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A Method for comprehensively Assessing Economic Trade-Offs of New Irrigation Developments

Author

Listed:
  • C. Petheram

    (CSIRO Land and Water Flagship)

  • J. Hughes

    (CSIRO Land and Water Flagship)

  • L. McKellar

    (CSIRO Land and Water Flagship)

  • S. Kim

    (CSIRO Land and Water Flagship)

  • L. Holz

    (CSIRO Land and Water Flagship
    NSW Department of Water)

  • P. Poulton

    (CSIRO Agriculture Flagship)

  • M. Kehoe

    (CSIRO Land and Water Flagship
    Global Institue for Water Security, University of Saskatoon)

  • S. Podger

    (CSIRO Land and Water Flagship
    WMAwater)

  • G. Podger

    (CSIRO Land and Water Flagship)

  • D. McJannet

    (CSIRO Land and Water Flagship)

  • J. Hornbuckle

    (CSIRO Land and Water Flagship
    Centre for Regional and Rural Future, Deakin University)

Abstract

To meet the anticipated increase in global demand for food and fibre products, large areas of land around the world are being cleared and infrastructure constructed to enable irrigation, referred to herein as ‘greenfield irrigation’. One of the challenges in assessing the profitability of a greenfield irrigation development is understanding the impact of variability in climate and water availability and the trade-offs with scheme size, cost and the sensitivity of crop yield to water stress. For example, is it more profitable to irrigate a small area of land most years or a large area once every few years? And, is it more profitable to partially or fully water the crop? This paper presents a new method for efficiently linking a river system model and an agricultural production model to explore the financial trade-offs of different management choices, thereby enabling the optimal scheme area and most appropriate level of farmer risk to be identified. The method is demonstrated for a hypothetical but plausible greenfield irrigation development based around a large dam in the Flinders catchment, northern Australia. It was found that a dam and irrigation development paid for and operated by the same entity is not, under the conditions examined in this analysis, economically sustainable. The method could also be used to explore the impact of different management strategies on the agricultural production and profitability of existing irrigation schemes within a whole of river system context.

Suggested Citation

  • C. Petheram & J. Hughes & L. McKellar & S. Kim & L. Holz & P. Poulton & M. Kehoe & S. Podger & G. Podger & D. McJannet & J. Hornbuckle, 2016. "A Method for comprehensively Assessing Economic Trade-Offs of New Irrigation Developments," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(13), pages 4617-4634, October.
    • Handle: RePEc:spr:waterr:v:30:y:2016:i:13:d:10.1007_s11269-016-1443-2
    DOI: 10.1007/s11269-016-1443-2
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    References listed on IDEAS

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    1. Ansar, Atif & Flyvbjerg, Bent & Budzier, Alexander & Lunn, Daniel, 2014. "Should we build more large dams? The actual costs of hydropower megaproject development," Energy Policy, Elsevier, vol. 69(C), pages 43-56.
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    1. Monjardino, Marta & Harrison, Matthew T. & DeVoil, Peter & Rodriguez, Daniel & Sadras, Victor O., 2022. "Agronomic and on-farm infrastructure adaptations to manage economic risk in Australian irrigated broadacre systems: A case study," Agricultural Water Management, Elsevier, vol. 269(C).

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