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PDF files

• Murrumbidgee Valley ecological assessment - main report (PDF - 475 KB)
• Murrumbidgee Valley ecological assessment - appendices (PDF - 1690 KB)

About this report

Whilst investigating the drivers and barriers to adoption of irrigation technology in the Murrumbidgee Valley it became apparent that there was little information available on the financial benefits or otherwise of installing a pressurised irrigation system on either horticultural or broadacre farms. Therefore, to test the economic benefits for farmers in implementing changes on-farm to improve water use efficiency, financial case studies were developed for both a “typical” horticultural farm and a broadacre farm. The case studies tested different financing arrangements, each with a range of sensitivities. For horticultural farms the objective was to identify water savings that could be traded to fund the conversion or used for further development. For broadacre farms the objective was to adopt more water efficient practice to save water, with the savings used to grow more area of crop, therefore increasing on-farm production and farm gate income.

The initial inputs into the model were collected from NSW Department of Primary Industry’s website and once the budgets were developed the figures used, and the findings, were validated with landholders, staff from Murrumbidgee Irrigation and Coleambally Irrigation and various agricultural advisers.

The models were developed using MSExcel spreadsheets and consisted of cash flow budgets covering eight years. In the budgets, returns from crops are calculated as gross margins using figures provided on the NSW Department of Primary Industry’s website (www.agric.nsw.gov.au/reader/budget) being gross income from an enterprise less the variable costs incurred in achieving it such as fertilizer, seed, spraying and harvesting. Gross margin is not gross profit because it does not include fixed or overhead costs such as depreciation, interest payments, rates, or permanent labour which have to be met regardless of enterprise size, and is GST exclusive. The cost of new or modified equipment is also not included in the budgets.

The case studies were developed on “typical” farms whilst recognising that every property and every farming situation is different. Most importantly, the budgets provide a simple mechanism that can be used to investigate the probable outcomes for a farmer of adopting irrigation technology.