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Irrigation Prices in the Queensland Sugarcane Regions: an analysis of the community benefits and costs of improved irrigation pricing

On 31 January 2020, the Queensland Competition Authority (QCA) recommended increases to the price of irrigation water over the 4 year period 2020/21 – 2023/24.

ASMC members are concerned about the effect on the sugar industry and communities if the Queensland Government accepts the QCA’s recommendations. Further price increases for the water supply schemes* that service Queensland’s cane fields will further discourage optimal crop irrigation. The Australian sugar industry is under considerable pressure at present. Global prices for sugar are at decade lows and an increasing and unaffordable domestic regulatory burden that prevents improvements in cane yield and cane acreage will threaten mill viability.

ASMC has prepared a new report: Irrigation Prices in the Queensland Sugarcane Regions: an analysis of the community benefits and costs of improved irrigation pricingThe report outlines the social, economic and environmental benefits of improved water pricing. The analysis demonstrates that the benefits are likely to outweigh the costs under both 15% and 25% irrigation price reduction scenarios.

Moreover, ASMC’s report concludes that a 25% reduction in the price of irrigated water could deliver significant regional development benefits with up to $220 million in additional industry and broader outputs over the period 2020/21-2023/24.  The regional development benefits were calculated by independent experts, Lawrence Consulting (Economic Impact of Improved Irrigation Pricing on the Queensland Sugar Manufacturing Industry).

Improved water pricing would also improve the sustainability of sugar mills, lower the government’s water stranded asset risk and achieve improved environmental outcomes.

Sugarcane regions are serviced by the Mareeba-Dimbulah, Burdekin-Haughton, Pioneer River, Eton, Bundaberg and the Lower Mary River Water Supply Schemes (WSSs) See profiles for each WSS.

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