Addressing rising input costs driven by inefficiencies in government service provision
Opportunity exists for the governments to ease pressure on rising input costs, and therefore farm business profitability, through more efficient management of public infrastructure and services that are relied upon by irrigated agricultural producers.
Above inflationary increases in water and energy costs continue to have a significant impact on irrigated agricultural producers in the Macquarie Valley.
Figure 1: Water charges in the Macquarie Regulated River System ($2012/13)
Many irrigators have sought to increase on-farm water use efficiency by adopting pressurised irrigation systems. Though leading to water savings, this technology has resulted in a trade-off between 'water intensity' and 'energy intensity' for many irrigators.
A study conducted by the NSW Irrigators’ Council and Cotton Australia (available here) identified electricity cost increases for irrigators of up to 300 per cent over the last five years. The major drivers being network charges and State and Federal 'green scheme’ costs, i.e. carbon charges.
MRFF supports the introduction of a food and fibre tariff to address the specific energy needs and requirements of irrigated agricultural producers.