Economic evaluation of alternative irrigation practices for sugarcane production in the Burdekin Delta

The Burdekin delta in north Queensland is a major irrigation area producing over 35,000 ha of irrigated sugarcane and other crops. This area is unique because it overlies shallow aquifers and relies heavily on groundwater supply for irrigation water. The long-term 'health' of the groundwater systems is therefore critical to the economic and environmental well being of the whole region. The Delta Water Boards are responsible for the management and replenishment of the groundwater systems, and promote a total systems approach in the development and adoption of best practice irrigation options. Application of economic analyses can assist in determining private and social benefits of irrigation management options. In particular, detail economic modelling can incorporate the scarcity of water resources, its social opportunity cost, and evaluate alternative water management otions to maximse net social benefits. A multi-period mathematical programming model is therefore being developed to estimate the responsiveness of water demand to price changes and to alternative water management and irrigation practices. This paper presents preliminary results of economic modelling, the aim being to improve understanding of likely impact on income levels of growers and the Water Boards when growers are encouraged to adopt more efficient irrigation practices.