Professor Glyn Wittwer from the Centre of Policy Studies at Victoria University has estimated the economic impact of a Flinders-Gilbert irrigation scheme in northwest Queensland.
Speaking at the Australian Conference of Economists in Hobart, Professor Wittwer said, “The probability that net benefits arise from the irrigation scheme, although small, is not zero. However, as an instrument of regional economic development, an irrigation scheme remains questionable.”
Although northwest Queensland has abundant water resources, land use is currently confined to rangeland cattle grazing. The introduction of a Flinders-Gilbert irrigation scheme within the region might have an outlet in lucrative Asian food markets at a time when climate change is becoming a serious issue in southern Australia.
Professor Wittwer said, “A lesson from the Ord River scheme is that even if it is technically possible to produce a given crop in an irrigation project, it does not necessarily make economic sense to do so. Sugar cane was produced for many years in the Ord River but a high Australian dollar and falling prices led to a virtual cessation of production several years ago.”
Professor Wittwer used the dynamic computable general equilibrium model – The Enormous Regional Model (TERM) – to analyse the impacts of such a scheme in northwest Queensland.
“In the main scenario, the net economic impacts of the Flinders-Gilbert irrigation scheme were negative, aligning with typical economic studies,” he said. “But a dynamic model enables us to examine impacts with different views of the future. For example, climate change in the south will raise the earnings of the irrigation scheme by driving up farm output prices. Booming demand for food products in Asia will have a similar effect.”
He says there are other examples of schemes that have had a greater impact on welfare in remote regions. “The Royal Flying Doctor Service in the late 1920s and the School of the Air established in 1951 were extraordinary innovations for their time. Any innovations that lower the costs of providing essential services to remote communities will do much more to enhance living standards than irrigation schemes.”
Professor Glyn Wittwer, Centre of Policy Studies, Victoria University is available for interview 0430 464186 or [email protected]
Public Affairs Unit, Victoria University,
9919 4322; 0434 602884; [email protected]