PROFITABILITY OF GROWING SUGARCANE UNDER ALTERNATIVE IRRIGATION SYSTEMS IN THE BURDEKIN DELTA

The Burdekin canegrowing area is a major irrigation area in North Queensland with more than 35 000 ha of irrigated sugarcane. The major proportion (some 95%) of the cane is furrow irrigated. Effective water and irrigation management is vital to maximise producer’s net returns, and for sustainable utilisation of the soil and water resources. Water management in the delta is currently the focus of a cooperative research effort involved in obtaining robust scientific data to help underpin decisions affecting the long-term economic viability of the region. Potential future economic impacts of recent and current changes to water management and environmental policies need to be considered. Also, the costs of agricultural inputs, particularly water and labour, are likely to continue to increase. In combination, these factors may therefore increase the attractiveness of alternative irrigation systems, which need to be continually reviewed as conditions change. In this paper, we use agronomic and economic data from Burdekin delta farms to estimate the relative profitability of changing from current furrow irrigation to an alternative irrigation system. We estimate the net profitability of these systems on a multi-period investment basis, and provide a ranking of the current and alternative systems according to economic criterion of net present value (NPV). Furrow A has the highest NPV followed by the Centre Pivot, then Furrow B and the Trickle irrigation system. When the volumetric water charges are used instead of area-based groundwater and differential surface water charges, the ranking of the irrigation systems changes and the Centre Pivot has the highest NPV followed by Furrow A, Furrow B, and Trickle. Under the volumetric water charging option, the overall NPVs for each irrigation system are lower than the NPVs for area-based water charges.