office of Water
http://engage.haveyoursay.nsw.gov.au/survey_tool/download_file/61137 (fileattached).
20.Please upload third file to both the Natural Resources Commission andOffice of Water
21.Submissions relevant to the NRC's review will be made publiclyavailable on the NRC's website. If you wish to have your submission keptconfidential, please check this box.
Supporting Sustainable Water Use in the Namoi Catchment
Namoi Water
Submission to National Resources Commission and NSW Office of Water
Namoi Regulated Water Source Water Sharing Plan
February 2013
Namoi Water
Chairman : Jono Phelps
Executive Officer : Jon‐Maree Baker
PO Box 548 Narrabri NSW 2390
PH: 02 67925222 FX: 02 67925225 MB: 0488 925222
EM : [email protected] WEB: www.namoiwater.com.au
P2 Namoi Water Submission to NSW Office Water : Draft Water Sharing Plan for the Namoi Regulated Water Sources 20.1.2013
Introduction
Namoi Water is the peak industry group for irrigated agriculture in the Peel, Upper Namoi and
Lower Namoi Valleys in the North West of NSW. We are a non‐profit, non‐political organisation
supporting our members to achieve a sustainable irrigation industry that meets the
environmental, economic and social needs of our local communities. Namoi Water makes this
submission on behalf of our membership collectively, however each member reserves the right
to independent view and submission on any issues they deem relevant.
We welcome the opportunity to provide comment to the review by the National Resources
Commission and NSW Office of Water on the Namoi Regulated Water Sharing plan. The release
of the final Regulated Water Sharing plan in 2004 was extremely disappointing for water access
licence holders who had invested enormous time, effort and financial resources in the water
reform process over a lengthy period of time to see Ministerial changes made without
consultation. We seek this review process as an opportunity to highlight the impacts of these
changes and to bring about a more relevant WSP supported by the community.
We seek replacement of the Namoi Regulated Water Sharing plan on the basis of the review
criteria, we suggest there are a number of issues that need to be address and have listed those
of highest priority in our submission. In particular wording changes made to the final plan that
did not reflect agreement reached by the river management committee resulted in significant
socio‐economic impacts. There are a number of rules that could be rewritten to improve
implementation, understanding and for simplicity of management.
As part of the review process we seek an update to the State Water Management Outcomes
Plan which is now well overdue for its 5 year review and update. The SWOMP sets the over‐
arching policy context, targets and strategic outcomes for the development, conservation,
management and control of the State’s water sources. In developing the 2004 Namoi Regulated
Water Sharing Plan the SWOMP targets were included to provide a benchmark as to the valleys
performance in sustainable water resource management. Regardless of the decision to either
replace or extend the water sharing plans now due to expire, an update of the SWOMP is
urgently overdue.
P3 Namoi Water Submission to NSW Office Water : Draft Water Sharing Plan for the Namoi Regulated Water Sources 20.1.2013
Assessments of socio‐economic impacts in the Namoi have been undertaken by Deloites Access
Economics a copy of the final report “The Value of Water to the Namoi Catchment” is attached
to this submission. The report combines three models (1) a water and landuse model of the
Namoi Catchment; (2) a Computable General Equilibrium (CGE) model with the Namoi
Catchment as a discrete region in the global economy and 3) a community level disaggregation
resilience model. Whilst the purpose of the scenarios run for this report is to assess a drier
climate scenario and the MDBA Basin Plan, the model can be rerun using scenarios to show the
impact of the Water Sharing Plan in removing water from productive use via rule changes and
reduced access.
The accountability of environmental water provisions in the plan remains a key issue for water
access licence holders, with monitoring and reporting on the linkage between flow provisions
and environmental water requirements being sought. We refer to the National Water
Commission plan assessment as at 23rd January 2012 which highlights a number of issues for
consideration in particular the monitoring of plan effectiveness is not consistently reported in
publicly available documents. Whilst some reports are available at this time including the Fish
assemblages and spawning in the northern Murray Darling Basin, of which we noted the
concluding statement that there is little evidence that spawning and recruitment of fish is
related to river hydrology in the Namoi. Water users have long supported the management of
invasive pest species that contribute significantly to the decline of river health.
The department has two reports publicly available, the Environmental flow response and socio
economic monitoring 2009 progress report and WSP Upper and Lower Namoi regulated rivers
progress report 2004‐2009. The Integrated Monitoring and Environmental Flows scientific
program to assess ecological benefits has not resulted in publicly available information that we
have been able to access. As per the above reports there has not been provision made to
directly evaluate the minimum daily end‐of‐system flows required under clause 15, Namoi
Water seeks review of this provision as to its environmental benefit for improved ecosystem
function.
P4 Namoi Water Submission to NSW Office Water : Draft Water Sharing Plan for the Namoi Regulated Water Sources 20.1.2013
Key Issues
Water Year:
The change to move the water year to a financial year end was agreed to by the River
Management committee on the basis that 150% be available for use in any one year. This was
subsequently changed to 125% being available in any one year and 300% over 3 years without
agreement by the committee. The Namoi Irrigation area is predominantly focused on summer
cropping program. The bulk of irrigation ends in April, with the current water year irrigators
will pump unused allocation into storage, it causes regulated water to be used rather than held
in the most efficient storage at headwater dam, it results in reduction of low flow periods and
results in unnecessary losses. The 1 October to 30 September water year allows water users to
more efficiently manage their water allocations as at the 30th September they know their
allocation and planting areas can be better planned.
Accounting Rules :
Account limit rules for general security access licences have account limits set that were not
agreed to by the River Management committee, these rules can and have been an inhibitor to
trade. It was agreed that collectively account limits should not total more than 200%, however
the WSP rule was written in the context of the individual account limits could not be more than
200% or in the account of High Security water 100%. This subtle difference has impacted on
trade, whereas the policy at the time of the WSP and through NWI principles is to promote
trade so that water is available for transfer to the highest value use.
Supplementary Access: Trigger points used for accessing supplementary events are being
restricted by the interpretation of using volumetric and time for calculating access to the event
where it should just be based on the volumetric calculation. Namoi Water also requests that
supplementary licences be granted in perpetuity.
P5 Namoi Water Submission to NSW Office Water : Draft Water Sharing Plan for the Namoi Regulated Water Sources 20.1.2013
Supplementary Access Trigger Heights :
The trigger heights for supplementary access need to be reviewed, in particular the relevance
of the Narrabri gauge to the lower section of the river and tributary contributions from the
below this point. An example of the relevance of trigger points is the Lower Pian previously
had a trigger of 50 meg at Dundee or 20 meg at Waminda, if there were flows that weren’t
regulated orders shared access was granted for the lower end of the system. Burren creek runs
in as a tributary feeder as such can cause supplementary flow which is not able to be accessed
as the trigger at Narrabri is not relevant.
90:10 Rule :
This rule is in place to limit supplementary access to 10% of a declared flow in the period 1st July
till 31st October (4 months). The purpose of this clause, which was included in the Minister’s
plan as an alteration to the community based draft plan, has never been clarified to those
impacted by the plan. We believe the public interest will be well served in repealing subsection
(11) (a) and extending subsection (11) (b) to all twelve calendar months. The interests of
downstream users and the environment are well protected by the other clauses in section 49 of
the water sharing plan.
Section 49 subsection (11) (a) clearly has a negative economic impacts in the Namoi. Other
clauses in section 49 protect downstream users and Namoi supports these measures, we seek
review of the operation and impacts of subsection (11) (a) the so called 90 / 10 rule. We are
currently running a scenario through the Namoi Socio‐Economic Model to provide full detail on
the broader impacts of this rule on the valley. We seek full IQQM analysis of the scenario of
50/50 during the past 10 years to show the impact of potential supplementary access during
this time on environmental flow.
P6 Namoi Water Submission to NSW Office Water : Draft Water Sharing Plan for the Namoi Regulated Water Sources 20.1.2013
End of System Flow :
The insertion of the end of system flow was at the request of the Nature conservation council
as a state wide requirement to meet 95 percentile flows in all rivers. The Namoi plan comments
by stating that this flow is too unusual to model, yet this flow now occurs annually in the
Namoi. The flow has no stated environmental outcome and does not represent good natural
resource management.
There has as yet to be examination of low flow requirements in the Namoi nor have key
indicators been benchmarked. This request was made by Namoi Water at the beginning of the
Water Sharing Plan implementation to assess the above and other planned environmental
water flow benefits for the system and to understand what could be considered best practice
for natural resource management in the Namoi River system. We request review of the end of
system flow requirement and evidence of linkages to the improved environmental outcomes
that result from this plan rule.
Flood Plain Harvesting :
Floodplain Harvesting is being addressed through separate policy process and licencing and
validation is being undertaken now across the northern valleys. Relevant to the WSP the issue
of CAP is crucial to the licensing of floodplain access licence being conducted in a fair and
reasonable manner that reflects the intent of the Water Sharing Plan for the Upper Namoi and
Lower Namoi Regulated River Water Sources 2004.
As per previous meetings with NSW Office of Water there is agreement that the Namoi
regulated plan makes no specific recognition of the floodplain activity and we request as a
matter of review of the water sharing plan that schedule F be updated to include validated
floodplain licensing in the Namoi in addition to the current CAP.
P7 Namoi Water Submission to NSW Office Water : Draft Water Sharing Plan for the Namoi Regulated Water Sources 20.1.2013
Gunidgera Pian System :
The previous plan stated that during the life of the plan, extraction components should be
amended in accordance with the mandatory conditions on the access licences. It further stated
that the Minister should take into account the water distribution arrangements existing prior to
the commencement of the Plan and any other relevant matters. This matter is still unresolved
and in the review of this plan this issue must be addressed in full consultation with water users
impacted. Capacity constraints are an ongoing issue in this system.
North West Unregulated Flow Plan :
The policy to manage extractions from unregulated flows in the Darling Basin for the purpose of
maintaining supply to Broken Hill was implemented in the previous decade. The impact of this
was the restriction or prohibition of extractions from unregulated flow anywhere in the basin
specifically for the water supply for Broken Hill. Extractions were managed until there was
sufficient water in storage to guarantee supply for a period of 21 months. The impact of this
was the banning of extractions on several occasions until the storages recovered to the extent
that Broken Hill’s supply was considered secure. Restrictions were imposed and the policy
managed access in the Namoi Valley to unregulated flows. The Namoi is still subject to the
provisions of the North West Flow Plan via the regulated Water Sharing Plan. We seek review
of these rules to coincide with alternative solutions to the long term supply of reliable water
resource for the community of Broken Hill.
P8 Namoi Water Submission to NSW Office Water : Draft Water Sharing Plan for the Namoi Regulated Water Sources 20.1.2013
Conclusion:
The review of the Namoi Regulated Water Sharing Plan at this time is essential, water users
have waited 10 years to have addressed the many varied and clearly inefficient functions of the
plan as a result of the re‐wording and changes made post community approved plan. The
process of review must have the same functionality as the previous process which includes
open and transparent discussions with all stakeholders, we seek representation on the
Interagency Regional Panels for water users and environmental representatives as a matter of
priority and due process.
As we move forward to the 2019 implementation date of the Murray Darling Basin Plan we
have clearly supported how NSW and the subsequent departments responsible for water have
progressed water reform in partnership with communities and water users. It would be
disappointing after the dismal failure of the federal process and recent state unregulated water
sharing plan process to see this repeated. There is adjustment required to the engagement
and final approval process that is planned for these water sharing plans.
Namoi Water looks forward to working with the NSW Government to review the water sharing
plans and improve the water resource management to ensure a sustainable future for our
communities.
The value of water to
Namoi Catchment
Namoi Councils
31 May 2012
The value of water to Namoi Catchment
Liability limited by a scheme approved under Professional Standards Legislation.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network
of member firms, each of which is a legally separate and independent entity.
Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and
its member firms.
© 2011 Deloitte Access Economics Pty Ltd
Contents Glossary ...........................................................................................................................................i
Executive Summary.........................................................................................................................i
1 Forecast drier future........................................................................................................... 1
2 Scenarios............................................................................................................................. 8
2.1 Rainfall only............................................................................................................................ 8
2.2 Climate change .................................................................................................................... 10
2.3 Policy only ............................................................................................................................ 12
2.4 Comparison of scenarios...................................................................................................... 15
2.5 Sensitivity analysis ............................................................................................................... 16
Limitation of our work..................................................................................................................... 18
Charts Chart 1.1 : Impacts on agricultural output.................................................................................... 3
Chart 1.2 : Flow on impacts to other industries............................................................................ 4
Chart 2.1 : Impact on agricultural production – rainfall only scenario ......................................... 9
Chart 2.2 : Impact on agricultural production – climate change scenario.................................. 11
Chart 2.3 : Impact on agricultural production – policy scenario................................................. 13
Chart 2.4 : Impact on value of agriculture from policy scenario – Wee Waa ............................. 15
Chart 2.5 : Impact on value of agriculture from policy scenario – Moonbi ................................ 15
Chart 2.6 : Real GRP impacts, compared to BAU ........................................................................ 16
Tables Table 1.1 : Forecast drier future water assumptions.................................................................... 1
Table 1.2 : Scenario results ........................................................................................................... 2
Table 1.3 : Impact on the value of output at the town level – forecast drier future.................... 7
Table 2.1 : Water assumptions of rainfall only scenario............................................................... 8
Table 2.2 : Results from rainfall only scenario .............................................................................. 9
Table 2.3 : Impact on agricultural production at the town level – rainfall only scenario ........... 10
Table 2.4 : Water assumptions of climate change scenario ....................................................... 10
Table 2.5 : Results from climate change scenario....................................................................... 11
Deloitte Access Economics Commercial-in-confidence
Table 2.6 : Impact on agricultural production at the town level – climate change scenario...... 12
Table 2.7 : Water assumptions of policy only scenario............................................................... 12
Table 2.8 : Results from policy only scenario.............................................................................. 13
Table 2.9 : Impact on agricultural production at the town level – policy scenario..................... 14
Table 2.10 : Water assumptions of sensitivity one ..................................................................... 16
Table 2.11 : Water assumptions of sensitivity two ..................................................................... 16
Table 2.12 : Sensitivity analysis ................................................................................................... 17
The value of water to Namoi Catchment
Liability limited by a scheme approved under Professional Standards Legislation.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its
network of member firms, each of which is a legally separate and independent entity.
Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited
and its member firms.
© 2011 Deloitte Access Economics Pty Ltd
Glossary Business as usual (BAU) – a scenario of ‘normal’ development, where the variable of
interest (in this case water) does not change from some pre-determined concept of normal
(such as no deviation from the present, or from long term averages). It is against this
scenario that other modelled scenarios are compared, with the difference in outcomes
referred to as an ‘impact’,
Computable General Equilibrium (CGE) – a modelling framework built on an established
body of economic theory in which accounting identities used by statistical agencies
(including the Australian Bureau of Statistics) are explicitly met, and where the actions of
any agent in the economy (for example, changes to government taxation policy) has either
direct or indirect flow on impacts to all other agents.
DAE-RGEM – Deloitte Access Economic regional CGE model.
Employment – The number of Full Time Equivalent (FTE) jobs in a region or sector.
GDP/GSP/GRP -– Gross Domestic Product, Gross State Product or Gross Regional Product
respectively - a commonly used measure of economic activity. One method for constructing
this measure is to take the sum of all value-add that occurs within the region of interest.
Government expenditure – in the same way that households consume goods and services,
the government in each region also consumes goods and services for the purpose of
supplying public goods through government expenditure. Within DAE-RGEM the
government sector represents a combination of all the levels of government from local
council to federal government.
Household/representative household – Most CGE models (including DAE-RGEM) use a
single household agent/unit in the model to represent the total activity of all households in
a region – a so-called representative household. In each year the representative household
earns income which is allocated in part to consumption of goods and services (for example,
accommodation services and food products), and in part to savings which are then used for
investment in capital goods.
Investment – Investment in the model refers to the creation of new physical capital, either
to replace old depreciated capital (for example, an old computer replaced by a new
computer) or to increase the total capital stock (for example, to increase the number of
computers in a business).
Labour supply – The count of the employed and the unemployed (but available for work)
population.
Real Wages – the wages received by employees adjusted for inflation.
Deloitte Access Economics Commercial-in-confidence
Terms of Trade – a commonly used ratio measuring the difference between the price of a
region’s exports and the price of a region’s imports.
Value Added – the difference between the value of product sold in an industry and the
value of the intermediate inputs (that is, goods and services used for production) in an
industry. For example, if a factory purchases $10 of ingredients and produces $15 worth of
bread, the value added in providing the product is $5. Value added is distributed across
payments to the factors of production including labour, capital and land.
i
Commercial-in-Confidence Deloitte Access Economics
Executive Summary This report presents the results of Deloitte Access Economics’ modelling of the economic
impacts of a drier future on the Namoi economy. The impacts of a drier future have been
modelled using three integrated models: (1) a water and landuse model of the Namoi
Catchment; (2) a Computable General Equilibrium (CGE) model with the Namoi Catchment
as a discrete region in the global economy and 3) a community level disaggregation
resilience model.
The water and landuse model determines the agricultural landuse and eventual agricultural
output of the Namoi Catchment under different water availability scenarios. Taking this
agricultural production data as an input, the CGE model estimates the effects of each water
availability scenario on the whole economy of the catchment, including the main economic
indicators of gross regional product (GRP), employment and wages. The community model
then disaggregates the catchment level results to the individual communities based on
their land and water use and industry profiles.
The following discussion presents the high level modelling results from several drier future
scenarios for the Namoi Catchment.
The value of water assessment reflects the combined outputs of the three models, when
used to model the effects of declining water availability in the Namoi Catchment. Key
results of this process are as follows:
• The best estimate water availability scenario is based on the proposed Murray Darling
Basin Plan, where rainfall is 0.4% lower by 2030 and there is 13.1% less water available
for irrigated agriculture (based on changes in allocations and entitlements). This
scenario leads to an average annual decline in agricultural production of $23.6 million
(in 2010 prices) by 2030, or 2% of the total value of agricultural production in the
Namoi Catchment.
• The losses are primarily experienced in irrigated agriculture (especially cotton) rather
than dryland agriculture. In the scenario, irrigated agriculture is affected by both
climate change (and its resulting effects on reduced allocations) and reduced
entitlements whereas dryland agriculture only experiences the impacts of reduced
rainfall from climate change.
• Overall, gross regional product in the catchment falls by $38 million, representing a fall
of 0.4%, and the economy supports almost 70 less jobs on a full time equivalent (FTE)
basis.
• For every additional dollar of agricultural production– of which approximately 60 cents
is value-added – Namoi’s GRP overall grows by $1.36. This is a value-added multiplier of
approximately 2.3. This means that, of the total value added to the economy of water
use in agriculture, 40% of it is realised in agriculture. The flow on effects of reduced
water availability is experienced across the wider economy, most notably in food
processing and construction.
• Of the two likely causes of reduced water in the future – climate change and the Basin
Plan – Namoi’s economy is more vulnerable to those relating to the Basin Plan, at least
out until 2030. Of course, any climate change is likely to continue to develop beyond
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Commercial-in-Confidence Deloitte Access Economics
2030, in a way that is not modelled here. Similarly, the values associated with
environmental improvements from the Basin Plan are not modelled here.
• A scenario where climate change acts alone, without a policy based reduction in
entitlements, the losses are more modest. In this scenario, (with a 0.4% reduction in
rainfall and a 5% reduction in water allocations by 2030) agricultural production falls by
$5.2 million or 0.7%, while GRP falls by $12 million, or 0.1%. These losses are
experienced in both dryland and irrigated agriculture.
• A scenario where the only change is a reduction in irrigation entitlements of 8.5%, as a
consequence of the Basin Plan, leads to an $8.2 million or 1.1% loss in the value of
agricultural production and a loss in GRP of 22.1 million (0.2%). In this scenario, all
losses are experienced in irrigated agriculture. In fact, there is a slight gain to dryland
agricultural values, as more land is converted from irrigation to dryland.
• Far more economically destructive to the catchment than forecast climate change or
the Basin Plan would be a longer term continuation of the climatic conditions
experienced during the recent drought.
• The value of water – be it a millimetre of rainfall or a ML of irrigation water – varies
depending on how much water is already being used. At the margin (defined by long
term average conditions of 350 GL of water used and average catchment wide rainfall
of 578 mm), the following marginal values of water are observed:
• For each mm of rainfall lost to dryland agriculture, the size of the regional
economy declines by $519,000. (This is the value of rainfall to dryland
agriculture.) The link between rainfall and runoff, and hence allocations and
irrigated water use, ensures rainfall is even more valuable than this.
• For each ML of irrigation water lost the size of Namoi’s economy declines by
approximately $750.
• The value of water, and hence the impacts of less water, are not experienced uniformly
throughout the catchment. At a community level, the towns expected to be
proportionally hardest hit are either those that are most heavily dependent upon
irrigated agriculture (Wee Waa and Walgett), and/or lack the characteristics that allow
a community to be resilient to negative external change (Wee Waa, Walgett, Baradine
and Quirindi).
• Scenarios to adapt to this drier future have not been modelled here. Rather, the
modelling capacity to explore a wide range of adaptation responses has been provided
to Namoi Councils to assist in planning responses.
Deloitte Access Economics
The value of water to Namoi Catchment
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Commercial-in-Confidence Deloitte Access Economics
1 Forecast drier future Over the coming decades the Namoi Catchment’s economy is expected to be impacted by
both the effects of climate change and a reduction in irrigation entitlements held in the
region as a result of the Murray Darling Basin Plan. This section outlines the findings of
modelling on the economic impact on the region of the proposed Murray Darling Basin Plan
water buyback scenario.
Base case, or business as usual (BAU)
To model the impacts of a drier future, it is first necessary to develop a comparison ‘no
change’ world, against which the drier future scenario can be compared. This so called
‘Base Case’ scenario, models the future of the region without any changes to water
availability. In effect, this is a ‘business as usual’ water availability future for the Namoi
Catchment, where the climate does not change from long term averages and where there is
no reduction in entitlements out of the region. In other words, the volume of irrigated
water use does not decline. The economic outcomes of the water availability scenario are
then compared to the Base Case, with the differences called the ‘impact’ of less water.
Key assumptions of the historical baseline climate scenario for the Namoi Catchment are
summarised below:
• Average annual historical rainfall for the Namoi Catchment is 578 mm.
• The average variability in rainfall between years (coefficient of variation) is 27%.
• Average annual general security water allocations of 69% of total volume entitlement.
Forecast drier future scenario assumptions
The following assumptions were made in estimating the key water availability parameters
for the scenario:
Table 1.1: Forecast drier future water assumptions
Long term average 2019 2030Average annual rainfall mm 578 -0.2% -0.4%Average water extraction allocation volume 69% -2.5% -5.0%Total water extraction entitlements ML 497,000 -8.5% -8.5%Overall impacts on extractive water availability -10.8% -13.1%
Projections
Results
The impacts of reduced water from climate change and the purchase of an additional 2,750
GL/year for the environment on the key variables of the Namoi Catchment economy are
provided in Table 1.2.
By 2030, the value of agricultural production is modelled to decline by 2%, representing lost
agricultural production value of $23.6 million.
The value of water to Namoi Catchment
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Commercial-in-Confidence Deloitte Access Economics
After including the flow-on effects to the rest of Namoi’s economy, the reduction in water
availability resulting from the proposed Murray Darling Basin Plan causes a 0.4% decline in
real GRP, or a loss of $38.0 million from the regional economy. This reduction in production
corresponds to a decline in employment of approximately 60 full time employees in the
region, under normal labour market conditions.
The overall economic impacts of a drier future, especially the employment impacts, are
highly sensitive to assumptions around key labour market assumptions, particularly the
ability and willingness of workers of the Namoi Catchment to exit the labour force when
opportunities decline relative to elsewhere. The results identified above reflect a Namoi
labour market responding in a manner that has been calibrated on trends observed during
the recent drought. Impacts reported here will be magnified should the population
become more mobile than it was during the drought, and more people leave the region in
pursuit of relatively better economic opportunities elsewhere.
Table 1.2: Scenario results
Impact – compared to BAU 2020 2030
Value of agricultural production ($A,2010 prices) -$19.5 million -$23.6 million
Real GRP - % Change -0.4 -0.4
Employment - % Change -0.1 -0.1
Household cons - % Change -0.3 -0.3
Investment - % Change -0.4 -0.2
Govt. Exp - % Change -0.3 -0.3
Exports - % Change -1.0 -1.2
Imports - % Change -0.3 -0.3
Terms of Trade - % Change 0.2 0.3
Real wages - % Change -0.1 -0.1
Real GRP ($A, 2010 prices) -$26.0 million -$38.0 million
Real HH cons ($A, 2010 prices) -$12.1 million -$19.0 million
Employment (FTE) -49 -59
The higher relative fall in water allocation and entitlement volumes (than rainfall) sees
irrigated agriculture experiencing proportionately more of the impacts than dryland
agriculture. This is because, in the scenario, irrigated agriculture experiences the effects of
climate change (and its resulting effects on reduced allocations) and from reduced
entitlements, whereas dryland agriculture only experiences the impacts of reduced rainfall
from climate change. The relative effect of rainfall, climate change and policy on dryland
and irrigated agriculture is explored more in the next section.
The combination of reduced yields and land use substitutions sees the value of production
from cotton decline at an average annual rate of 8.7% by 2030 (compared to business as
usual). Falls in the value of production are also seen in other irrigation dependent
commodities such as vegetables (down 1.4%) and other fruits (down 2.0%).
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Chart 1.1: Impacts on agricultural output
-10.00 -8.00 -6.00 -4.00 -2.00 0.00 2.00
Other Cereals
Cotton
Other Broadacre
Livestock Dairy
Other Livestock
Vegetables
Grapes
Other Fruits
Hay Production
Other Agriculture
2020 2030
% change relative to BAU
The land that otherwise would have been used for irrigated agriculture – primarily cotton –
is transitioned into dryland crops such as other broadacre and other cereals.1 Even though
there is more land being used for dryland agriculture, there are small falls in the overall
value of dryland agriculture, because of the effect of lower yields from reduced rainfall. In
other words, even though the area of dryland agriculture goes up, the yield from that larger
area is lower.
Nevertheless, the higher relative fall in water allocation and entitlement volumes sees
irrigated agriculture experiencing proportionately far more of the impacts than dry land
agriculture. This is particularly true in the first five years, as irrigated agriculture suffers
most initially from the fall in water entitlements form the Basin Plan.
Flowing on from the direct shock to agriculture will be a decline in the value of output from
selected industries that source inputs directly from the local agricultural industry (dairy
products down 0.1% and processed food down 0.2%).
Construction provides a good representation of the general health of the region’s economy
as an increase in investment in physical assets reflects confidence in the local economy. By
2020, construction in the Namoi Catchment is expected to decline by 0.5%; however, as the
economy adjusts to the shock, and excess capital and labour are redeployed, the decline in
the value of construction output is expected to moderate to 0.3%.
Declines in other industries are primarily due to reduced expenditure in the region (from
lower employment and reduced farm incomes). This will be most important to service-
based industries such as finance and insurance, retail trade, recreation and government
services.
1 Refer to previous milestone reports for descriptions of each agricultural sector.
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The rise in manufacturing is likely due to the sector benefitting from the small fall in wages
in the region, as remaining businesses have a labour price advantage over competitors that
they otherwise do not have.
Chart 1.2: Flow on impacts to other industries
-0.5 -0.4 -0.3 -0.2 -0.1 0.0 0.1 0.2
Forestry
Fishing
Meat products
Vegetable oils and fats
Dairy products
Food products nec
Beverages and tob. products
Light Manufacturing
Manufacturing
Electricity
Construction
Trade
Transport
Communications
Finance and Insurance
Other Business Services
Recreation & Other Services
Govt Services
2020 2030
% change relative to BAU
Community level impacts
Table 1.3 provides a summary of the community level impacts of the forecast drier future
scenario. These include:
• the absolute $ impact to agriculture and the rest of the economy;
• the impact to agriculture (rest of economy) in terms of the size of each town’s
agriculture industry (economy);
• the impact to agriculture (rest of economy) in terms of the size of each town’s
agriculture industry (economy) adjusted for the relative vulnerability of each town; and
• the size of the agriculture industry in comparison to the rest of the economy.
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Impacts on agriculture
Across the catchment, Wee Waa, Walgett and Boggabri are expected to experience the
largest impacts to agriculture from the drier future scenario. This is because of two main
reasons:
• the agriculture industry dominates the local economy of these communities; plus
• they are expected to experience the largest decline in the value of agricultural
production (in terms of the size of their agriculture industry), because of the nature of
the irrigated production that occurs there.
For example, under this scenario the value of agricultural production in Wee Waa is
expected to decline by 5.8% (which is the strongest impact on any community in the Namoi
Catchment). This is particularly important given Wee Waa’s agricultural industry comprises
90% of the town’s economy.
Similarly, Boggabri’s agriculture industry represents over 20% of the region’s economy and
the drier future scenario results in a 1% decline in the value of agricultural output in the
community.
Walgett’s agriculture industry accounts for 40% of the community’s economy.
Consequently, the 0.3% decline in the value of agriculture will still result in noticeable
impact on the community’s economy.
There are, however, two notable exceptions to this general trend – Narrabri and Curlewis.
The impact of a 3.8% decline in the value of agriculture in Narrabri will be less significant
than, for example Wee Waa, as agriculture only (directly) accounts for 5.4% of Narrabri’s
economy.
While the agriculture industry accounts for almost 40% of Curlewis’ local economy, the
dominance of dryland agriculture ensures this community’s agriculture industry will fare
relatively well in the forecast drier future scenario.
Impacts on the rest of the economy
The flow-on impacts to the wider economy of reduced water availability are determined by
each town’s industry structure. While a town in the region may not be heavily dependent
on agriculture, it may be reliant on downstream agribusiness – such as food processing,
dairy processing and vegetable oils and fats – or expenditure from farmers in the
catchment more broadly.
Towns in close proximity to Tamworth (Nemingha, Kootingal, Kingswood, Moonbi, Attunga
and Bendemeer) experience declining economic activity despite minimal overall impacts on
their agricultural industries. This is primarily due to their dependence on service-based
industries that rely on total expenditure in the region such as business, recreation and
government services.
This is particularly evident for Tamworth itself. As the business and retail centre of the
Namoi Catchment, Tamworth is expected to experience a relatively larger share of the
decline in downstream industries – such as retail trade, recreation services and government
services – despite the minimal direct impact on the community’s agriculture industry.
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While the size of Narrabri’s agriculture industry is relatively small in comparison to some
communities in the catchment, the local economy is heavily dependent on agribusinesses
such as agriculture related R&D (private and government) enterprises and business services
that directly support agriculture (agronomists, accountants, farm management, livestock
officers, etc). This dependence on farm expenditure will exacerbate the 3.8% decline in the
value of agriculture beyond this one industry.
Vulnerability adjusted impacts
Vulnerability adjusted impacts present the expected community level impacts accounting
for each town’s resilience characteristics such as level of education, mining prospects,
general labour market opportunities, income levels, Indigenous status and distance to large
urban centres (see Appendix A for more details).
Communities with relatively low levels of resilience are expected to experience a larger
share of the impact than the mechanical disaggregation would suggest (as they are unable
to adapt and respond to the shock from less water). Tamworth is the most resilient
community in the catchment while Walgett and Barraba are the least resilient.
The resilient characteristics of Tamworth’s population and economy ensure the community
will experience a smaller impact than expected. In fact, after adjusting for the degree of
vulnerability, Tamworth shifts from being one of the communities most affected by
reduced water availability to a community that experiences a medium impact from reduced
water availability. In contrast, Quirindi is expected to see local economic activity decline by
more than what its industry profile would suggest.
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Table 1.3: Impact on the value of output at the town level – forecast drier future
Impact to ($,000):
Impact as a share of industry/
economy (%)
Impact as a share of industry/ economy, adjusted for relative
vulnerability (%)
Agriculture’s share of
economy (a)
Ag Economy Ag Economy Ag Economy
Attunga (L) -1 -637 -0.01 -0.21 -0.01 -0.20 3.4% Baradine (L) 22 -816 0.27 -0.27 0.27 -0.32 2.8% Barraba 267 -379 0.59 -0.19 0.61 -0.24 22.6% Bendemeer (L) -4 -398 -0.06 -0.19 -0.10 -0.20 3.6% Boggabri (L) -330 -201 -1.06 -0.13 -1.18 -0.17 20.8% Curlewis (L) -14 -356 -0.02 -0.18 -0.02 -0.20 37.5% Gunnedah -600 -3,163 -1.07 -0.20 -0.98 -0.21 3.6% Kingswood (L) 7 -1,542 0.05 -0.22 -0.01 -0.21 2.0% Kootingal 1 -1,204 0.02 -0.22 0.01 -0.21 0.7% Manilla -1 -762 0.00 -0.21 0.00 -0.24 10.8% Moonbi (L) -3 -849 -0.04 -0.23 -0.05 -0.21 2.1% Narrabri -2,379 -2,671 -3.83 -0.23 -3.52 -0.24 5.4% Nemingha (L) 0 -859 2.13 -0.22 2.24 -0.21 0.0% Nundle (L) -1 -331 0.00 -0.22 0.00 -0.24 14.3% Quirindi 8 -1,220 0.01 -0.21 0.01 -0.25 14.3% Tamworth -4 -15,807 -0.03 -0.23 -0.03 -0.22 0.2% Walgett -232 -511 -0.32 -0.28 -0.36 -0.35 39.6% Wee Waa -12,099 -587 -5.83 -0.25 -5.92 -0.30 90.0% Werris Creek 2 -552 0.01 -0.19 0.01 -0.18 5.3%
Note: Ag: agriculture; (a) Agriculture industry’s share of total economic output in each community (based on
mechanical disaggregation); coloured cells represent 5 largest impacts in each column.
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2 Scenarios This section decomposes the forecast drier future scenario into its components, namely:
• rainfall;
• climate change; and
• government policy (proposed Murray Darling Basin Plan).
A comparison of the scenarios is then provided to highlight the relative effect of each
scenario on the Namoi Catchment’s economy. The impact of the proposed Murray Darling
Basin Plan is larger than the other scenarios modelled because it is this scenario that, by far,
represents the biggest cut in water availability to the catchment (8.5% cut in water
available for irrigation). This is despite an increase in production of dryland agriculture.
The next most costly scenario is the water available to the Namoi Catchment under climate
change conditions. This consists of both a reduction in rainfall and a reduction in allocation
rates (with an overall reduction in water available for irrigation of 2.5% by 2019 and 5.0%
by 2030).
Finally, the rainfall only scenario is used to illustrate the decline in the value of agriculture
expected in the region following a 0.2% reduction in average rainfall. This scenario will
predominantly impact dryland agricultural production.
2.1 Rainfall only
The following assumptions were made in estimating the key water availability parameters
for the rainfall only scenario:
Table 2.4: Water assumptions of rainfall only scenario
Long term average 2019 2030Average annual rainfall mm 578 -0.2% -0.4%Average water extraction allocation volume 69% 0.0% 0.0%Total water extraction entitlements ML 497,000 0.0% 0.0%Overall impacts on extractive water availability 0.0% 0.0%
Projections
The impacts of reduced water from rainfall are provided in Table 2.5.
By 2030 the value of agricultural production is modelled to decline by less than 0.03%
which represents a loss in value of $0.9 million.
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Table 2.5: Results from rainfall only scenario
Impact – compared to BAU 2020 2030
Value of irrigated agricultural production ($A, 2010 prices) -$37,000 -$68,000
Value of dryland agricultural production ($A, 2010 prices) -$341,000 -$812,000
Value of total agricultural production ($A, 2010 prices) -$378,000 -$880,000
Real GRP ($A, 2010 prices) -$0.4 million -$1.2 million
The reduction in rainfall will have the greatest impact on dryland agricultural production –
particularly hay, other cereals, other broadacre and other livestock (see Chart 2.3).
However water intensive agricultural industries such as cotton and other fruits will also
experience a decline in the value of production as a result of less water.
Chart 2.3: Impact on agricultural production – rainfall only scenario
-0.25 -0.20 -0.15 -0.10 -0.05 0.00 0.05
Other Cereals
Cotton
Other Broadacre
Livestock Dairy
Other Livestock
Vegetables
Grapes
Other Fruits
Hay Production
Other Agriculture
2020 2030
% change relative to BAU
At the community level the communities most affected by reduced rainfall are those with
sizeable dryland agricultural production: Walgett, Curlewis, Barraba, Werris Creek and
Quirindi.
Wee Waa is expected to experience the largest absolute share of the impact at the
catchment level (approximately $125,000), but this represents less than 0.06% of the value
of agriculture in the community. This decline is primarily driven by Wee Waa’s other
cereals, other livestock and other broadacre sectors. However, the reduced rainfall will
also reduce the value of the region’s cotton production.
Accounting for almost 30% of the catchment’s decline in the value of broadacre production
and 20% of the decline in the value of production in other cereals it is unsurprising that
Walgett is expected to experience the largest impact in terms of the share of total value of
agriculture.
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The $100,000 decline in agricultural production in Quirindi and $110,000 decline in Curlewis
are due to the communities’ other cereals and other livestock sectors. While this is a small
decline, the impact is felt relatively harder in these two communities due to the relatively
small size of their agriculture industry (than, for example, Wee Waa or Boggabri).
The declining value of Werris Creek’s other cereals production accounts for the relatively
stronger impact of reduced rainfall on this town (0.14% decline in the value of agricultural
production).
Table 2.6: Impact on agricultural production at the town level – rainfall only scenario
Impacts Total ($,000) Share of
Agriculture Total (%) Attunga (L) -10 -0.10 Baradine (L) -7 -0.08 Barraba -64 -0.14 Bendemeer (L) -4 -0.05 Boggabri (L) -35 -0.11 Curlewis (L) -112 -0.15 Gunnedah -65 -0.12 Kingswood (L) -15 -0.11 Kootingal -1 -0.03 Manilla -29 -0.07 Moonbi (L) -5 -0.06 Narrabri -37 -0.06 Nemingha (L) 1 6.39 Nundle (L) -15 -0.07 Quirindi -102 -0.12 Tamworth -1 -0.01 Walgett -106 -0.15 Wee Waa -126 -0.06 Werris Creek -22 -0.14
2.2 Climate change
The following assumptions were made in estimating the key water availability parameters
for the climate change scenario:
Table 2.7: Water assumptions of climate change scenario
Long term average 2019 2030Average annual rainfall mm 578 -0.2% -0.4%Average water extraction allocation volume 69% -2.5% -5.0%Total water extraction entitlements ML 497,000Overall impacts on extractive water availability -2.5% -5.0%
Projections
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The impacts of reduced water from climate change are provided in Table 2.8.
By 2030 the value of agricultural production is modelled to decline by approximately 0.7%
which represents a loss in value of $5.2 million.
After including the flow-on effects to the rest of the Namoi Catchment’s economy, the
reduction in water from climate change (rainfall and allocation volumes) results in a 0.1%
decline in real GRP, or a loss of $12.0 million from the regional economy.
Table 2.8: Results from climate change scenario
Impact – compared to BAU 2020 2030
Value of irrigated agricultural production ($A, 2010 prices) -$2.4 million -$4.4 million
Value of dryland agricultural production ($A, 2010 prices) -$0.3 million -$0.7 million
Value of total agricultural production ($A, 2010 prices) -$2.6 million -$5.2 million
Real GRP ($A, 2010 prices) -$5.0 million -$12.0 million
While the rainfall scenario primarily affected dryland cropping and grazing, the climate
change scenario also affects the amount of water available for irrigation through the
reduction in allocation volume. This can be seen in Chart 2.4. Cotton, as the region’s
biggest water user, experiences the largest decline in the value of production but there is
also a decline in production values across some dryland sectors such as other cereals and
other livestock.
Chart 2.4: Impact on agricultural production – climate change scenario
-3.00 -2.50 -2.00 -1.50 -1.00 -0.50 0.00 0.50
Other Cereals
Cotton
Other Broadacre
Livestock Dairy
Other Livestock
Vegetables
Grapes
Other Fruits
Hay Production
Other Agriculture
2020 2030
% change relative to BAU
At the community level, communities with a large proportion of cotton production are the
hardest hit – particularly Wee Waa, Narrabri, Walgett, Gunnedah and Boggabri. Wee Waa
alone accounts for almost 80% of the catchment’s decline in the value of cotton production
under the climate change scenario.
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Walgett, Gunnedah and Boggabri also experience declines in the value of production from
other cereals – these three communities represent over one third of the catchment-wide
decline in other cereals.
Table 2.9: Impact on agricultural production at the town level – climate change scenario
Impacts Total ($,000) Share of
Agriculture Total (%) Attunga (L) -9 -0.09 Baradine (L) -1 -0.01 Barraba 30 0.07 Bendemeer (L) -3 -0.03 Boggabri (L) -98 -0.31 Curlewis (L) -77 -0.10 Gunnedah -208 -0.37 Kingswood (L) -7 -0.05 Kootingal -1 -0.03 Manilla -23 -0.06 Moonbi (L) -4 -0.05 Narrabri -644 -1.04 Nemingha (L) 0 1.64 Nundle (L) -12 -0.05 Quirindi -73 -0.09 Tamworth -4 -0.04 Walgett -140 -0.19 Wee Waa -3,699 -1.78 Werris Creek -14 -0.09
2.3 Policy only
The following assumptions were made in estimating the key water availability parameters
for the policy only scenario:
Table 2.10: Water assumptions of policy only scenario
Long term average 2019 2030Average annual rainfall mm 578 0.0% 0.0%Average water extraction allocation volume 69% 0.0% 0.0%Total water extraction entitlements ML 497,000 -8.5% -8.5%Overall impacts on extractive water availability -8.5% -8.5%
Projections
The policy only scenario represents an 8.5% cut in entitlements in the Namoi Catchment as
a result of the proposed Murray Darling Basin Plan. This scenario shifts production out of
irrigated agriculture and into dryland production as the cost of water increases. However,
the increase in the value of dryland production is insufficient to cover the loss from
irrigated agriculture. As Table 2.11 summarises, the value of agricultural production in the
catchment is expected to decline by $8.2 million by 2030 under this scenario.
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The results also illustrate the responsiveness of the agricultural industry versus the wider
economy to a shock. The largest impact to the agricultural sector is felt soon after the
policy comes into effect (2020), but by 2030 the sector has begun to adjust and the size of
the impact moderates. On the other hand, the wider economy takes time to adjust –
particularly the capital stock – and this is reflected in the larger impact on real GRP in 2030
than 2020.
Table 2.11: Results from policy only scenario
Impact – compared to BAU 2020 2030
Value of irrigated agricultural production ($A, 2010 prices) -$9.0 million -$8.4 million
Value of dryland agricultural production ($A, 2010 prices) $0.2 million $0.2 million
Value of total agricultural production ($A, 2010 prices) -$8.7 million -$8.2 million
Real GRP ($A, 2010 prices) -$18.6 million -$22.1 million
The cut to entitlements affects irrigation-intensive industries such as cotton, vegetables and
fruits. The shift towards dryland cropping is reflected in the increase in other broadacre,
other cereals and hay production.
Chart 2.5: Impact on agricultural production – policy scenario
-6.00 -5.00 -4.00 -3.00 -2.00 -1.00 0.00 1.00 2.00
Other Cereals
Cotton
Other Broadacre
Livestock Dairy
Other Livestock
Vegetables
Grapes
Other Fruits
Hay Production
Other Agriculture
2020 2030
% change relative to BAU
At the community level, irrigation dependent communities such as Wee Waa, Narrabri,
Gunnedah and Boggabri will experience the largest declines in the value of agricultural
production. Within the agricultural industry in these communities, dryland crops and
grazing will increase in production value but not enough to mitigate the decline in irrigated
agriculture.
The policy scenario is expected to result in a 3.5% decline in agricultural production in
Werris Creek and a 2.5% decline in Narrabri.
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Taking advantage of increases in available land and water, dryland dominant communities
such as Barraba, Quirindi and Curlewis will see the value of production improve under the
policy scenario.
While the value of agricultural production in Walgett is expected to decline by 0.1% this
masks the change in landuses within the community – the value of cotton production will
decline by $180,000 but $100,000 of this is offset by increases in the value of other cereals,
other broadacre, hay and other livestock.
Table 2.12: Impact on agricultural production at the town level – policy scenario
Impacts Total ($,000) Share of
Agriculture Total (%) Attunga (L) 5 0.0 Baradine (L) 19 0.2 Barraba 218 0.5 Bendemeer (L) 2 0.0 Boggabri (L) -218 -0.7 Curlewis (L) 38 0.1 Gunnedah -355 -0.6 Kingswood (L) 18 0.1 Kootingal 1 0.0 Manilla 14 0.0 Moonbi (L) 2 0.0 Narrabri -1,541 -2.5 Nemingha (L) 0 -0.7 Nundle (L) 7 0.0 Quirindi 57 0.1 Tamworth -2 0.0 Walgett -89 -0.1 Wee Waa -7,189 -3.5 Werris Creek 10 0.1
To illustrate the diversity of the effect of the policy scenario across communities in the
Namoi Catchment Chart 2.6 and Chart 2.7 provide the impact on the value of agriculture in
Wee Waa and Moonbi. As the table above shows, Wee Waa will experience a decline in the
value of agriculture while Moonbi will experience a slight increase in the value of
agriculture.
Wee Waa’s decline of over $7 million (or 3.5% of the total value of agricultural production)
is almost entirely driven by a shock to the irrigation intensive cotton sector. This decline
represents almost three-quarters of the decline in cotton at the whole of catchment level.
While Moonbi’s vegetable sector will decline under the policy scenario, this will be more
than offset by rising production values in other livestock, other broadacre and hay.
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Chart 2.6: Impact on value of agriculture from policy
scenario – Wee Waa
-$8,000 -$6,000 -$4,000 -$2,000 $0
Other Cereals
Cotton
Other Broad Acre
Hay Production
Livestock Dairy
Other Livestock
Vegetables
Grapes
Other Fruits
Other Agriculture
($,000)
Chart 2.7: Impact on value of agriculture from policy
scenario – Moonbi
-$6 -$4 -$2 $0 $2 $4
Other Cereals
Cotton
Other Broad Acre
Hay Production
Livestock Dairy
Other Livestock
Vegetables
Grapes
Other Fruits
Other Agriculture
($,000)
2.4 Comparison of scenarios
As illustrated in Chart 2.8, the timing of the impact of the policy scenario is non-linear while
the rainfall and climate change scenarios have relatively linear impacts. As a consequence,
the forecast drier future scenario (which combines the impacts of climate change with the
proposed Murray Darling Basin plan impacts) is non-linear in its impacts.
Real GRP impacts are greatest under the policy scenario, although the impacts moderate
beyond 2020 as landuse becomes more optimised to the drier conditions and the economy
adjusts. Conversely, the rainfall and climate change impacts are more gradual; however,
despite the linear loss in water over time in these scenarios, the impacts accelerate slightly
reflecting the increased cost of each unit of water lost over time.
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Chart 2.8: Real GRP impacts, compared to BAU
2.5 Sensitivity analysis
The impact of the water availability scenarios is expected to be non-linear, in terms of costs
per unit of water lost. That is, the impacts of a 20% decline in water available for irrigation
are more than double the impacts of a 10% decline. This occurs both in:
• agriculture, where the least efficient water uses are assumed to go first, meaning that
the cost of each additional unit of water lost is greater as more water is lost; and
• the broader economy, where the flow-on impacts from a decline in agriculture become
harder to adjust to as the decline increases in magnitude.
In other words, the multiplier effect on the rest of the economy from each dollar of
production lost in agriculture becomes larger as the losses become larger.
The following assumptions were made in estimating the key water availability parameters
for the two sensitivity analyses:
Table 2.13: Water assumptions of sensitivity one
Long term average 2019 2030Average annual rainfall mm 578 -0.7% -1.6%Average water extraction allocation volume 69% -43.2% -52.4%Total water extraction entitlements ML 497,000Overall impacts on extractive water availability -43.2% -52.4%
Projections
Table 2.14: Water assumptions of sensitivity two
Long term average 2019 2030Average annual rainfall mm 578 -0.7% -1.6%Average water extraction allocation volume 69% -21.6% -26.2%Total water extraction entitlements ML 497,000Overall impacts on extractive water availability -21.6% -26.2%
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As shown in Table 2.15, doubling the cut to water available for irrigation – from a 26.2% cut
to a 52.4% cut – by 2030 more than doubled the reduction in both the value of agricultural
production and GRP.
Table 2.15: Sensitivity analysis
Impact – compared to BAU 2020 2030
Sensitivity One:
Value of irrigated agricultural production ($A, 2010 prices) -$64.4 million -$80.7 million
Value of dryland agricultural production ($A, 2010 prices) $0.1 million -$0.1 million
Value of total agricultural production ($A, 2010 prices) -$63.7 million -$80.8 million
Real GRP ($A, 2010 prices) -$131.8 million -$195.4 million
Sensitivity Two:
Value of irrigated agricultural production ($A, 2010 prices) -$28.1 million -$34.6 million
Value of dryland agricultural production ($A, 2010 prices) -$0.4 million -$1.4 million
Value of total agricultural production ($A, 2010 prices) -$28.5 million -$36.0 million
Real GRP ($A, 2010 prices) -$60.0 million -$87.6 million
Limitation of our work
General use restriction
This report is prepared solely for the internal use of Namoi Councils. This report is not intended to and should not be used or relied upon by anyone else and we accept no duty of care to any other person or entity. You should not refer to or use our name or the advice for any other purpose.
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