Technical Report No. 03/07
Optimised Irrigation Productivity and River Health
through Pick & Mix Strategies
Catchment Water Cycle Management, Alternative Cropping Systems,
Real Water Savings and Aquifer Storage and Recovery
Shahbaz Khan, Hector Malano, Brian Davidson,
Aftab Ahmad, Shahbaz Mushtaq and Catherine Allan
September 2007
BETTER IRRIGATIO
N
BETTER ENVIRONMENT
BETTER FUTURE
Optimised Irrigation Productivity and River
Health through Pick & Mix Strategies
Catchment Water Cycle Management, Alternative Cropping
Systems, Real Water Savings and Aquifer Storage and
Recovery
Shahbaz Khan1,2, Hector Malano3, Brian Davidson3, Aftab
Ahmad2, Shahbaz Mushtaq1,2 and Catherine Allan2
1
CSIRO Land and Water, 2International Centre of Water for Food Security, Charles
Sturt University, 3University of Melbourne
CRC for Irrigation Futures
CRC for Irrigation Futures Technical Report No. 03/07
September 2007
CRC for Irrigation Futures
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CRC IF Copyright Statement
© 2007 IF Technologies Pty Ltd. This work is copyright. It may be reproduced
subject to the inclusion of an acknowledgement of the source.
Important Disclaimer
The Cooperative Research Centre for Irrigation Futures advises that the
information contained in this publication comprises general statements based
on scientific research. The reader is advised and needs to be aware that such
information may be incomplete or unable to be used in any specific situation.
No reliance or actions must therefore be made on that information without
seeking prior expert professional, scientific and technical advice. To the extent
permitted by law, the Cooperative Research Centre for Irrigation Futures
(including its employees and consultants) excludes all liability to any person for
any consequences, including but not limited to all losses, damages, costs,
expenses and any other compensation, arising directly or indirectly from using
this publication (in part or in whole) and any information or material contained in
it.
Acknowledgements
The authors wish to acknowledge inputs from the Pratt Water Study in the
Murrumbidgee Valley.
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Executive Summary
This report summarises the findings of an irrigation-river system analysis aimed at
investigating the ramifications of introducing water demand management strategies to
modify river flows, so that they more adequately replicate natural flows in the river while
enhancing the overall productivity of the irrigation systems.
To achieve this aim, the project focused on the following specific objectives:
•
To identify opportunities to modify irrigation system demand and supply
parameters through improved on- and off-farm infrastructure management,
changed cropping mixes, potential ground water substitution and trading
options;
•
To assess the wider economic, environmental and social impacts of these
change management strategies;
•
To obtain community feedback on the value of these options in meeting the
economic and environmental issues arising from the implementation of water
reform in irrigated catchments;
•
To achieve consensus between catchment stakeholders and scientists on
future catchment scenarios and knowledge gaps; and
•
To identify opportunities for joint CRC-industry research investments in future.
Project components
The project was divided into five main components: (i) system analysis (demand
management & economics); (ii) harmonising the distribution system (iii) framework for
assessing social acceptability of management options; (iv) social Benefit-Cost
assessment; and (v) linking improved seasonality of flows with system harmonization
(i)
System analysis (demand management & economics)
The main aim of this project component was to investigate the hydrological and
economic consequences of introducing demand management measures for improving
the seasonality of flows. In particular, to estimate the trade-off between replication of
natural flows in the river and agricultural income under different irrigation demand
management options.
(ii)
Harmonising the distribution system
The main aim of this project component was to examine the current technological
position of irrigation distribution in Australia with a view to determine opportunities for
improving system harmonisation. As such, it was intended to scope three key
knowledge areas: (1) Identification of flow control technologies in Australia, (2) review
of state-the-art modelling in canal operation modelling; and (3) identification of
opportunities for adoption of canal automation technology to improve harmonisation of
the on-off farm interface
(iii)
Framework for assessing social acceptability of management options
The main aim of this project component is to explore ‘community’ involvement in setting
irrigation research agendas and evaluating water management options in the
Murrumbidgee Valley. Particularly, to involve stakeholder in identification of possible
demand management options from a range of options and gauge their acceptability.
(iv)
A social Benefit Cost method for assessing improved seasonality of
flows through demand management
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The purpose in this study was to assess whether it was possible to estimate the social
costs and benefits of irrigation. Such an assessment relied on completeness of the
available information. In other words, the study focused on whether it was possible to
specify all the costs and benefits of irrigation, or as many as possible, that would result
in a reasonable estimate of the net present value of implementing a range of demand
management strategies.
(v)
Linking improved seasonality of flows with system harmonization
The main aim of this project component was understand how improved irrigation
demand management can result in a harmonised (balanced) irrigation and environment
catchment system.
Study area
This study was conducted in the Murrumbidgee valley of New South Wales. The
Murrumbidgee River has a catchment area of approximately 84,000 km2 and a length
of 1600 km from its source in the Snowy Mountains to its junction with the Murray
River. The main irrigation areas in the catchment are the Murrumbidgee Irrigation Area
(MIA), Coleambally Irrigation Area (CIA) and the Lower Bidgee Irrigation Area. The
study was confined to two irrigation areas, MIA and CIA. Major irrigated crops in both
districts include grapes, citrus, rice, wheat, barley, oats, canola, soybeans, maize and
sunflowers. Lucerne and pastures for sheep and cattle are also irrigated.
Stakeholders interaction for identification of demand management options
A range of irrigation demand management options were identified through the rigorous
discussions with the key stakeholder groups in the region. Two key stakeholders’
workshops were organised during the course of the project – one in Leeton in April
2004 and the other in Griffith in March 2005 - to discuss possible irrigation demand
management options and their perceived benefits. The options include (i) market based
reduction in surface water demand; (ii) conjunctive water use augmented by aquifer
storage and recovery; (iii) spreading of water demand with improved cropping mix; (iv)
increase conveyance efficiency (canal lining); (v) increase on-farm water use efficiency
through water-saving irrigation technologies; and (vi) en-route storages.
On the basis of discussions with the stakeholders the most attractive options for
managing peak summer water demand were conjunctive water use, en-route storages
and improved cropping mix. The key criteria for success of the irrigation demand
management options were demonstrable water savings and clear reduction in peak
summer water demand.
Main findings and recommendations of the project components
System analysis (demand management & economics)
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(i)
Main findings at the farm level
•
A hypothetical farm with total area of 440 hectares with 2695 ML of water,
without any cropping restrictions, was considered for the farm level analysis
of different irrigation demand management options.
•
Market based reduction in surface water demand: The analysis of farm level
impacts of market based reduction in water demand shows that compared
to farm baseline profit for the year 2000/2001; a 10% decrease in water
demand would reduce farm profit by almost 5% or $33,458 when compared
with a baseline year. However, when surface water demand was reduced by
20%, farm income decreased by almost 12% or $78,973 when compared
with a baseline year. Overall, with market based reduction of 10% and 20%
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of surface water demand, a typical farm has an additional 222 ML and 443
ML of water respectively that can either be traded to improve the
seasonality of flows or to grow alternative “higher value” crops.
•
Conjunctive water use (groundwater abstraction only): Farm level impact of
a decrease in peak water demand by 10% or 222 ML and increase in
supplemental supply from groundwater shows a decrease in farm profit of
almost 0.4% or $2,531 compared to baseline year. However, when surface
water demand was reduced by 20% or 443 ML and the same amount of
water was substituted from groundwater; the drop in farm income was only
1% or $6,498.
•
Conjunctive water use (injection/infiltration + extraction): A reduction in peak
water demand by 10% and increase in supplemental supply of groundwater
through Aquifer Storage and Recovery (ASR) shows a decrease in the farm
profit of almost 1.4% or $8,828. Alternatively, farm income decreased by
almost 2.7% or $17,716 when surface water demand was reduced by 20%
and supplemental groundwater supply increased.
•
Spreading water demand with an alternate cropping mix: The optimization
result shows that with a 10% reduction in surface water demand the total
farm income increases by about 1.7% or $10,794 with water saving of 222
ML/year. This translates into a reduction in peak summer water demand of
8.25%. However, 20% reduction in supply causes a reduction in farm
income of 2.44% or $15,890. Importantly, the resulting water saving of
around 443 ML per year can reduce the peak summer water demand by
16.5%.
•
Increased end use efficiency (Water saving irrigation technologies): Two onfarm water-saving irrigation technologies -drip and sprinkler irrigation -, were
selected for increasing on-farm water use efficiency. The farm-level analysis
shows that due to reductions of surface water demand and adoption of onfarm water saving irrigation technologies, farm income dropped by 4.15% or
$27,105. This, however, will save 416 ML of water which may used to
reduce the peak demand by 15% and can effectively be traded.
(ii)
Main findings at the system-level
•
The regional impact was assessed by evaluating the impact of each
demand management option on major crops and aggregating them for the
MIA and CIA irrigation systems.
•
The estimates show that the capital investment to line canals with bentonite
is about $133,733/km which translate to $1,713/ML. An investment of $33
million/year is required for 20 years to save about 200 GL of water per year
and improve conveyance efficiency to 85%.
•
The estimated capital investment for three 50 GL storages and one 250 GL
storage is approximately $75 million and $115 million, respectively, with an
annual operating cost of about $2 million. This could reduce the peak
demand by 119 GL (8.5%) and 203 GL (14.5 %) of water, respectively.
•
The comparison among different possible demand management options
shows that spreading water demand through improved cropping mix which
matches with soil and climatic conditions is the best irrigation demand
management option. The new crop mix shows a positive gain in agricultural
returns of $5.49 million after the reduction of 10% demand of surface water
while a loss of $4.79 million is incurred for 20% reduction in water demand.
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•
Conjunctive water use through more groundwater extraction or infiltration
and extraction is also a realistic option capable of securing over 215 GL of
water compared to 2000/2001 of water use with minimum cost to agriculture
return. To secure 215 GL of water through groundwater extraction it would
cost only $3.23 million in terms of reduced return from agriculture. While, it
would cost around $8.96 million to agricultural for same 215 GL of water
through the ASR development program.
•
The most expensive option to recover additional water for environmental
purposes is through canal lining because of high labour and material costs.
However, this option is still feasible and capable of providing over 215 GL of
water to satisfy the long term environmental demand.
(iii)
Recommendations
•
Improved cropping mixes should be encouraged while matching proper soil
and climatic conditions. However, this may need structural adjustment and
incentives to transform to alternative farm enterprises. Additionally, this
needs to be supported by market development for alternative crops.
•
A well coordinated and integrated management of the surface and
groundwater resources would help to maximise conjunctive water uses.
•
Canal lining and water-saving irrigation technology is also a viable option.
However, it requires considerable private-public investment both off-farm
and on-farm level. An accurate accounting system is needed to measure
benefits and provide confidence in private investment decisions.
•
Leasing water and preferential access rights may help remove barriers to
the adoption of irrigation technologies, move farmers and irrigation area to
next step of the irrigation efficiency ladder, reduce local and regional
environmental impacts and secure water for better ecological futures.
Harmonising the Distribution System
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(i)
Main findings
•
The analysis of various canal technologies shows that channel distribution
systems in Australia still rely largely on traditional technologies for water
control; and despite that new technologies developed both in Australia and
overseas have become readily available in past decades, the level of
adoption still remains low.
•
The study reveals that the vast majority of Australian systems (78%) rely on
open channels or a combination of open channels and pipelines for
distribution of water to farmers. Only 22% of systems rely only on pipelines
for water distribution. In terms of system capacity, open channels account
for 94% of the systems surveyed. A similar picture emerges regarding the
use of canal lining. A small proportion of main canal systems (2%) are lined.
Concrete remains the main lining material despite new membrane materials
becoming more available in recent years.
•
Canal regulation is achieved mainly by a combination of overshot cross
regulators on the main canal and undershot structures in lateral and spurs
outlets.
•
A large proportion (60%) of these main canal regulators is still manually
operated. This figure is higher (64%) in secondary canal structures. 46% of
the systems surveyed have equipped the main canal regulators with remote
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control mechanised structures. This figures drops to 33% for secondary
canals the incorporate some kind of remote control operation.
•
There is increasing diversification in technology used for flow metering.
Thirty nine percent of systems surveyed rely only on Dethridge meters.
Magflow meters are used in 37% of systems surveyed in conjunction with
an array of other metering devices. The adoption of new metering
technology is driven by more accurate flow measurement and ability to use
SCADA technology.
•
A large proportion of irrigation providers (52%) surveyed have undertaken
some form of infrastructure upgrade in the last 5 years which often includes
some form of infrastructure refurbishment combined with channel
automation. This figure increases to 60% of irrigation providers which plan
to undertake system upgrades in the next 5 years.
•
There is little evidence that sufficient monitoring and evaluation of system
upgrades is carried out to determine whether these objectives are achieved.
There is no evidence that actual on-farm and catchment impacts arising
from canal automation are either identified or evaluated.
•
A comprehensive review of canal operation models was also undertaken
which reveals a wide array of computer models available to simulate the
operation of canal systems. However, the use of these models still remains
largely in the research domain.
(ii) Recommendations
•
Canal automation together with modern control and communications
technology represents the best and most obvious opportunity for advancing
harmonisation of the three system domains: River, distribution and farm
systems. Based on this, it is therefore recommended that various forms of
canal automation technology available should be adopted.
•
The future efforts in canal automation should emphasise the integration of
the farm, distribution system and river system to maximise the benefits to
agricultural production and provision of environmental in-stream
requirements.
•
As a matter of urgency, systematic research is necessary to evaluate the
impacts of canal automation technology at farm, system and catchment
levels of current pilot projects. Learned lessons from existing case studies
can contribute to maximise the benefits and avoid mistakes in future canal
automation projects.
Framework for assessing social acceptability of management options
(i)
Main findings
•
Social acceptability research, combined with hydrological and economic
models, was found to be an effective way to evaluate the scope of different
irrigation demand management options to improve seasonality of flows.
•
Two key stakeholders’ workshops were organised during the course of the
project – one in Leeton in April 2004 and the other in Griffith in March 2005 to discuss possible irrigation demand management options and their
perceived benefits.
•
The first meeting demonstrated the value of articulating assessment criteria
when dealing with new and potentially disruptive options for management of
irrigation demand in a catchment context.
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•
The assessment criteria developed at the first meeting were only
approximations. As a consequence, a refinement of those criteria through
meetings with different community members would be necessary for them to
become a truly useful tool.
•
It was evident from the two meetings that some options for improving
seasonality of flows in rivers through irrigation demand management and
harmonising irrigation systems with the environment were more acceptable
to this group of community participants than other options
•
Further, it could be concluded that this acceptability influenced what
participants considered as worthwhile research to pursue. The most
acceptable options for this group were those that involved changes to the
delivery of water to the irrigation district and/or individual properties.
•
The development and co-ordination of en-route storages and various
processes for achieving conjunctive use of ground and surface water were
seen to have the potential to produce some environmental enhancement
with minimal disruption to the irrigation community.
•
Options which had more direct and potentially negative impacts on
individual farmers, such as spreading water demand with improved cropping
mix, were not as acceptable to the meeting participants.
•
However, even as a rough tool the areas of the different options that
requires further work to make them more acceptable to the irrigation
community are clearly articulated.
(ii)
Recommendations
•
Social acceptability theory emphasises the importance of understanding
how judgements about whether to accept and adopt are made. To
effectively gauge social judgement of different ideas it is recommended to
follow a systematic and transparent process to move beyond immediate
reflex reactions to new and risky ideas. Under the current project, only two
meetings were possible, and only a few participants were able to be
involved in the meetings. However, to effectively gain the trust of the key
stakeholder there should be frequency meeting with the key stakeholders.
So as a technique for future development of projects that communities may
not first seems hostile to it and shows some promise.
A social Benefit Cost method for assessing improved seasonality of flows
through demand management
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(i)
Main findings
•
It would appear that obtaining reasonable estimates of the private benefits
of distributing water through an irrigation scheme is possible. However,
even crude estimates of the environmental returns would not appear to be
possible at this stage.
•
It was found that in MIA and CIA agriculture contributed $1,475 million and
recreation contributed $21 million.
•
Obtaining reasonable estimates of the private costs of supplying irrigation
water would seem possible. However, estimating the public costs would
appear to be more difficult than obtaining the public benefits of irrigation.
While some costs could be determined using the amounts spent on
containing it, such estimates are quite limited.
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•
The salvage value and that of hydro-electric power generation were not
considered. The cost of supplying water was estimated to be $21.4 million,
while foregone production accounted for $86.5 million and the opportunity
cost of water was calculated to be $23 million. This results in net private
benefits from irrigation of $1,365.4 million.
•
The net private benefits do not include the costs of constructing the
schemes (as they are sunk), or the public costs and benefits of irrigation. It
was found that reasonable estimates of the public benefits and costs would
be difficult, if not impossible, to obtain.
•
The large net private benefits derived from irrigation provide some scope to
implement a range of demand management strategies. The strategies
reviewed in this study range from increasing water efficiency through to
changing water demand. The problem arises in the sense that those who
lose from implementing a measure are not those who gain. In other words,
it is more likely that a potential Pareto improvement could be possible.
(ii)
Recommendations
•
Initially, the study proposed a social Benefit Cost analysis for evaluating
irrigation demand management options. However, given the difficulties in
valuing ecosystem services to some extend measuring environmental costs,
Cost Effective Analysis (CEA) maybe best suited for this study. The CEA is
best suited for the studies where ecosystem services can not be determined
accurately.
•
To value ecosystem services, a residual method in the valuing process
could be employed. However, it should be noted that such an approach is
inadequate as all unaccounted for activities would be considered to be an
ecosystem service. Despite this, it may provide a good proxy for valuing
said services. The need for finding a proxy valuation technique arose
because the existence of ecosystem services defies normal valuation
techniques. In particular, no markets exist for them.
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Table of Contents
Executive Summary........................................................................................................ iii
Project components ....................................................................................................iii
Study area ..................................................................................................................iv
Stakeholders interaction for identification of demand management options...............iv
Main findings and recommendations of the project components................................iv
System analysis (demand management & economics) ..........................................iv
Harmonising the Distribution System......................................................................vi
Framework for assessing social acceptability of management options .................vii
A social Benefit Cost method for assessing improved seasonality of flows through
demand management ........................................................................................... viii
List of Tables .................................................................................................................xii
List of Figures ................................................................................................................xii
Glossary of Acronyms................................................................................................... xiii
1.
Overview of Project................................................................................................ 1
1.1 Introduction ............................................................................................................. 1
2.
1.2
Project goal and objectives ............................................................................. 2
1.3
Project components ........................................................................................ 2
1.4
Study area....................................................................................................... 3
1.5
Stakeholders interaction for identification of demand management options... 3
1.6
Aim and organisation of the report.................................................................. 5
System Analysis (Demand Management & Economics)......................................... 6
2.1
Methodology ................................................................................................... 6
2.2
Modelling framework ....................................................................................... 6
2.3
Water Saving Scenarios ................................................................................. 7
2.4
Results and discussions ................................................................................. 7
2.4.1
Farm-level analysis ................................................................................. 7
2.4.2
System level analysis.............................................................................. 9
2.4.3
Sensitivity analysis ................................................................................ 13
2.5
3.
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Conclusions and recommendation................................................................ 14
2.5.1
Conclusions........................................................................................... 14
2.5.2
Recommendations ................................................................................ 14
Harmonising the Distribution System................................................................... 15
3.1
Methodology ................................................................................................. 15
3.2
Results and discussions ............................................................................... 16
3.2.1
Irrigation infrastructure .......................................................................... 16
3.2.2
Infrastructure upgrades and system harmonisation .............................. 18
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4.
3.2.3
Canal operation modelling .................................................................... 19
3.2.4
Innovations in canal automation in Australia......................................... 20
3.2.5
System upgrade and system harmonisation opportunities: A vision..... 20
3.3
Conclusions and recommendations .............................................................. 22
3.4
Recommendations ....................................................................................... 23
Framework for Assessing Social Acceptability of Management Options .............. 23
4.1
Methodology ................................................................................................. 23
4.2
Results and discussions ............................................................................... 24
4.2.1
Gauging the social acceptability of different options-phase1 ................ 24
4.2.2
Gauging the social acceptability of different options-phase2 ................ 26
4.3
5.
A Social Benefit Cost Method for Assessing Improved Seasonality of Flows
through Demand Management ............................................................................ 27
5.1
Methodology ................................................................................................. 27
5.1.1
Social Benefit Cost Analysis (BCA)....................................................... 27
5.1.2
Conceptual issues................................................................................. 28
5.2
Results and discussions ............................................................................... 29
5.2.1
The Benefits of Irrigation ....................................................................... 29
5.2.2
The costs of Irrigation............................................................................ 30
5.2.3
Determining which alternative to choose .............................................. 31
5.3
6.
Conclusion and recommendations................................................................ 27
Concluding remarks and recommendations ................................................. 32
Improved Seasonality of Flows as part of System Harmonisation........................ 33
6.1
Analysis and Characterisation of Hydrologic Systems.................................. 34
6.2
Water productivity, markets and environmental dividends............................ 35
6.3
Mechanisms and processes for change ....................................................... 36
6.4
Developing a business model ....................................................................... 37
6.5
Implementation challenges ........................................................................... 38
References ................................................................................................................... 39
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List of Tables
Table 1. Comparison of change in area, income and water use of possible demand
management options at farm level after a reduction of surface water demand by
10% ......................................................................................................................... 8
Table 2. Comparison of change in area, income and water use with possible demand
management options at farm level after a reduction of surface water demand by
20% ......................................................................................................................... 9
Table 3. Comparison of water use and income of baseline conditions with proposed
demand management options at system level after reduction of surface water
demand by 10%..................................................................................................... 11
Table 4. Comparison of water use and income of baseline conditions with proposed
demand options at system level after a reduction of surface water demand by 20%
............................................................................................................................... 12
Table 5. Irrigation provider’s assessment of upgrade benefits ..................................... 19
Table 6. Assessment criteria for evaluating improved seasonality of flows project based
on the key stakeholder preference ........................................................................ 25
Table 7. The seven options for enhancing seasonality of flow and system
harmonisation ranked by the 5 groups of irrigation community members ............. 26
List of Figures
Figure 1. 100 years monthly average of current and natural flows at Balranald
Murrumbidgee River ................................................................................................ 1
Figure 2. Location of the Murrumbidgee River Valley. Source: Khan et al., 2004a ........ 4
Figure 3. Conceptual framework for analysis of demand management options............. 6
Figure 4. Comparison of monthly demand for water between baseline conditions and
new crop mix achieved over 20 years for MIA....................................................... 12
Figure 5. Sensitivity of monthly CWR of the MIA and CIA to 15 percent change in area
of vines within 50%, 75%, 95% and 100% confidence bounds ............................. 13
Figure 6. Sensitivity of monthly CWR of the MIA and CIA to 10 percent change in area
of vines within 50%, 75%, 95% and 100% confidence bounds ............................. 14
Figure 7. Main elements of a whole-of-system approach to on-off farm system
harmonisation ........................................................................................................ 21
Figure 8. Five way feasibility leading to SHARP implementation ................................. 33
Figure 9. Knowledge generation during the SHARP feasibility..................................... 33
Figure 10. The COM research cycle for SHARP feasibility .......................................... 34
Figure 11. Identification of key pressure points in the irrigated catchment water cycle 35
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Glossary of Acronyms
ANCID
Australian National Committee on Irrigation and Drainage
ASR
Aquifer Storage and Recovery
CEA
Cost effective analysis
CIA
Coleambally Irrigation Area
CRC IF
Cooperative Research Centre for Irrigation Futures
CSIRO
Commonwealth Scientific and Industrial Research Organisation
CWR
Crop water requirement
GL
Giga litre
MAR
Managed Aquifer Recharge
MIA
Murrumbidgee Irrigation Area
ML
Mega litre
RIBP
Regional Irrigation Business Partnerships
SHARP
System Harmonisation for Applied Regional Planning
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xiii
1.
Overview of Project
1.1
Introduction
In Australia, rivers are regulated to principally provide water for agriculture. This act of
moving water in time and space has had both favourable and unfavourable
environmental impacts. Most obviously, the impact has been favourably seen in
agriculture where a variety of activities that were impossible in the absence of water
are now possible. Less favourable impacts have been felt on river health. The very act
of regulating rivers has resulted in the hydrograph of the river becoming inverted. The
highest flows now occur in the summer period, to meet the needs of irrigators while the
lowest flows occur in the winter and spring, when the storages refill (Figure 1). In the
southern Murray Darling basin rivers once flooded naturally in spring and were dry in
summer. Now, due to regulation, they are dry in spring and flooded in summer. What
has been favourable for agriculture has led to unfavourable conditions for the natural
environment. Maintaining a healthy river environment in terms of rate, temporal
variability, volume over season − seasonality of flow through the allocation and
management of water resources has become a big challenge for policy makers, one in
which they must balance with the competing demands of the irrigation industry.
400
Natural Flows
Monthly Flow (GL)
350
Current Flows
300
250
200
150
100
50
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Figure 1. 100 years monthly average of current and natural flows at
Balranald Murrumbidgee River
The fundamental question is how this seasonality of flow − rate, temporal variability,
seasonal volume − can be partially restored to mimic natural flow regimes? The
traditional approaches for securing environmental flows aimed to recover volumes of
water include; (i) reducing allocations to irrigators without compensation; (ii) buy water,
by providing compensation or purchase on the open market; or (iii) save water, by
improving infrastructure to reduce losses from supply systems. These approaches
involve high social and political costs for managing environmental flows, and do not
address the seasonality of flow challenge.
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1
An alternative to the above approaches for achieving better environmental outcomes,
options which replicate the river’s more natural hydrograph, maybe to improve the
seasonality of flows using different irrigation demand management options to reduce
peak summer demand for irrigation water by spreading demand over summer and
winter periods. Reintroducing natural flow sequences through irrigation water demand
management will reduce the ecological impacts that have resulted from too high and
too less flows in rivers. In economic phraseology this case would result in a Pareto
Improvement, which makes environment better off, without making agricultural worse
off (Osborne and Rubenstein, 1994). However, it may take a truly integrated and
cooperative approach at a range of stakeholders’ level through water reform and
demand management to contribute environmental, social and economic benefits.
The purpose in this report is to document the findings of a preliminary project on what
could be done to improve the health of rivers by returning them to a more natural flow.
While it is assumed herein that the environmental benefits of more natural flows are
positive and desired, they are not quantified. Rather, the aim in this report is to assess
the hydrological, social, on-farm and broader resource economic issues that arise from
returning more natural flows to a regulated river system. In undertaking this task a
number of techniques that could be employed to manage the demand are explored. It
is concluded that 10% to 15% of peak water demand during summer can be reduced
from the average total annual water demand of 1400 MCM. However, this may result in
reduced agricultural return or require private and public investments in the form of onfarm water saving technologies, canal lining or construction of en-route storage.
However, if we value the saved water at current market prices then benefits are
expected to be higher than the costs involved.
1.2
Project goal and objectives
This project is a part of the “Smart System and System Harmonization” project. The
main aim of this project is to investigate the ramifications of introducing demand
management measures to modify river flows so that they more adequately replicate
natural flows in the river.
To achieve this aim, the project focuses on the following specific objectives:
•
To identify opportunities to modify irrigation system demand and supply
parameters through improved on- and off-farm infrastructure management
such as canal automation, changed cropping mixes, potential ground water
substitution and trading options;
•
To assess the wider economic, environmental and social impacts of these
change management practices;
•
To obtain community feedback on the value of these options in meeting the
economic and environmental issues arising from the implementation of
water reform in irrigated catchments;
•
To achieve consensus between catchment stakeholders and scientists on
future catchment scenarios and knowledge gaps; and
•
To identify opportunities for joint CRC-industry research investments in
future.
1.3
Project components
The project was divided into five main components: (i) system analysis (demand
management & economics); (ii) harmonising the distribution system (iii) framework for
assessing social acceptability of management options; (iv) social Benefit Cost
assessment; and (v) linking improved seasonality of flows with system harmonization
2
CRC for Irrigation Futures
(i)
System analysis (demand management & economics)
The main aim of this project component was to investigate the hydrological and
economic consequence of introducing demand management measures for improving
the seasonality of flows. Particularly, to estimate the trade-off between replication of
natural flows in the river and agricultural income under different irrigation demand
management options.
(ii)
Harmonising the distribution system
The main aim of this project component was to examine the current technological
position of irrigation distribution in Australia with a view to determine opportunities for
improving system harmonisation. As such, it is intended to scope three key knowledge
areas: (1) Identification of flow control technologies in Australia, (2) review of state-theart modelling in canal operation modelling; and (3) identification of opportunities for
adoption of canal automation technology to improve harmonisation of the on-off farm
interface
(iii)
Framework for assessing social acceptability of management options
The main aim of this project component is to explore ‘community’ involvement in setting
irrigation research agendas and evaluating water management options in the
Murrumbidgee Valley. Particularly, to involve stakeholders in identification of possible
demand management options from a range of options and gauge their acceptability.
(iv)
A social Benefit Cost method for assessing improved seasonality of flows
through demand management
The purpose in this study was to assess whether it was possible to estimate the social
costs and benefits of irrigation. Such an assessment relied on completeness. In other
words, was it possible to specify all the costs and benefits of irrigation, or as many as
possible, that would result in a reasonable estimate of the net present value of
implementing a range of demand management strategies.
(v)
Linking improved seasonality of flows with system harmonization
The main aim of this project component was understand how improved irrigation
demand management can result in a harmonised (balanced) irrigation and environment
catchment system.
1.4
Study area
This study was conducted in the Murrumbidgee valley of New South Wales (see Figure
2). The Murrumbidgee River has a catchment area of approximately 84,000 km2 and a
length of 1600 km from its source in the Snowy Mountains to its junction with the
Murray River. The geographic boundaries of the Murrumbidgee catchment include the
Great Dividing Range in the east, the Lachlan River Valley to the north and the Murray
River Valley to the south. The Murrumbidgee River originates in the Fiery Range of the
Snowy Mountains approximately 50 km north of Kiandra. It flows in a south-easterly
direction towards Cooma and then turns north through the Australian Capital and then
west until it joins the Murray (Khan et al., 2004 a).
1.5
Stakeholders interaction for identification of demand
management options
A range of irrigation demand management options were identified through the rigorous
discussions with the key stakeholder groups in the region. Two key stakeholders’
workshops were organised – one in Leeton in April 2004 and the other in Griffith in
March 2005; to discuss the possible irrigation demand management options and their
perceived benefits. The options include (i) market based reduction in surface water
CRC for Irrigation Futures
3
demand; (ii) conjunctive water use augmented by aquifer storage and recovery; (iii)
spreading of water demand with improved cropping mix; (iv) increase conveyance
efficiency (canal lining); (v) increase on-farm water use efficiency through water-saving
irrigation technologies; and (vi) en-route storages - substitute water use period by
storing water along the river.
Figure 2. Location of the Murrumbidgee River Valley. Source: Khan et al., 2004a
On the basis of discussion with the stakeholders the most attractive options for
managing peak summer water demand were conjunctive water use, en-route storages
and improved cropping mix. The key criteria for success of the irrigation demand
management options were demonstrated by anticipated water saving and reduction in
peak summer water demand.
(i)
Market based reduction in surface water demand
Market based reduction in water demand are often promoted as a cost-effective way of
attaining environmental objectives. This is also considered to promote technological
advances as market forces ensure the most economically efficient route to achieve the
target. Water to improve seasonality of flows can be purchased through an open
market mechanism. The environmental managers can buy water for environment
requirements at market price and provide it back to the rivers on a seasonal flow
improvement basis. Targeted buying of water access entitlements will not only results
in greater production from the same (or less) amount of water but also accrues greater
environmental benefits where water is traded from degraded areas and/or low value
low efficiency production (Ouyahia et al., 2005).
(ii)
4
Conjunctive use of surface and groundwater through aquifer storage
and recovery
CRC for Irrigation Futures
Current groundwater storages can be augmented using aquifer storage and recovery
(ASR), also called managed aquifer recharge (MAR). This stored water can be used to
meet part of the peak flow demand. However, substitution of surface water with
groundwater can only be feasible if the cost of using surface water is greater than the
cost of using groundwater and on-farm irrigation infrastructure is capable of using water
from the two sources.
(iii)
Spreading water demand with improved cropping mix
Since agriculture is the largest water user, reallocation of crops both temporally and
spatially will likely result in reduced demand for water. Improving crop mix by focusing
on both winter and summer crops can help improve environmental outcomes and
optimise the water demand according to environmental requirement. For example, the
alternative cropping pattern may require replacing rice, which is major water user, with
less water intensive crops in the summer and spreading the water demand to the
winter months.
(iv)
Increasing conveyance efficiency (canal lining)
System level improvement in efficiency can be achieved by reducing conveyance
losses such as seepage, leakage and evaporation. High investments are required to
contribute to increase system level efficiency by improving the structures. By saving the
water loss through infrastructure improvement, there will be no change in actual
resource use at the farm level. However, saved conveyance losses can be used to
improve the seasonality of flow in the rivers.
(v)
Increasing on-farm use efficiency (Water-saving irrigation technologies)
By improving the on-farm water use efficiency, less water will be required by the
farmers to maintain same level of production. This can be achieved by introducing
various water saving irrigation practices such as drip irrigation and sprinkler irrigation
system. This may help provide saved water to augment flows in the rivers.
(vi)
En-route storages
Changing dam release pattern by providing en-route storages of water; this can be
achieved by arranging small water storage facilities closer to farmer’s field that are
capable to supply water in peak demand. The en-route storages can help augmenting
irrigation supplies from the rivers during peak demand, and also achieve improved
seasonality of flows. En-route storages with different inlet and outlet capacities provide
a multi-purpose option in addressing issues of limited flow, channel damage, rainfall
rejection, system response times and strategic environmental watering (Pratt Water,
2004).
1.6
Aim and organisation of the report
The aim of this document is to present the summary of various project components.
The second section of the report deals with the summary of the investigation of
hydrological and economic consequences of introducing demand management options.
Section 3 deals with canal automation and examines current technological position of
irrigation distribution in Australia with a view to determine opportunities for improving
system harmonisation. The section 4 explores the ‘community’ involvement in setting
irrigation research agendas and evaluating water management while section 5
presents of the economic aspects of this project with emphasis of social cost benefit
analysis. The final section 6 integrates the findings of all four components of the
projects into system harmonisation proposal as part of the next stage of CRC Irrigation
Futures Research Program.
CRC for Irrigation Futures
5
2.
System Analysis (Demand Management &
Economics)
The main aim of this project component was to investigate the hydrological and
economic consequence of introducing demand management measures for improving
the seasonality of flows. Particularly, to estimate the trade-off between replication of
natural flows in the river and agricultural income under different irrigation demand
management options.
2.1
Methodology
The impact of preserving the seasonality of flows by reducing the peak flow variations
through surface water supplies reductions on agricultural income and water use
requires analysis both at farm and catchment-level. Changes in water availability
directly impact on the area of irrigated enterprise and resulting returns along the rivers,
and subsequently on environment quality. Therefore, both farm and system levels
perspective of the agricultural system attempt to elucidate properties that emerge from
interactions among components – agricultural productivity, economic opportunities and
environmental quality. The analysis considered both (1) direct production and
economic effects of reduced water supply on agriculture (crop acreage, water use,
irrigation system costs and farm-level revenue) and (2) indirect effects of the
agricultural adjustments on system-level.
2.2
Modelling framework
To quantify the impact of improving the seasonality of flows on agricultural income and
water use, hydrologic and economic analysis both at farm and catchment-levels are
required. A three-stage modelling procedure was developed to analyse a variety of
hydrologically improved and economically viable irrigation demand management
options. The hydrological sub-models determined the optimal water use pattern for a
specific demand management option and economic modelling determined the optimal
on-farm response in terms of farm income. The conceptual framework for the irrigation
demand management options that integrates hydrological and economic aspects is
shown in Figure 3. The detail of the methodology is available at improved seasonality
of flows through irrigation demand management and system harmonisation main
report.
Changes in the surface
water allocation
e.g. reduction in water
demand
Change in the
characteristic variables
of water system. e.g.
agricultural production,
water use etc
Hydrological simulations
of crop & water systems
• Dynamic system
modelling
• VenSim Model and
SWAP model
Changes in welfare.
Cost and benefit at farm
and system level and
t
i
Economic modelling
• Production function
• Profit function
• Linear programming
Policy options and
decisions
• E.g. crop mixing,
groundwater use etc
Figure 3. Conceptual framework for analysis of demand management options
6
CRC for Irrigation Futures
At the farm level this study used a hypothetical farm with total area of 440 hectares in
the Murrumbidgee Catchment to evaluate the farm-level impacts of reducing water
demand. Representative farm models were developed to capture the nature of
agricultural system in the study area. A standard farm budgeting framework was
adopted to consider changes in water availability and associated farm adjustment
responses. The economic models were solved on the basis of annual allocation
availability under different demand management scenarios. Effects on whole farm
gross margin and net farm income essentially measure the impacts on the income
generation capacity of the representative farms. This study had a short-term focus and
was undertaken under the assumption of relevant price range and relatively inelastic
demand for water. It is assumed that farmers respond to reductions in water availability
by changing their crops mix to make the best use of the available water or by adopting
various on-farm water-saving irrigation technologies. In the absence of sufficient water,
crops can be grown with deficit irrigation or replaced with a dryland enterprise to offset
some of the income loss and if water is in excess it will be traded.
2.3
Water Saving Scenarios
Both the farm level and system level analyses of demand management options
presented in Section 1.5 were carried out under the following two scenarios:
•
10% reduction in surface water use
•
20% reduction in surface water use
2.4
Results and discussions
2.4.1 Farm-level analysis
(i)
Market based reduction in surface water demand
Market based reduction in surface water demand assumes that farmers will reduce the
demand of water, approximately by 10% and 20%, that can be available for
environmental allocation through the open market or increased production area.
Farmers can trade this available water either to an environmental manager or to other
farmers.
Farm level impact of market based reduction in water demand showed that, compared
to 2000/2001 year farm baseline profit; a 10% decrease in water demand will reduce
the farm profit by almost 5% or $33,458 (Table 1). However, when the surface water
demand was reduced by 20%, the farm income was decreased by almost 12% or
$78,973 (Table 2). Overall, with the market based reduction of 10% and 20% of surface
water demand, the farm has additional 222ML and 443ML of water that can be traded
to improve the seasonality of flows or to grow “higher value crops”.
The water can be traded temporarily or permanently depending on the water prices and
requirements. The temporary water trading prices ranged between $45/ML to $200/ML
during 2005, depending upon the seasonal allocation, quantity and time of water
trading (CICL, 2005). The permanent water trading prices ranged between $800/ML to
$1,600/ML (MIA, 2005; CICL, 2005). If the farmer saves 443ML of water (Table 2) and
mutually trades it in temporary water market at $200/ML, than he can receive $88,525
of additional income. On the other hand, if traded in permanent market, the price per
ML can be as high as $664,500.
CRC for Irrigation Futures
7
Table 1. Comparison of change in area, income and water use of possible
demand management options at farm level after a reduction of surface water
demand by 10%
Water demand (ML)
Irrigation demand
management options
Surface
Ground
water
Available
water
Farm
income ($)
Change in
income ($)
Baseline
2,700
00
00
651,656
Market based reduction
2,473
00
222
618,198
-33,458
Conjunctive water use
(groundwater abstraction)
2,473
222
222
649,125
-2,531
Conjunctive water use
(ASR)
2,473
222
222
642,828
-8,825
Spreading water demand
with new cropping mix
2,473
00
222
662,450
10,794
Water saving irrigation
technologies
2,257
00
461
624,551
-27,105
(ii)
Conjunctive water use including aquifer storage and recovery
The calculation of pumping and recovery costs was based on specifications of the most
commonly used groundwater bores in the area. The cost of pumping and recovery
depends on groundwater depth and the type of aquifer recharge methods. Depending
on the preferred option for ASR development program, the cost estimates show
considerable variations; ranging from $35/ML to $333/ML. The current pumping cost,
without aquifer storage, is about $35.29/ML. However, with 10% and 20% increase in
groundwater use without the aquifer recharge, the estimated increase in pumping cost
is $2.5/ML and $5.75/ML, respectively. The estimated cost of aquifer storage and
recovery using infiltration basin ranges between $57/ML to $126/ML, depending on the
location; while the cost of aquifer storage and recovery using injection well is ranging
between $111/ML to $333/ML. Infiltration basins are a more economically feasible
option compared to injection wells.
(a) Conjunctive water use (groundwater abstraction only): The impact at farm
level of a decrease in peak water demand by 10% or 222 ML and increase in
supplemental ground water supply shows a decrease in farm profit of almost 0.4% or
$2,531 compared with the base year 2000/01 (Table 1). However, when surface water
demand is reduced by 20% or 443 ML and supplemental groundwater increases by the
same amount, the farm income decreases by 1% or $6,498 (Table 2).
(b) Conjunctive water use (injection/infiltration + extraction): This case is based
on the assumption that during the winter season the excess water will be recharged to
the aquifer via infiltration basins, and that water will be extracted during the summer to
compensate for reduction in peak diversions from the river. The estimated average cost
of infiltration and extraction through infiltration basins is about $67.5/ML. A reduction in
peak water diversion of 10% and a corresponding increase in supplemental
groundwater supply from ASR show a decrease in the farm profit of 1.4% or $8,828
(Table 1). On the other hand, when the surface diversions are reduced by 20% with a
corresponding increase in supplemental groundwater supply, farm income decreases
by 2.7% or $17,716 (Table 2)
8
CRC for Irrigation Futures
Table 2. Comparison of change in area, income and water use with possible
demand management options at farm level after a reduction of surface water
demand by 20%
Water demand (ML)
Change in
income ($)
Irrigation demand
management options
Surface
Groundwater
Available
water
Baseline
2,700
00
00
651,656
Market based reduction
2,252
00
443
572,683
-78,973
Conjunctive water use
(groundwater abstraction)
2252
443
443
645,158
-6,498
2252
443
443
633,940
-17,716
Spreading water demand
with new cropping mix
2252
00
443
635,766
-15,890
Water saving irrigation
technologies
2,257
00
461
624,551
-27,105
Conjunctive water use
(ASR)
Farm
income ($)
(iii) Spreading water demand with alternate improved cropping mix
The objective of optimization under this option was to find an alternative mix of
summer-winter crops that uses 10% or 20% lesser water. The optimization results
indicates that with a 10% reduction in surface water diversions, farm income can be
successfully compensated with an alternative cropping mix that relies on high value
and less water intensive crops e.g. maize, wheat, canola, soybean etc . Results show
that the total farm income increases by about 1.7% or $10,794, while the water saving
is about 222 ML/year, with a reduction in peak summer diversions of 8.25% (Table 1).
When we restrict the demand of irrigation water by 20%, the model shows a reduction
in farm income of 2.44% or $15,890. This is due to high transaction costs of shifting
from one crop to another and considerable amount of water reduction at the farm-level.
The total water saving is around 443 ML per year, which may reduce the peak summer
water diversions by 16.5% (Table 2).
(iv) Increased end use efficiency (Water saving irrigation technologies)
Two on-farm water-saving irrigation technologies -drip and sprinkler irrigation - to
increase on-farm water use efficiency. Drip irrigation was selected for horticultural
crops, vines and citrus, while sprinkler irrigation was selected for major summer, winter
and vegetable crops. The farm-level analysis shows that farm income would reduce by
4.15% or $27,105 with a reduction of surface water demand and adoption of on-farm
water saving irrigation technologies. This income reduction is caused by the investment
in water-saving irrigation technologies. However, water-saving from improved irrigation
technologies will make an additional 416 ML of water available to the farm which will
reduce the peak demand by 15%. This amount can either be traded or used on
additional cropland (Table 1).
2.4.2 System level analysis
The system level analysis was carried out to analyse both on-farm and off-farm impact,
as a whole, of each irrigation demand option implemented in MIA and CIA irrigation
system collectively.
CRC for Irrigation Futures
9
For canal lining, bentonite was selected as lining material based on previous research
on its efficiency and cost effectiveness (Pratt Water and Khan et al., 2004b). The model
estimates show that the required capital investment is about $133,733/km; which
translates into the capital investment of water saved is about $1,713/ML with a present
value of $165/ML. Therefore, to save about 200 GL of water per year by improving the
conveyance efficiency to 85%, an investment of about $33 million/year is required over
20 years.
For en-route storages, the model estimate shows that construction of three 50 GL
storage facilities or one 250 GL storage facility could be a feasible option. After
accounting for seepage and evaporation losses, three 50 GL of above-ground storage
reservoirs would help reduce the peak diversions by 119 GL (8.5%); whereas the 250
GL en-route storage would enable a reduction in peak diversions of 203 GL (14.5%)
after accounting for seepage and evaporation losses.
The estimated capital investment for three 50 GL storages and one 250 GL storage is
approximately $75 million and $115 million, respectively, with an annual operating cost
of about $2.0 million. The annualised capital investment for three 50 GL storage is
about $4.58 million, whereas the annualised capital investment for 250 GL storage is
about $7.02 million over a period of 35 years.
To effectively compare various proposed demand management options, all costs and
benefits were annualised. Table 3 and Table 4 show the comparison of agricultural
return and water use of baseline conditions with the possible demand management
options, after reducing the surface irrigation water demand of the system by about 10%
and 20%.
The results show a trade-off between water saving and agricultural returns. It is
possible to save over 200 GL of water from a total of 1,400 GL of total diversions in
2000/2001. However, the implementation of these measures will require an appropriate
private-public investment to implement water saving technologies, canal lining or
construction of en-route storage.
The comparison between management options shows that spreading water diversions
through improved cropping mix in harmony with appropriate soil and climatic conditions
is the best irrigation demand management option. The new crop mix shows a positive
gain in agriculture returns of $5.49 million after the reduction of 10% demand of surface
water (Table 3) while a loss of $4.79 million is incurred if irrigation diversions are
reduced by 20% (Table 4). These results also show that alternative cropping mix
requires 216 GL less water when compared to 2000/2001 water use (1400GL). Figure
4 compares monthly demand for water with baseline conditions and new crop mixes for
the MIA. Conjunctive water use through more groundwater extraction or infiltration and
extraction is also a realistic option capable of securing over 215 GL of water compared
to the 2000/2001 water year with a minimum cost to agriculture. To secure 215 GL of
water through groundwater extraction it would cost only $3.23 million in terms of
reduced return from agriculture; but it would cost around $8.96 million to save the same
volume of water through the ASR development program (Table 4).
Canal lining is the most expensive option to recover additional water for environmental
purposes because of high labour and material costs. However, this option is still
feasible and capable of providing over 215 GL of water to satisfy the long term
environmental demand.
10
CRC for Irrigation Futures
Table 3. Comparison of water use and income of baseline conditions with
proposed demand management options at system level after reduction of
surface water demand by 10%
Gross
return
Benefit or
loss to
agriculture
Constru
-ction
costs
Surface
water
use
Ground
water
use
Total
water
use
Available
water
($M)
($M)
($M)
(GL)
(GL)
(GL)
(GL)
Baseline
292
0
0
1399
0
1399
0
Voluntarily reduction
in surface water
supply
276
-16.14
0
1285
0
1285
114
Groundwater
extraction only
291
-1.26
0
1285
114
1399
114
Groundwater
infiltration +
extraction (ASR
development)
288
-4.49
0
1285
114
1399
114
Spreading water
demand with
improved cropping
mix
297
5.49
0
1282
0
1282
116
Increase system
efficiency
292
0.00
19
1399
0
1399
114
Increase end use
efficiency
284
-7.89
0
1217
0
1217
183
Substitute water use
(En-route storages)
292
0.00
5
1399
0
1399
119
Scenarios
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11
Table 4. Comparison of water use and income of baseline conditions with
proposed demand options at system level after a reduction of surface water
demand by 20%
Scenarios
Gross
return
Benefit or
loss to
agriculture
Constru
ction
costs
Surface
water use
Groundw
ater use
Total
water
use
Available
water
Baseline
292
0
0
1399
0
1399
0
Voluntarily reduction
in surface water
supply
255
-36.82
0
1183
0
1183
216
Groundwater
extraction only
289
-3.23
0
1183
216
1399
216
Groundwater
infiltration+
extraction (ASR
development)
283
-8.96
0
1183
216
1399
216
Spreading water
demand with
improved cropping
mix
287
-4.79
0
1182
0
1182
216
Increase system
efficiency
292
0.00
36
1399
0
1399
216
Increase end use
efficiency
281
-11.61
0
1156
0
1156
243
Substitute water use
(En-route storages)
292
0.00
7
1399
0
1399
203
200,000
Water use (ML)
160,000
120,000
80,000
Baseline
2010
2020
40,000
2005
2015
Jun
May
Apr
Mar
Feb
Jan
Dec
Nov
Oct
Sep
Aug
Jul
0
M onth
Figure 4. Comparison of monthly demand for water between baseline conditions
and new crop mix achieved over 20 years for MIA
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CRC for Irrigation Futures
2.4.3 Sensitivity analysis
Sensitivity analysis of total monthly crop water requirement (CWR) and net economic
returns was conducted separately by varying two variables; area under rice crop and
the area under vine crop and keeping all other crop areas constant. A random uniform
distribution of both variables was assumed and minimum and maximum limits were
specified. The two variables are randomly varied about their distributions drawn
between minimum and maximum values. The sensitivity analysis indicates that CWR is
understandably more sensitive to area under rice than that of vines while net economic
returns behave conversely (Figures 5 and 6). For example, there is 95 percent
reliability (95% confidence bound) that change in the rice area by ±15 (i.e. current
percent area ± 15) results in possible change in peak (in January) of CWR between
196.5 GL and 382.5GL as compared to the peak CWR of 289 GL of the current
cropping pattern.
Similarly the corresponding change in net system level return remains between $255
million and $335 million. Hence it can be envisaged that reduction in the rice area by
15% will reduce the peak summer water demand for the month of January by
maximum 32% and an overall demand reduction by maximum 26% which is equivalent
to 362 GL. This water can be made available for trading or local increased production.
Baseline
50%
75%
95%
100%
Total Monthly CWR (ML)
400,000
300,000
200,000
100,000
0
Jul
Oct
Time (Month) Jan
Apr
Jun
Figure 5. Sensitivity of monthly CWR of the MIA and CIA to 15 percent change
in area of vines within 50%, 75%, 95% and 100% confidence bounds
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13
Baseline
50%
75%
95%
100%
Total Monthly CWR (ML)
400,000
300,000
200,000
100,000
0
Jul
Oct
Time (Month) Jan
Apr
Jun
Figure 6. Sensitivity of monthly CWR of the MIA and CIA to 10 percent change in
area of vines within 50%, 75%, 95% and 100% confidence bounds
2.5
Conclusions and recommendation
2.5.1 Conclusions
An integrated hydrologic-economic modelling approach is used to determine the
economic costs, associated water saving and possible reduction in river diversions
under possible irrigation demand management options. The results show that there is a
trade-off between peak demand reduction and agricultural income. However, the extent
of trade-off depends upon the type of demand management option. For example,
securing 215 GL of water for environmental purposes through alternative cropping mix
incurs a cost of $4.79 million/year from agricultural return compared with canal lining
which costs $35.68 million/year in investment to save the same amount of water.
Spreading water demand through new crop mixes are the most cost-effective irrigation
demand management option for improving the seasonality of flows. Conjunctive
surface–groundwater use is another attractive option to make additional surface water
available for the environment during the peak demand months. Although increasing onfarm water use efficiency is in the farmer's own self-interest, it would also help increase
stream flows. This option would require farmers to invest $303/ML for drip irrigation and
$83/ML for sprinkler irrigation.
2.5.2 Recommendations
On the basis of above findings, it is recommended that improved cropping mix should
be encouraged considering appropriate soil and climatic conditions. The alternative
crop mix must entail less water intensive crops in summer and emphasise winter crops.
However, this option may need structural adjustment and incentives to assist in the
transformational process and appropriate market development for alternative crops.
14
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Conjunctive water use by either additional extraction or infiltration and extraction is a
feasible demand management option. A well coordinated and integrated management
of surface and groundwater would help optimise the use of rain, river and groundwater
resources. Market based reduction in water demand also provides an alternative for
improving seasonality of flow in the river. However, it needs to be supported by a very
well established water market.
As the existing infrastructure becomes increasingly old and obsolete, opportunities for
infrastructure modernisation will arise to adopt new technology in canal automation,
lining and related water saving technology. The associated water saving can be used
to improve the seasonality of flow in the rivers. Infrastructure modernisation will entail
considerable investment which can be raised through both private and public sources.
This however will require innovative investment models involving private and public
sectors which will also ensure adequate return and equity.
Both off and on farm level capital investments are possible either by utilising the saved
water on higher value crops or by including saving costs to the overall water supply
charges with a proportionate cost sharing arrangement. There is a need to reduce the
break-even period by considering “leasing of water” by the government from farmers
for the environment at around $300/ML for a fixed period of 5 to 10 years. Such an
arrangement will require sophisticated market models to ensure adequate return to
farmers while avoiding market distortions. Unless water saving cost and benefits are
shared by all beneficiaries the “real water savings” are not possible.
Another possible incentive for achieving water savings may be through unbundling of
water entitlements to allow for differential levels of security to provide “preferential
access rights” to saved water to those investing in water saving technologies. This will
help remove barriers to the adoption of irrigation technologies, move farmers and
irrigation area to next level of the irrigation efficiency ladder, reduce local and regional
environmental impacts and secure water for better ecological outcomes.
3.
Harmonising the Distribution System
The main aim of this project component is to examine the current technological position
of irrigation distribution in Australia with a view to determining opportunities for
improving system harmonisation. As such, it is intended to scope three key knowledge
areas: (1) Identification of flow control technologies in Australia, (2) review of state-theart modelling in canal operation modelling; and (3) identification of opportunities for
adoption of canal automation technology to improve harmonisation of the on-off farm
interface.
3.1
Methodology
The state-of-the-art analysis is based on a survey of irrigation providers across
Australia designed to gain a better understanding of the predominant technology used
in hydraulic infrastructure for irrigation and their future plans for infrastructure
upgrades.
A questionnaire was sent to all participants in the ANCID (2005) benchmarking
assessment as this represents the most comprehensive list of irrigation providers
across the country. The questionnaire was designed to complement the ANCID’s
survey in the area of canal automation, and as such, it only included specific questions
about the type of hydraulic infrastructure and hydraulic control used in their systems.
Sixty four irrigation providers received the questionnaire of which 46 answers (72%)
CRC for Irrigation Futures
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were returned. This represents a total of 1.65 million ha out of a total area of 2.5
million ha of irrigation quoted by the ABS survey (ABS, 2005) with a total intake
volume of 5,400 GL.
The review of canal operation modelling is a desk-top study based on a comprehensive
literature review of the models published in the scientific literature and unpublished
reports, with a specific focus on Australian systems. This review focuses on a
description of the main features of existing models and their capability to simulate canal
operation responses. The review places less emphasis on the detailed numerical
techniques and schemes employed in the model to deal with the solution of the
governing equations and other mathematical process.
3.2
Results and discussions
3.2.1 Irrigation infrastructure
Most of the water used in irrigation is supplied by open channel systems or a
combination of open channel and pipe systems. Twenty three percent of the systems
surveyed rely entirely on open channels for water supply while 55% rely on a
combination of open channels and pipes and the remaining 22% are pipeline systems.
These figures, however, do not reflect the relative capacity in these systems. The
aggregate intake capacity of the channel systems accounts for 94% of the 62,224
ML/day included in the systems surveyed. By and large, pipeline systems are used in
systems under 8,000 ha in area. Mixed systems often have most of the conveyance
infrastructure in open channels with small sections or lower sections of the system in
pipelines.
(i)
Conveyance:
The type of conveyance – open channels or pipelines – determines to a large extent
the flexibility of service provision. In general, pipe systems are hydraulically more
efficient than open channels and are capable of faster reaction to changes in demand.
In contrast, closed systems incur higher costs of installation than open system, in
particular unlined channel systems of a similar capacity.
Most of the water used for irrigation in Australia is supplied by open channel systems or
a combination of open channel and pipe systems. Twenty three percent of the systems
surveyed rely entirely on open channels for water supply while 55% rely on a
combination of open channels and pipes and the remaining 22% are pipeline systems.
These figures, however, do not reflect the relative capacity in these systems. Open
channel systems account for 4,300 GL (80%) of the 5,300 GL and 94% of the 62,224
ML/day of intake capacity of the channel systems accounts included in the survey.
Most of the pipeline systems are used in systems under 8,000 ha in area. Mixed
systems often have most of the conveyance infrastructure in open channels with small
sections or lower sections of the system in pipelines. Furthermore, the vast majority of
pipeline systems operate under low pressure.
(ii)
Canal lining
A small proportion of canals are lined. Concrete is the main lining material used in
Australian irrigation systems although clay and plastic compounds (PE) are used in a
few cases. The proportion of lined canals differs widely between main and secondary
canals although the aggregate length of lined main canals only represents 2% in the
participating systems, while for secondary canals this figure is only 0.5%.
(iii)
Hydraulic control
The ability to provide a flexible irrigation service is critically dependant on the hydraulic
infrastructure to control water in open channels. The appropriate selection and
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combination of regulating structures in the main canal and offtake structures
determines the controllability of the canal system, that is, how the system responds to
fluctuations in demand and supply. These create transient conditions in canal system
which can limit the ability to provide flexible and accurate water supply.
Two important hydraulic concepts are useful in understanding the implications of
selecting the appropriate type of structures: Sensitivity (S) and Hydraulic flexibility (F).
Sensitivity is used to express the change in discharge caused by a unit rise in
upstream head while flexibility describes the distribution of flows resulting at canal
bifurcations according to the hydraulic properties of the flow control structures. A
description of the predominant type of structures in Australian irrigation systems and
their flexibility is discussed below
(a)
Method of canal regulation: Canal distribution systems in Australia use
mainly overshot regulators to control water level. Eighty percent of the systems
surveyed use either overshot regulators or a combination of overshot and undershot
regulators. Those using a combination of both types of structures account for nearly
60% of the systems. It was not possible to obtain a breakdown from the survey how
the structures are combined.
Most secondary and spur channel systems (70%) are equipped with undershot inlet
structures. When combination of structures between main canal and corresponding
lateral or spur inlets are considered, 50% of the combinations include main canal
overshot regulators with undershot secondary or spur inlets. This combination favours
a more stable operation of the channel system under conditions of discharge
fluctuations often present in systems operated on the basis of farmers’ orders. Twenty
five percent of participating providers indicated the opposite combination which has a
greater Flexibility Factor (F >1) and greater tendency to magnify the propagation of
fluctuations in the downstream direction.
Sixty percent of the systems surveyed indicated that operation of the main canal
structures is done manually while the rest are operated either mechanically or by a
combination of manual and mechanical devices. For secondary canals the proportion
of manually operated structures is slightly higher (64%). This trend is consistent with
the fact that main canal structures are normally modernised before lower rank canals.
Nearly all mechanically operated systems are by motorised actuators, except for an
instance of hydraulic automatic AVIO1 gates.
(b)
Methods of structure control: This section discusses the predominant
type of hydraulic control used in main, secondary and spur channels. Channel systems
and closed (pipeline) systems are classified as locally or remotely operated. Locally
operated structures are controlled on-site. Remotely controlled systems are operated
from a control centre and are usually termed Supervisory Control. Remote operation
provides operators with a number of advantages including real-time operation of the
system structures to maintain canal levels at a specified optimum and other
organisational management opportunities.
In recent years, several irrigation systems in Australia have incorporated remote
operation through SCADA systems. As expected, adoption of SCADA systems has
become more common in main canal regulators than in secondaries and spurs. Forty
six percent of the irrigation providers surveyed have equipped the main channel
regulators with remote control mechanised structures with a further 34% having
partially converted to remote control systems. A similar analysis of the same systems
for secondary and spur channels shows that 67% of structures are manually controlled
with only 33% having some degree of automation.
1
Automatic hydraulic gates designed to maintain constant downstream water level.
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(iv)
Canal flow monitoring
The ability to evaluate the operational performance of distribution systems is critically
dependent on the quality of operations monitoring. Canal flow is monitored manually in
the majority of the irrigation systems surveyed. Twenty five out of the 27 canal systems
carry out their flow monitoring manually whilst the remaining two systems that are
equipped with SCADA control are able to monitor canal flow remotely and more
frequently.
Seventy percent of the irrigation providers reported monitoring daily flow monitoring
and the remaining 30% monitor canal flows twice-daily. The high percentage of single
daily observations correlates well with the predominance of manual monitoring systems
which limits the ability to monitor flows more frequently.
Improved harmonisation of the interface between distribution and farm systems entails
rapid responses to on-farm demand which can cause greater fluctuations in channel
systems. The ability to monitor and correct these fluctuations in real-time are critical to
control these system responses to satisfy service delivery objectives; a task very
difficult to carry out in systems monitored and operated manually.
(v)
Flow metering
Most irrigation providers (90%) meter their water delivery from canal and pipeline
systems. A variety of flow meters are used for this purpose including Dethridge meters,
magnetic flow meters and other mechanical devices. Several irrigation providers, in
particular those who are in the process of upgrading from the traditional meter wheel to
other devices, use a combination of devices, Dethridge meters are used in 18 systems
surveyed (39%) and Magflow meters are used in 17 systems (37%) usually in
combination with other systems. Use of a single type of meter such as Dethridge
meters was reported by only 2 irrigation providers while only 4 irrigation providers use
Magflow meters exclusively. Arrays of other devices or methods were reported by 9
irrigation providers (20%). Several providers have indicated they are progressively
replacing Dethridge meters by other more modern meters including Magflow and Mace
meters as part of their upgrade plans. Channel escapes and other structures are being
progressively equipped with metering devices to account for drainage and residual
flows.
(vi)
Pipeline control
Combined mechanical and remote control of distribution systems is more prevalent in
pipeline systems than in canal systems. Eight of the 20 pipeline systems surveyed are
both mechanically and remotely controlled at the same time. The remaining 12 systems
are manually and locally controlled.
Farm outlets in pipeline systems are predominantly manually operated by irrigators.
Seventeen out of the 19 pipeline systems surveyed exhibit outlets locally controlled by
irrigators. This is consistent with the fact that pipeline systems are better suited to
provide water on-demand or under short notice (near on-demand).
3.2.2 Infrastructure upgrades and system harmonisation
(i)
Recent upgrades
Adoption of canal automation technology in Australia is still limited. Canal automation
offers one of the best options for achieving harmonisation of the interface between
distribution and farm systems.
Table 5 shows the respondents’ perception of the main achievements from past
upgrades. A large proportion of irrigation providers (52%) have undertaken some form
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of infrastructure upgrade in the last five years. The main types of upgrade include
conversion from open channels to pipelines, rehabilitation of decayed infrastructure
often combined with some form of channel automation or a combination of minor
works.
Table 5. Irrigation provider’s assessment of upgrade benefits
Achievements
Percent (%)
Recent Upgrades
Future Upgrades
Improved level of service
43
43
Service cost reduction
28
43
Improved canal pool control
35
30
Improved water management
41
43
Improved Customer communication
26
26
Reduced OH&S risks
41
41
Reduced outfalls
30
30
Water saving
46
50
Alteration of current environmental impacts
30
35
Environmental sustainability
26
28
The median cost of upgrade per hectare was $72.0/ha ranging widely from as low as
$10.0/ha up to $2600/ha. Twenty eight irrigation providers (60%) plan to execute some
form of upgrade in the next five years, of which 64% are designed to upgrade the entire
system while the rest are intended to upgrade part of the system. Twenty planned
upgrades in the next five years form part of continuing process of upgrade which has
started in the past five years. The planned upgrades include a wide range of
infrastructure works such as channel remodelling, replacement and conversion from
canal to pipeline systems, improved metering and conversion from local to remote
monitoring and control.
It is also important to observe that a large number of irrigation providers intend to carry
out infrastructure investments in the next few years. This provides important
opportunities for planning these interventions in the context of improved system
harmonisation. As observed above, improved level of service together with water
saving and improved water management are the key drivers for infrastructure
investment.
Better integration between the distribution system and the on-farm system can improve
efforts to achieve system harmonisation by bridging the interface between canal
operation and on-farm operation. Large irrigation distribution systems like those the
predominate in South-East Australia present clear and more significant opportunities
for achieving better harmonisation through this type of interventions given their longer
travel time between dam releases to farms.
3.2.3 Canal operation modelling
Hydraulic modelling can play an important role in the design of new channel systems or
an upgrade of existing ones. Hydraulic models are also useful for training operation
personnel to better understand channel system responses to various operational
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interventions. Hydraulic models are used to simulate the effects of various design and
operational scenarios in canal systems and to “virtually” establish comparisons
between alternative strategies.
There are two main modelling approaches to canal operation:
•
Hydrodynamic modelling (or traditional hydraulic modelling)
•
System identification modelling
There is no evidence that hydraulic models have been used in planning recent upgrade
projects either as design and planning tools or as evaluation tools. The full details of
the modelling review are available in the main report of improved seasonality of flows
through irrigation demand management and system harmonisation.
3.2.4 Innovations in canal automation in Australia
Real time monitoring and control technology offers the best prospect for achieving full
controllability of the canal system. This technology involves the use of intelligent control
logic to respond to changes in water level in the canal pools that result from changing
flow rate and depth. Rubicon SystemsTM has developed and tested this technology
which can achieve near-on-demand channel control and deliveries. The control logic is
based on a System Identification approach which models the behaviour of the system
based on system observed data and can adjust it to maintain near constant water
levels despite fluctuations in demand and supply (Weyer, 2001). This technology
allows service providers to retrofit existing canals designed for upstream control to
deliver a higher level of service. An alternative approach to achieve a similar level of
service would be to redesign the canal system to operation in downstream control
mode. Such a conversion is very expensive since it requires dead-level canal pools.
There are two main companies providing these products with slightly different features:
Rubicon Systems have designed and tested a hardware-software system based on
integrated control of cross regulators and farm off takes using a purpose designed
control logic based on system identification. AWMATM supplies hardware for control of
cross regulators and farm off takes which can be fitted with SCADA remote control.
3.2.5 System upgrade and system harmonisation opportunities: A vision
Most irrigation distribution systems in Australia require significant upgrade to achieve
system harmonisation objectives either by implementing channel automation or
pipeline technology together with appropriate intelligent monitoring and control
systems. These technologies, however, have not been widely adopted to date. The
high cost involved with any of the technologies often can only be justified if significant
productive and environmental benefits accrue in addition to improved level of service
by the irrigation provider.
(i)
On-off farm interface
Canal automation in its various forms can make a significant contribution to
harmonising the on-off farm interface. Nevertheless, canal automation systems have
developed to operate largely in isolation of the on-farm system. There are critical
synergies that can benefit from the integration of the distribution and on-farm system to
harmonise the interface between service provision and on-farm irrigation. This can only
be achieved by improving the integration between the on-farm and off-farm water
control systems through the use of extensive on-farm monitoring and communication
systems. Figure 7 shows the main element of a whole-of-system approach to on-off
farm system harmonisation.
An ideally harmonised system would integrate the demand and dispatch of water from
the source to the consumption point to satisfy high level of service to users in the most
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cost-effective manner. Users in this context include agriculture and other nonconsumptive uses and environmental demand. This aim can only be attained by fully
integrating demand and supply schedules across all the segments of the system: Farm,
distribution and source (surface water and groundwater).
Figure 7. Main elements of a whole-of-system approach to on-off farm system
harmonisation
(ii)
Planning and evaluation of canal automation
A review of the literature on canal automation in Australia reveals a paucity of research
into the development of clear planning and evaluation criteria for adoption of canal
automation or systems upgrade in general. Two research gaps become evident:
Technological assessment of systems available in the market, and criteria for
assessment of costs and benefits associated with canal automation. Equipment
manufacturers carry out routine reliability and functionality tests as part of their normal
development process. There is however a paucity of field performance data under a
range of field operational conditions.
Benefits from canal automation are a key factor in determining the adoption of this
technology. It is obvious that benefits from canal automation may accrue at different
levels in the system. The primary focus of canal automation is the ability to control the
operation of the canal system. This constitutes the main direct benefit to the irrigation
authority. There are, however, a number of other benefits which flow at different scales
in the system. Improved and faster response to water delivery can bring benefits at the
farm level by improving crop productivity and reduced environmental impacts. At a
catchment level, improved operation control can provide important benefits in two
areas: (a) more accurate water accounting; (b) improved control of environmental instream services, and (c) reduced volumes of outfalls. At present, a framework for
evaluation of benefits and costs at various scales across the catchment is lacking.
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3.3
Conclusions and recommendations
The main aim of this study is to examine the current technological position of irrigation
distribution in Australia with a view to determine opportunities for improving system
harmonisation. As such, it was intended to scope three key knowledge areas: (1)
Identification of flow control technologies in Australia, (2) review of state-the-art
modelling in canal operation modelling; and (3) identification of opportunities for
adoption of canal automation technology to improve harmonisation of the on-off farm
interface.
The analysis of various canal technologies shows that channel distribution systems rely
largely on traditional technologies for water control; and despite that new technologies
developed both in Australia and overseas have become readily available in past
decades, the level of adoption still remains low.
The study reveals that the vast majority of Australian systems (78%) rely on open
channels or a combination of open channels and pipelines for distribution of water to
farmers. Only 22% of systems rely only on pipelines for water distribution. In terms of
system capacity, open channels account for 94% of the systems surveyed. A similar
picture emerges regarding the use of canal lining. A small proportion of main canal
systems (2%) are lined. Concrete remains the main lining material despite new
membrane materials becoming available in recent years.
Canal regulation is achieved mainly by a combination of overshot cross regulators on
the main canal and undershot structures in lateral and spur outlets.
A large proportion (60%) of these main canal regulators are still manually operated,
while this figures is higher (64%) in secondary canal structures. 46% of the systems
surveyed have equipped the main canal regulators with remote control mechanised
structures. This figures drops to 33% for secondary canals the incorporate some kind
of remote control operation.
There is increasing diversification in technology used for flow metering. Thirty nine
percent of systems surveyed rely only Dethridge meters. Magflow meters are used in
37% of systems surveyed in conjunction with an array of other metering devices. The
adoption of new metering technology is driven by more accurate flow measurement
and ability to use SCADA technology.
A large proportion of irrigation providers (52%) surveyed have undertaken some form
of infrastructure upgrade in the last 5 years which often includes some form of
infrastructure refurbishment combined with channel automation. This figure increases
to 60% of irrigation providers which plan to undertake system upgrades in the next 5
years. In both cases, they named improved water management and water saving as
high priority objectives. There is little evidence that there is sufficient monitoring and
evaluation of system upgrades to determine whether these objectives are achieved.
Furthermore, these objectives are exclusively focused on benefits to irrigation
providers. There is no evidence that actual on-farm and catchment impacts arising from
canal automation are either identified or evaluated.
A comprehensive review of canal operation models was also undertaken which reveals
a wide array of computer models available to simulate the operation of canal systems.
However, the use of these models still remains largely in the research domain.
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3.4
Recommendations
The various forms of available canal control and automation technology can make a
significant contribution to the harmonisation of the on-off farm interface. However, all
efforts to date have focused primarily on the canal distribution system in isolation of the
on-farm system and the river operation system. There are critical opportunities
provided by modern control and communications technology to harmonise the
operation of the three system domains: River-distribution-farm systems.
•
Canal automation together with modern control and communications
technology represents the best and most obvious opportunity for advancing
harmonisation of the three system domains: River, distribution and farm
systems. Based on this, it is therefore recommended that the various forms
of canal automation technology that are available should be adopted at all
levels of river, canal and farm water control.
•
The future efforts in canal automation should emphasise the integration of
the farm, distribution system and river system to maximise the benefits to
agricultural production and provision of environmental in-stream
requirements.
•
As a matter of urgency, systematic research is necessary to evaluate the
impacts of canal automation technology at farm, system and catchment
levels of current pilot projects. Learned lessons from existing case studies
can contribute to maximise the benefits and avoid mistakes in future canal
automation projects.
4.
Framework for Assessing Social Acceptability of
Management Options
The main aim of this project component is to explore ‘community’ involvement in setting
irrigation research agendas and evaluating water management options in the
Murrumbidgee Valley. Particularly, to involve stakeholder in identification of possible
demand management options from a range of options and gauge their acceptability.
4.1 Methodology
(i)
Stakeholders involvement
Key stakeholder groups in the region were involved in the identification of possible
irrigation demand management options. Two key stakeholders’ workshops were
organised to discuss the possible irrigation demand management options and their
perceived benefits.
The first meeting was held in Leeton in April. Invited participants included local water
distribution company managerial staff, state agency employees, representatives from
the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the
Murray-Darling Basin Commission (MDBC), university irrigation researchers, plus two
irrigators. The workshop participants mostly represented those with a dominant interest
in irrigated farming productivity and profitability, although it is recognised that people
may hold many values. The specific aims of the first meeting were to:
•
Develop draft criteria for assessing water demand management projects/ideas’
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•
Share project ideas between the research team and other (i.e. community)
experts, and
•
Assess the proposed ideas against the draft criteria developed in item 1
A second meeting was held in Griffith in March 2005, with the same invitation list. The
options under consideration at the second meeting were similar; however this time
were to discuss the irrigation demand management options and their perceived
benefits. The options include (i) market based reduction in surface water demand; (ii)
conjunctive water use augmented by aquifer storage and recovery; (iii) spreading of
water demand with improved cropping mix; (iv) increase conveyance efficiency (canal
lining); (v) increase on-farm water use efficiency through water-saving irrigation
technologies; and (vi) en-route storages, substitute water use period by storing water
along the river.
(ii)
Social acceptability, a theoretical framework
The dissemination of agricultural research outcomes in Australia has been strongly
influenced by the ‘diffusion’ model. Diffusion is defined as the process by which an
innovation or new idea is tried and adopted within a target practitioner community
(Surry 1997). In the diffusion model both the features of the innovation, and the
individual traits of members of the community within which the transference of ideas is
occurring, are important (Rogers 1995). The diffusion model works particularly well for
new or improved technology developed specifically to improve short term farm
profitability or productivity. Because the transference of ideas in this model is
anticipated as coming from scientific or technical experts to practitioners the main role
for other stakeholders, such as farmers, is that of passive receivers. The assumption
underpinning the diffusion model is that the innovation is good for the recipient
stakeholders, so if diffusion (uptake) is slow it is a result of ‘barriers’ to adoption. In the
diffusion model much effort is placed on identifying and addressing these barriers to
the uptake of the innovation. In other words, the innovation remains constant, while
stakeholder concerns are ‘managed’ to encourage uptake. While the diffusion of
innovations approach is a well established model for agricultural extension, there are
alternative approaches for undertaking and discussing innovative research, including
the consideration of social acceptability of the proposed change(s). Assessing social
acceptability requires a less narrow understanding of information and knowledge
transfer processes because the nature of the innovation is considered to be negotiable
in response to societal opinions. Further, it may be a more suitable model for
understanding how to introduce difficult and or disruptive ‘innovations’ into communities
that rely on production from natural resources.
4.2
Results and discussions
4.2.1 Gauging the social acceptability of different options-phase1
The process used at the first meeting was to develop criteria against which different
irrigation demand management options could be evaluated, before attempting to
assess the project proposals. A workshop approach as described by Spencer (1989)
was used to develop these (draft) assessment criteria. This involved unstructured and
uncritical generation of ideas from all participants (‘brainstorming’) in response to the
question ‘What criteria would you use to judge the effectiveness of a water
management project?’ All the participants then assisted in collecting the responses into
categories or sets and labelling those sets with a heading that reflected all of the
individual responses within it. This resulted in 11 criteria by which participants felt they
could compare and judge options for improved seasonality of flows in the
Murrumbidgee River (Table 6).
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Table 6. Assessment criteria for evaluating improved seasonality of flows project
based on the key stakeholder preference
No.
Criteria
No.
Criteria
No.
Criteria
1
Improved water use
efficiency
5
Significance
9
Economic benefits
2
Demonstrated impacts on
water availability
6
Risk reduction
10
Social benefits
3
Sound stakeholder
processes
7
Equity/fairness
11
Environmental benefits
4
Feasibility
8
Identify costs/ cost
minimisation
Once these draft criteria were developed the participants were asked to share possible
approaches (options) for harmonising irrigation demand with rivers flow regimes. A total
of 7 options were selected by the key stakeholders.
A blank matrix was formed with the seven options on one axis, and the previously
developed criteria on the other axis. Five groups were then formed from within the
workshop participants to assess the options. Each group was asked to assign up to five
points to each box in the matrix, with five points being totally acceptable, and 0 points
being totally unacceptable. Adding the criteria scores provides a ranking of the projects
(one group chose to rank the projects only). The ranking from highest score to lowest
by each group is shown in Table 7.
Each group had a different option at the top of their list; however, there were some
trends worth noting. The conjunctive use of water was ranked 1 or 2 by four of the
groups. Thus, it could be concluded that it had reasonably comprehensive support or
at least participants had some interest in the approach. The Barrage, various forms of
en-route storage and managing evaporation scored either very high or very low, while
the cropping mix and water trading ideas were in the median range for most groups.
Selling water as a service was ranked either last, or not considered, by all groups.
The process of articulating assessment criteria not only allowed considered
judgements about the acceptability of proposals, it also indicated specific areas where
project ideas may need to change to become more socially acceptable. The
conjunctive use of water option scored less well against the criteria of stakeholder
processes, cost minimisation, social benefits and equity than the other criteria,
suggesting that this project could become more acceptable by addressing these
issues.
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Table 7. The seven options for enhancing seasonality of flow and system
harmonisation ranked by the 5 groups of irrigation community members
Group 1
Group 2
Group 3
Group 4
Group 5
Rank
Option
Rank
Option
Rank
Option
Rank
Option
Rank
Option
1
Barrage
1
Conjuncti
ve use
1
Water
trading
1
Manage
evaporat
ion
1
Cropping
mix
2
Conjunct
ive use
2
Barrage
2
Conjunct
ive use
2
En-route
storage
2
Conjuncti
ve use
3
Croppin
g mix
3
En-route
storage
3
En-route
storage
3
Barrage
3
Manage
evaporati
on
4
En-route
storage
4
Manage
evaporati
on
4
Croppin
g mix
4
Water
trading
4
Water
trading
5
-
5
Cropping
mix
5
Manage
evaporat
ion
5
Conjunct
ive use
5
En-route
storage
6
-
6
Water
trading
6
Barrage
6
Croppin
g mix
6
Barrage
7
-
7
Water as
service
7
Water as
service
7
Water as
service
7
Water as
service
Financial incentives or a greater emphasis on involving stakeholders and developing
equitable sharing arrangements, or compensation may be required to make this option
more acceptable. On the other hand the Barrage project idea scored poorly against
efficiency, flexibility, significance, suggesting a niche role rather than a large scale
option for system harmonisation. The cropping mix project idea scored poorly in many
areas, but particularly against the criteria of risk reduction, equity, water use efficiency
and stakeholder processes. If the cropping mix option is to be pursued much more
work with individual and community water users is required to manage risk, ensure
equity and to ensure that there are some water use benefits. Possibly financial or other
incentives would be required to make it score higher in these areas.
4.2.2 Gauging the social acceptability of different options-phase2
By March 2006 some of the options discussed at the initial meeting had been
developed into options that were sufficiently detailed to present to the community
participants again. The options were presented with information about the impacts of
each option under a 10% and a 20% reduction in water demand.
Again the approach used to discuss the options involved a facilitated workshop, this
time based on whether the each, if any, option was worth pursuing, and what issues
were important for each option.
Each of the options was considered as worth pursuing, although it was noted that the
increased system and end use efficiency options were already being explored well in
other projects. The option of spreading water demand with improved cropping mixes
again received a mixed reception by community participants; some stated that this
option was not worth pursuing, while others thought that, while it had some potential, it
was a lower priority for research than the other options.
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4.3
Conclusion and recommendations
It was evident from the two meetings that some options for improving seasonality of
flows in rivers through irrigation demand management and harmonising irrigation
systems with the environment were more acceptable to this group of community
participants than other options. Further, it could be concluded that this acceptability
influenced what participants considered as worthwhile research to pursue. The most
acceptable options for this group were those that involved changes to the delivery of
water to the irrigation district and/or individual properties. The development and coordination of en-route storages and various processes for achieving conjunctive use of
ground and surface water were seen to have the potential to produce some
environmental enhancement with minimal disruption to the irrigation community.
Options which had more direct and potentially negative impacts on individual farmers,
such as spreading water demand with improved cropping mix, were not as acceptable
to the meeting participants. Any future work in this area would need to consider these
findings as a foundation for developing and introducing improved seasonality of flows
and system harmonisation.
The first meeting demonstrated the value of articulating assessment criteria when
dealing with new and potentially disruptive options for management of irrigation
demand in a catchment context. The process of articulating water management
assessment criteria provided a space for people to share their expertise, experience
and anxieties, as well as to contribute in a structured way to the development of a
research project in their area. The assessment criteria developed at the first meeting
were only approximations. As a consequence, a refinement of those criteria through
meetings with different community members would be necessary for them to become a
truly useful tool. However, even as a rough tool the areas of the different options that
requires further work to make them more acceptable to the irrigation community are
clearly articulated.
5.
A Social Benefit Cost Method for Assessing
Improved Seasonality of Flows through Demand
Management
The purpose in this project component was to present the economic aspects of the
project. Particularly, to assess whether it was possible to estimate the social costs and
benefits of irrigation? Such an assessment relied on completeness. In other words,
was it possible to specify all the costs and benefits of irrigation, or as many as possible,
that would result in a reasonable estimate of the net present value of implementing a
range of demand management strategies.
5.1
Methodology
5.1.1 Social Benefit Cost Analysis (BCA)
Social Cost Benefit analysis of a proposed public project is undertaken to help answer
the important question: "Will the project be of net benefit to society?" It is designed to
promote the maximisation of social net benefits, in an economy-wide context (as
opposed to, say, investment analysis conducted by a private firm, which examines
purely the private profitability of some new project). An attempt is made to put all costs
and benefits arising from a project into monetary terms, to enable sensible
CRC for Irrigation Futures
27
comparisons between alternatives. Benefit Cost analysis is usually carried out on a
national level.
Essential characteristics of costs and benefits in economics are that:
•
Costs and benefits belong to particular actions and each decision implies at
least two alternative courses of action (do or not do).
•
Costs and benefits are particular to persons or groups. The same action can
involve different costs and benefits for different people.
•
Costs and benefits involve the future consequences of current decisions, not
what happened in the past and can not be undone.
•
Benefit Cost analysis attempts, as far as possible, to put all costs and benefits
arising from a project into monetary terms, to enable sensible comparisons
between alternatives
In undertaking a benefit cost analysis one usually attempts to gain a complete picture
of all the costs and benefits that arise from a project. Included in that picture are not
only the marketable commodities (valued in a free market) and those marketed in a
corrupted market (where the value is corrected for by using shadow prices), but also for
the non-marketable commodities as well. Non-marketable commodities can be valued
using a variety of tools, such as recreation values being determined by the travel cost
method. However, many others, including the value of ecosystem services, are difficult
to value accurately.
5.1.2 Conceptual issues
Young (2005) argues that the benefits from water can be segregated into: (i)
commodity; (ii) public and private aesthetic; (iii) waste assimilation; and (iv) damages (a
dis-benefit).
Each of these is an economic benefit as they are characterised by increasing scarcity
and allocation issues among competing uses. There may be consumptive uses, such
as those that require extraction from the system, and non-consumptive uses, those instream uses such as hydropower generation and environmental uses. Further, it could
be argued that the aesthetic uses are not part of a social evaluation, as they are
considered non essential and non-rivalrous, and thus do not have a market. It should
be noted that this view is not held by many, but was prevalent during the development
phase of irrigation schemes. It is recognised that rivers act as conduits for depleting
and distributing waste products. This act of waste assimilation not only adds an
externality and public good component to the analysis, but also introduces quality
aspects to the debate (Davidson and Malano, 2005). With damages, it is recognised
that adding something as a waste can be of benefit for others. For instance, farmers
who use waste water from a city may desire the nutrients available in the water. Flood
waters carrying silt is another example. However, the accepted wisdom is that damage
to a river is a cost and thus is a dis-benefit.
Overall, it could be argued that water should be valued first and foremost by what can
be produced from it. In broad terms this means the returns obtained from the output of
commodities produced from it, principally agricultural output. In addition, some
valuation could be derived from the public and private aesthetic uses, such as
recreational use. Both these items should account for both consumptive and nonconsumptive use. Given the nature of Australian rivers, the benefits of waste
assimilation and damage are likely to be negative. As a consequence they can be
considered to be a cost.
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5.2
Results and discussions
5.2.1 The Benefits of Irrigation
(i)
The value from agricultural output
To calculate the net economic returns from agricultural output would seem to be an
easy task. All that is required is to multiply the total production from the region by the
price received and then take away the costs of production. In order to calculate the
gross value per crop it is necessary to know the areas and yields of each crop. The
costs of production are best recorded on a per hectare basis; therefore gross margins
can be effectively calculated on per hectare basis.
All data and the results of calculating the net value of agricultural output in the MIA and
the CIA along the Murrumbidgee are presented in improved seasonality of flows
through irrigation demand management and system harmonisation main report. It was
found that in 2003-04 the net value of agricultural production in the MIA was
approximately $1,475.4 million. In the CIA the value of output was calculated to be
approximately $198.6 million.
(ii)
The value from tourism and recreation
Society values irrigation not only for its productive capacity, but also for its recreational
use. Economists find it difficult to value recreational use, as a market value does not
exist. In the absence of a known price, the travel cost method has been employed to
obtain a proxy variable.
To use the travel cost method it is necessary to have some idea of the number of
visitors to a region and how long they spent in the region and how much they spent on
accommodation. It was found that in 1993-94 there were 2048 visitor nights spent in
the Riverina region. It was found that the takings from all forms of lodgings during the
year were approximately $23.4 million. Adjusting for inflation, it was found that if similar
patterns of visits existed in 2003 and 2004, visitors would have spent approximately
$29.8 million and $30.5 million, respectively. Finally, if it is assumed that only 70 per
cent of visitors actually visit the Riverina to make use of the recreational facilities
provided by the irrigation infrastructure, then the value of recreation in 2003 was found
to be $20.8 million and $21.4 million in 2004.
(iii)
The aesthetic value of the environment and valuing ecosystem services
If it is possible to “value ecosystem services”, then a value can be put on the
environment. However, due to number of factors such as the assigning values of water
to various stakeholders, identifying and quantifying the ecosystem services and lack of
markets for ecosystem services it is difficult to value ecosystem services.
Although attempts have been made to put values to the ecosystem services they
remains doubtful because of the fact that without really knowing what constitutes an
ecosystem service, it is impossible to know what it is worth.
What is being suggested is that ecosystem services should be treated as a residual in
the valuing process. It should be noted that such an approach is inadequate as all
unaccounted for activities would be considered to be an ecosystem service. Despite
this, it may provide a good proxy for valuing said services. The need for finding a proxy
valuation technique arose because the existence of ecosystem services defies normal
valuation techniques. In particular, no markets exist for them.
(iv)
Salvage values
There is little doubt that salvage values need to be incorporated into a Benefit Cost
analysis. If an asset is purchased for a project, then at the end of the planning horizon,
the asset may be worth something. What it is worth at the end of the project is a
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29
benefit that needs to appropriated and valued. Of course, if it is a dedicated asset that
can not be mobilised, or appropriated, then its salvage value is zero. This would
appear to be the case in irrigation schemes.
5.2.2 The costs of Irrigation
In this study the aim is to assess the effects irrigation has on the welfare of society in a
specific region. While the valuation of benefits was complex, in many respects the
conceptualisations of the costs of irrigation are far harder to achieve. For instance, the
costs to be assessed are those that affect only those in the region in question. In
addition, any costs incurred prior to today should be considered as sunk cost, and thus
are excluded from the analysis.
(i)
The costs of operating irrigation schemes
Data on the private costs of providing water to irrigators can be obtained from the
annual financial reports of water supply companies. The details of operation irrigation
schemes are presented in improved seasonality of flows through irrigation demand
management and system harmonisation main report.
In the case of the MIL, in 2003 over $4 million was spent on business and
administration costs. Water distribution costs account for approximately $6.5 million,
while system maintenance accounts for nearly $5.4 million. Another important cost is
that for bulk water, at just under $3.9 million in 2003. More intriguing is what is meant
by engineering and environmental costs. These would appear to be legitimate costs
and amount to over $1.5 million in 2003.
The costs of running irrigation companies would appear to be $21.4 million in 2003 and
$21.6 million in 2004. Given that in the MIA metered diversions can account for up to
852,000 ML, the cost per ML is $25.12. Given that only 659,000 ML were used, the
average cost per ML was $32.47. This figure is not that different to the price currently
selling on the water exchange of between $35 and $40 per ML. However, the cost of
running an irrigation scheme do not account for all the social costs of regulating rivers.
(ii)
Forgone production
There is an opportunity cost associated with the fact that irrigation is undertaken. This
cost is what the alternative use of the resource could be put. To explain this in its
simplest terms, an irrigation scheme takes up land which normally would be used for
some other purpose. The net forgone value of production in the MIA was estimated to
be $85.6 million, almost six percent of what is earned from irrigation. For each ML of
water used (659,000 ML) the cost of foregone production is equivalent to $129.89.
Interestingly, in the CIA it was found that on the prices received in 2003-04, dryland
production would have resulted in a loss of only $1.4 million.
(iii)
The opportunity cost of water
As in the previous section, the water itself has an opportunity cost. The argument is
that if the water were not used in agriculture what would it be used for? To calculate the
opportunity cost of water it is necessary to multiply the quantity in question by the
market value of the input. From the Watermove Exchange, the value of traded water in
2003 was $35/ ML. In the MIA entitlements total 852,000 Ml of water. In 2002-03 only
659,000 ML were supplied. This means that the opportunity cost of water is equivalent
to $23.1 million in the MIA.
(iv)
Environmental costs
The environmental costs of irrigation are difficult to quantify from a social perspective.
Within irrigation schemes and the rivers that carry irrigation water, it would appear that
the environmental costs are embodied in land (mainly through salinity), water (through
turbidity) or a combination of the two (such as disruptions to flooding, pollution transfer,
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etc.). Despite the difficulties specified above, some information exists of the
environmental effects and costs of irrigation.
(a)
Salinity: NSW Agriculture (1996) has estimated an annual cost to
agriculture from water logging and salinisation of around $3 million for the
Murrumbidgee Irrigation Area. According to Murray-Darling Basin Salinity Audit (2005),
the total annual costs (including agricultural) amount to approximately $1 million for
every 5,000 ha of visibly affected land. In Wagga Wagga, current salinity costs are
estimated to be approximately $500,000 per year and potential costs have been
estimated at $183 million over the next 30 years if no action is taken.
(b)
Nutrient and pesticide transfer: The nutrient monitoring program in the
MIA is aimed at determining solutions for reducing nitrogen and phosphorus levels.
Trigger levels for moderately disturbed ecosystems are 0.05mg/L total phosphorus and
0.5mg/L total nitrogen. It received $1.4 million in July 2003 for implementing land and
water management programs until December 2003. A further $1.4 million has also
been approved and is likely to be released in December 2003 and January 2004.
(c)
Turbidity: The turbidity monitoring programs are aimed at identifying
activities to reduce overall turbidity levels. The turbidity of the supply water was
measured within this range. All other monitoring sites were above the trigger value.
There appears to be no particular trend within each site. The conversion of flood
irrigation to high tech irrigation systems and the implementation of on-farm drainage
recycling and storage should decrease sediment loads and improve turbidity levels in
the drainage system.
5.2.3 Determining which alternative to choose
Young (2005) put together a number set of alternatives for water resources that
could be evaluated. These relate in some sense to his classification that either
structural or non-structural proposals. To put these in perspective the following rules
should be followed in order to get a potential Parato Improvement:
•
Evaluating private investments in additional water supplies, would require
that DBp >DCp, where p denotes a private perspective, DB is direct benefit
and DC is direct cost. In layman’s terms, a new investment is economically
feasible.
•
Evaluating additional water supplies from a social perspective would require
that Is(DBp + IB + SB) > (DCp + IC + SC), where IB is the indirect (external)
benefits, SB are the secondary benefits, IC are the indirect (external) costs,
SC are the secondary costs and all other variables are as defined above. It
should be noted that possibly the secondary benefits and costs cancel one
another out, if a wide analysis is conducted.
•
Evaluating the reallocation of water amongst sectors from a social
perspective is equal to DBS + IBS > FDB +FIB + TC + CC, where DBS is
the direct benefits to the receiving sector, IBS are the indirect benefits to the
receiving sector, FDB are the forgone direct benefits to the source sector,
FIB are the forgone indirect benefits to the source sector, TC are the
transaction costs associated with the change and CC are the conveyance
and storage costs.
•
Given that agriculture is usually the least cost source of water, then in
reallocation assessment, then it could be asserted that the costs of
reallocation (i.e. that FDB +FIB + TC + CC) should be less than the next
best alternative source of water, i.e. that (FDB +FIB + TC + CC) < AC,
where AC is cost of employing water in the least cost source (agriculture).
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31
In order to determine which demand management techniques are the most worthwhile,
economically, it is necessary to have more information on the costs of implementing
each measure and the likely effects. However, these problems are minor when
compared to the lack of information on the public benefits and costs of irrigation.
Further, it would seem that the opportunity of obtaining information on demand
management strategies would be more likely.
5.3
Concluding remarks and recommendations
The purpose in this study was to assess whether it was possible to estimate the social
costs and benefits of irrigation. Such an assessment relied on completeness. In other
words, was it possible to specify all the costs and benefits of irrigation, or as many as
possible, that would result in a reasonable estimate of the net present value of
implementing a range of demand management strategies.
It was found that the private benefits and costs of irrigation schemes could be derived.
In summary, it was found that agriculture contributed $1,475 million and recreation
contributed $21 million. The salvage value and that of hydroelectric power generation
were not considered. The cost of supplying water was estimated to be $21.4 million,
while foregone production accounted for $86.5 million and the opportunity cost of water
was calculated to be $23 million. This results in net private benefits from irrigation of
$1,365.4 million.
The net private benefits do not include the costs of constructing the schemes (as they
are sunk), or the public costs and benefits of irrigation. It was found that reasonable
estimates of the public benefits and costs would be difficult, if not impossible, to obtain.
What is needed is a technique that can overcome the data deficiencies that exist in this
area. However, what is apparent is that any technique that overcomes the problems
without finding a value for the environment detracts from a social Benefit Cost analysis.
The problems in this field are such, that only real solution lies in taking a Cost
Effectiveness analysis.
The large net private benefits derived from irrigation provide some scope to implement
a range of demand management strategies. The strategies reviewed in this study
range from increasing water efficiency through to changing water demand. The
problem arises in the sense that those who lose from implementing a measure are not
those who gain. In other words, it is more likely that a potential Pareto improvement
could be possible.
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6.
Improved Seasonality of Flows as part of System
Harmonisation
Using the concepts developed in the sections 2 to 5 the system harmonisation
framework was developed. The system harmonisation is defined as “a strategy to
improve cross-organisational communication and system-wide management and
improve production and environmental outcomes.”
Using a conceptual-operational analysis a five way System Harmonisation for Applied
Regional Planning (SHARP) feasibility template (Figures 8 and 9) were developed to
generate new science and knowledge for harmonising rice based irrigation system with
their operating environments through agronomic, economic, technological and
institutional improvements in water management.
Figure 8. Five way feasibility leading to SHARP implementation
Figure 9. Knowledge generation during the SHARP feasibility
CRC for Irrigation Futures
33
Each feasibility step involves a Conceptual-Operational-Monitoring (COM) cycle
(Figure 10) to determine the “business opportunities” and “key pressure points” as
listed below:
Conceptual Assessment: This will involve selection/development of conceptual
assessment framework and a wide ranging biophysical, environmental,
economic, social, cultural and institutional assessment to identify “business
opportunities” and “most relevant variables”.
•
Operational Analysis: This means focussing at an operational level on the “most
relevant variables” that represent the key pressure points which can be
adjusted to achieve selected “system harmonisation opportunities”.
•
Monitoring and Evaluation: This will involve designing smart monitoring systems
for monitoring key variables that can capture progress towards “harmonised
irrigation systems”.
Co
SHARP
is
lys
na
lA
na
tio
ra
pe
O
nc
ep
tu
al
As
se
ssm
en
t
•
Monitoring and Evaluation
Figure 10. The COM research cycle for SHARP feasibility
Summaries of key research hypothesis, questions and methodologies for each of the
feasibility steps are presented in the following sections.
This approach builds on the triple bottom line (social, economic and biophysical)
integration approach presented by Khan et al. (2004a and 2004b). Key challenges and
opportunities of water savings and sustainability of rice based irrigated agriculture are
given by Khan (2005) and Khan (2006). This paper describes a five way feasibility to
achieve real water savings and better environmental outcomes in rice based systems.
6.1
Analysis and Characterisation of Hydrologic Systems
This feasibility step will involve hydrological characteristics of the region and seeks to
build an interactive “Water Balance and Residual Waste Statement of the Water Cycle”
as shown in Figure 11. In addition to establishing the base position of the region this
feasibility stage will also identify some of the key pressure points in the system (shown
as hexagons) – in particular the capacity to optimise on farm and near farm irrigation
system performance and water demand patterns to deliver productive and
environmental dividends.
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CRC for Irrigation Futures
Figure 11. Identification of key pressure points in the irrigated catchment
water cycle
An example of “Harmonisation” opportunities to be identified during this stage includes:
“Optimising interface between river operation and irrigation system operation by the
hydrologic and hydraulic efficiency of irrigation system through better synchronisation
of demand-supply.”
Key research questions asked during this feasibility step are:
•
What is the most appropriate and comprehensive framework for assessing
system harmonisation across a range of irrigation system typology?
•
What are the tools needed to asses the impact of internal and external
interventions on system harmonisation performance at a range of scales and
irrigation systems settings?
•
How to design intelligent monitoring systems that require least effort and
provide information rich data, enabling the on-going assessment of system
harmonisation performance at a range of scales and irrigation systems
settings?
6.2
Water productivity, markets and environmental dividends
Establish the production and non-production related product and/or services most in
demand within the region, and identify which ones can be delivered by the irrigation
industry acting either independently or in partnership with others.
From an environmental perspective these can be identified by reviewing the associated
ecosystems and their products and services. The delivery of identified ecosystem
products and services will be examined in two ways. Firstly, possible adjustments to
the current water supply and hydrologic patterns will be examined to assess how
modified irrigation business practices can lead to better ecosystem services. Secondly,
the knowledge of ecosystem requirements can be used to build a hydrologic regime for
regulated river system which can deliver improved ecosystem services. The means to
CRC for Irrigation Futures
35
achieve this altered hydrologic regime will be assessed in conjunction with feasibility
steps 1 and 3.
From an economic perspective this stage will help assess costs involved in improved
environmental management (lost opportunity, infrastructure investment, structural and
pricing reforms etc.) and how transaction costs can be minimised by attributing these
costs to local, regional and national stakeholders.
The end point of this process is a list of defined products and/or services with realistic
economic assessments undertaken of the key market variables of demand and price in
place.
Key research questions relevant to this feasibility step is “how do we best understand
and define the economic, social and environmental systems which constitute irrigation
in Australia?
Sub questions to address this include:
•
What are the most appropriate approaches for understanding who and what are
dealt within irrigation schemes?
•
What are the most appropriate methods of establishing the importance of
irrigation and water resources within a region with respect to the economic,
environmental and social performance of the region?
•
What outcomes, (environmental, economic and social) are acceptable/sought
following any change in hydrological flows?
•
What is the current status of water productivity, the environmental systems, and
the social values of the region under study?
•
What are the transaction cost issues, how might they impact on the cost/benefit
(triple bottom line version) of investments and what are the best ways of
reducing these and dealing with any transaction cost impact issues?
•
What environmental outcomes or regional values are primarily affected by
irrigation practice?
•
What is the value of individual ecosystem services that can be affected by
irrigation management
•
What are the risks and uncertainties that govern water use in the sector? What
options are available to minimise risks?
•
By changing practices what could the irrigation operators do to improve
environmental, social and economic outcomes (individually and collectively)?
•
Is there a ‘critical mass’ or minimum level (e.g. number of irrigators) of practice
change among individuals that is necessary to bring about these outcomes?
6.3
Mechanisms and processes for change
An understanding of the most appropriate change management strategies and
institutional and policy settings is needed to facilitate movement towards a more
productive and sustainable irrigation environment. This process involves a
comprehensive scan of the business environment to identify the social, cultural,
legislative and institutional barriers and opportunities. At the operation level the
provision of “harmonisation services” within a market context is new and as such it will
be necessary to identify and/or establish mechanisms and processes to enter new
markets and trading facilities. Triple bottom line monitoring and evaluation of “progress”
towards “system harmonisation” will be developed as part of the implementation
process.
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CRC for Irrigation Futures
•
What are the regulatory issues (spanning government, industry or other code
and self-regulation) involved in irrigation investments/systems, how might these
impact on irrigation investments and outcomes, and how can the costeffectiveness of these be optimised for a given situation or project.
•
What are the risks to social, economic, environmental or commercial outcomes,
and what mechanisms (financial, managerial, political, and economic) are best
suited to minimise these?
•
What are the system resilience issues (social, economic, environmental and
commercial) of importance in irrigation systems and communities, what are the
relevant contingencies that might impact, and how can the resilience values be
optimised through business plans developed in Box 4?
•
What are the issues of divergence of perspective, or different visions that are
relevant to irrigation systems and communities? How might this impact on
outcomes? How can they be best addressed? How can a shared vision and
commitment be achieved?
•
What political issues and processes are most relevant to irrigation systems and
communities, and what impacts might these have? How can irrigation systems
be designed (in terms of inputs, processes and outputs) to best harness and
maintain political support? What political strategies are needed? How can
they/should they be implemented?
6.4
Developing a business model
The research outputs associated with the above three main areas run the risk of
delivering only dry academic tomes if not utilised in a meaningful fashion – hence the
strict relationship between the System Harmonisation Research Program and the
development of a business plan for improved water management within a particular
area and its subsequent implementation by our partners or others within the region.
The research will involve key stakeholder as partners to help define region specific
issues and deliver relevant solutions ready for adoption.
Having identified the market, defined the product and established a legislatively and
institutionally acceptable route to market the feasibility process begins in earnest.
During this phase detailed biophysical and socio/cultural analysis of the feasibility of
providing the products and/or services required at the market defined price/volume
relationships previously identified will be undertaken in conjunction with feasibility
stages 1, 2 and 3. The questions addressed during this stage include:
•
Is it possible to develop generic investment models for system harmonisation
opportunities?
•
How can we integrate Value Chain Management/Value Management and
System Harmonisation?
•
How can we generate a template for Harmonised Irrigation Businesses and
Environments?
The CRC IF is aware of various business feasibility models used in both the public and
private sectors, which continue to evolve in economic, financial, social and
environmental terms. From a business and investment perspective such models
include ‘public-private partnerships’; those commonly used and measured in private
enterprise; economic modelling and others established in government legislation.
These models will be assessed with the RIBPs.
CRC for Irrigation Futures
37
6.5
Implementation challenges
Like any scientific study successful execution occurs when a business entity has been
established to meet the market demand in a profitable and sustainable fashion.
Ultimately the success of the project is best evaluated by the liquidity of this entity and
the growth in shareholder value.
A key feature of this market place will be the need to create a business model which
manages to convert the largely public good nature of individually positive actions into a
collective output which can be privately implemented and traded. This will require not
only a sound understanding and demonstration of the biophysical realities of the region
but the establishment of robust cooperative business structures and regional
investment partnerships.
The CRC IF is keen to implement system harmonisation sites by developing “Regional
Irrigation Business Partnerships” (RIBP) with groups of irrigators wishing to explore an
alternative approach to securing their long term future.
The first and most important characteristic of an RIBP site is that it is fully and
enthusiastically endorsed by our industry partners. The CRC IF’s mandate is to deliver
improved productivity, profitability and sustainability to irrigation Australia wide, but in
this instance we wish to focus our activities very strongly around specific industry
partner needs.
Other vital characteristics for an RIBP would include:
38
•
There is enough surface and ground water
understanding of key water management issues;
•
There is a demonstrated need to change or recognisable opportunity for
improved productive and/or environmental outcomes through improved water
management;
•
There are clearly identified biophysical, social, economic and institutional issues
which are likely to respond to the coordinated alignment which is suggested
within the System Harmonisation program;
•
An existing organisation or individual represents a potential champion for the
process;
•
Clear business opportunities have are likely to be identified with potential
funding partners available;
•
The scale of the overall project is commensurate with the combined CRC IF
and RIBP resources; and
•
The time scale for change is in line with CRC IF objectives to deliver real
change within a 4 year time frame.
data to enable a clear
CRC for Irrigation Futures
References
ABS (2005) Water Use on Australian Farms. Australian Bureau of Statistics.
ANCID (2005) Benchmarking Report 2003-2004.
Coleambally
Irrigation
Co-operative
Limited
(CICL)
(2005)
http://www.colyirr.com.au/Home/index.asp. Last accessed in September 2005.
Davidson, B & Malano, H (2005) Key considerations in applying microeconomics
theory to water quality issues. Water International, 30 (2), 147-55
Khan S (2006) A System Harmonisation framework to achieve sustainable water
savings in Rice Based Systems. Dr Ragab Ragab Editor. Proceedings of the
International Workshop on Water Saving Practices in Rice Paddy Cultivation.
International Commission on Irrigation and Drainage. 14-15 September 2006,
Kuala Lumpur, Malaysia. Pages 68-76
Khan S (2005) Irrigation Systems Water Savings: - Technical, Economic and
Institutional Issues. Regional Workshop on the Future of Large Rice-based
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