Evaluation of the economic feasibility of water harvesting for irrigation in a large semi-arid tropical catchment in northern Australia

For the cropping scenarios modelled here for the Flinders catchment it was found that mosaics of irrigation based on water harvesting and off-stream storage are unlikely to be profitable, and short to medium season crops provided the best return, although still negative. This is because land developed for irrigation of short to medium season crops returns no income for six or more months every year, while for permanent cropping the cost of constructing a storage that could provide water for irrigation throughout the year is prohibitively expensive. Assuming an optimal water storage to pump capacity ratio of 5, it was found that if an additional 240 GL of water were added to the existing 105 GL catchment entitlement, most new irrigators could extract their entitlement in approximately 70 to 80% of years, discounting any environmental or legislative issues that would need to be addressed. At these reliabilities, most high value crops would require high prices to be sustained through the entire investment period (for which there is no historical precedent), to acquire a return equal to inflation. The method and results presented in this manuscript would be useful to water planners and regulators to help inform water allocation, pricing decisions and policy initiatives, particularly where agricultural development may be based on water harvesting.