1301.0 - Yearbook Chapter, 2008  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 07/02/2008   
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Australian agricultural production helps provide food and clothing for a nation of over 20 million people. In addition, Australia exports around 65% of its agricultural production to international markets.

Achieving such a level of production in the driest inhabited continent on Earth is no easy task. In 2004-05, 35,000 farms irrigated 2.4 million hectares (mill. ha) to supplement natural rainfall and, in doing so, applied around 65% of all water used by the nation (graph S16.1). The product of this activity was goods to the value of $9.1 billion (b), which was 23% of the total value of agricultural production in that year.

Recent data indicates that in 2005-06, 45,000 farms irrigated 2.6 mill. ha.

This article examines who irrigates, the sources they use, the methods employed and the benefits. It refers briefly to the current debate on the use and regulation of irrigation water. The analysis is based on data for the period 2000-01 to 2004-05 as data for 2005-06 are not directly comparable with that for earlier periods.

S16.1 Irrigated land area - 1983-84 to 2004-05(a)
Graph: 16.1 Irrigated land area—1983–84 to 2004–05(a)


Farmers across all states of Australia use irrigation water to supplement rainfall in agricultural production systems; with methods used impacted by differing water availability, soil type, topography, state legislation, water charges etc. In 2004-05, New South Wales farmers used 4,133 gigalitres (GL) of water which was 34% of all water used by agriculture, including water for stock. Victoria followed with 27% and Queensland 24%.

On an activity basis, dairy farming in 2004-05 had the highest water use with 2,276 GL or 19% of all water used by the agriculture industry. Pastures (excluding those for dairy) followed with 1,928 GL (16%) and cotton growing with 1,822 GL (15%). The activities of sugar growing, grain production and raising livestock each used about a one-tenth share of the total water consumed. Fruit, grape and vegetable growing combined used about 1,820 GL (15%) with which the horticulture industry as a whole was able to generate about half of Australia's gross value of irrigated agricultural production (GVIAP).

In terms of commodities produced, virtually all rice is grown on irrigated land and about 90% of land used for grapes is irrigated. Graph S16.2 shows for a selection of commodities, the proportion of land irrigated.

S16.2 Proportion of land irrigated
Graph: 16.2 Proportion of land irrigated


Most water used for irrigation originates from Australia's major river systems, the Murray-Darling system in eastern Australia and the Ord River in the Kimberley region of Western Australia. Other significant river/dam systems can be found on the Burdekin River in Queensland, in the south-west of Western Australia and in the MacAlister district of Victoria. Another large source of water in Australia is the ground water available from the Great Artesian Basin, which provides for livestock and crops over much of north-eastern Australia via natural springs and man-made bores (map S16.3).

S16.3 Water consumption in Australia
Diagram: 16.3 Water consumption in Australia


Surface water, drawn from rivers, lakes, weirs and dams, is the main source of irrigation water across all industries. The relative importance of other water sources - groundwater (in underground streams and aquifers), town or country reticulated mains supply, and on-farm and off-farm recycled or reused water (used, captured, treated and reused) - varies considerably between irrigated activities and location. With South Australia and the Northern Territory the exceptions, all other states rely mainly on surface water.

In 2004-05, irrigated farms in the Northern Territory obtained the greatest share of their water for use in agriculture from the ground (82%) followed by South Australia (46%). New South Wales, Queensland and Western Australia each relied on groundwater for about a quarter of their agricultural water. South Australia was the largest absolute user of town or country reticulated mains supply as a source of water ( 47% of national use).

On-farm methods of recycling water have become popular in recent times as they can be cost effective and resource friendly. It is generally more common on large farms (based on estimated value of agricultural operations) and, in particular, broadacre with around 30% of all farms with broadacre crops as their main irrigated activity, and almost all farms with cotton as their main irrigated activity, undertaking some form of on-farm water recycling in 2002-03. However, this water may contain more nutrients, and increase salinity, which farmers need to account for during application.


There are various methods of irrigation and each method offers different advantages and disadvantages to the various crops and land types. For example, surface irrigation, which involves directing a flow of water across the soil surface was the dominant water application method for farms producing rice (96%), cotton (95%), and cereals other than rice (51%) in 2003-04. Drip irrigation was used on 80% of farms where their main irrigation activity was fruit growing and 73% of farms whose main irrigation activity was grape growing.

Soil conditions can also influence water application methods as seen on the semi-arid plains of northern Australia and the temperate slopes and plains of southern Australia. In these locations, surface irrigation is the preferred method for the growing of cereals (excluding rice) but in all other irrigated areas of Australia, sprinklers were the dominant form of irrigation for cereals (excluding rice).

Developments in irrigation technology have led to the invention of sub-surface drip irrigation where drip lines are buried 10-20 centimetres below the ground to uniformly wet the area. This method allows water and nutrients to be applied directly to the root zone enabling the producer to manage and optimise water use.

Given the high losses of water incurred in agriculture (due to leaks, evaporation, etc.) and greater recognition of the need to preserve water, these new technologies, while costly to establish, are being increasingly used by farmers who previously used surface and sprinkler irrigation methods.

As well as irrigation methods, irrigation scheduling methods are also attracting greater attention. The majority of farms once tended to only use their own knowledge or observation techniques but now on-farm tools and alternative scheduling methods are also being used. Some tools used to determine when to irrigate include; evaporation figures or graphs, tensiometers and soil probes.


The amount of water used for irrigation varies depending on the water needs of the agricultural activity being undertaken, farm size and geographic location. In 2003-04 rice and cotton crops were the most water intensive 13 ML per hectare and 6 ML per hectare respectively, with other application rates ranging from less than 3 ML per hectare on cereals (excluding rice) to an average of about 4-5 ML per hectare on pastures, sugar, and horticultural crops.

On a geographical basis, application rates can vary substantially. In 2003-04, higher rates of water use were required by irrigators on the temperate slopes and plains of southern Australia, the arid interior and in the north-west tropics. For irrigated pastures, water application rates were also higher in the north-east tropics. For cotton and grapes, rates were comparatively high on the semi-arid plains of northern Australia. This reflects the variability in rainfall across Australia, the variability of application methods and the range of water requirements for various crops.


In 2004-05, the value of produce from irrigated agriculture was estimated at $9.1b. A year earlier, it was calculated that farms with irrigation generated 55% more production income than non-irrigating farms. This was despite the land area of irrigated farms generally being smaller than that of non-irrigated farms (graph S16.4).

S16.4 Gross value of irrigated agricultural production
Graph: 16.4 Gross value of irrigated agricultural production

While the Murray-Darling Basin only receives a small portion of Australia's annual rainfall, it contains 42% of Australia's farms and produced $4.7b in GVIAP in 2000-01 (with gross value of agriculture production in the area equal to $14.5b in 2000-01).


Water in Australia is limited, so in order to manage stored water, many regional authorities grant water access entitlements and water allocations. Water access entitlements are ongoing entitlements to enable exclusive access to a share of water. A water allocation refers to the share of water which is allocated to an entitlement in a given season.

In 2004-05, there were 223,556 water access entitlements in Australia with a total allocation volume of 29,831 GL. New South Wales had the highest number of entitlements (53% of total) as well as highest allocation volume (45% of total) despite the state only containing 31% of Australia's farms. By 'source', only a third (34%) of these entitlements related to surface water but they constituted three-quarters (76%) of the total entitlement volume. Conversely, just under two-thirds of the entitlements were for groundwater but these only accounted for a quarter (24%) of the entitlement volume (graph S16.5).

Markets exist to facilitate the trade of water on both a temporary and permanent basis. Most trade of water access entitlements is done on a temporary basis with 1,053 GL changing hands in 13,456 temporary trades conducted in 2004-05. Permanent trades involved 248 GL in 1,802 trades.

In 2002-03, the year for which the most detailed data are available, most irrigation water was traded on a temporary basis into irrigated pasture and broadacre industries and out of horticulture and other activities. Overall, purchases were highest for large farms (based on their estimated value of agricultural operations) with pastures, cereals or cotton as the main irrigated activity.

Trade prices in that year varied substantially depending on location. For temporary purchases, prices ranged from an average of $8 per ML for pastures on the wet tropical coasts of north-east Australia up to about $1,500 per ML for fruit growing in the arid interior. Permanent trade prices varied from $80 per ML for fruit growing on the wet temperate south (and $135 on the wet subtropical east) to $4,800 per ML for grape growing on the same wet temperate southern coasts.

S16.5 Water trades, by main irrigated activity
Graph: 16.5 Water trades, by main irrigated activity


Currently there is considerable debate about how water may best be used in Australia. Some of the questions being asked include: 'is agriculture the most essential and efficient way to use such large volumes of Australia's limited water supply?'; 'what commodities should be priorities for irrigation?'; 'how should water use be regulated?'; 'can market forces be left to resolve these issues?'.

In order to tackle the questions being posed, a national policy for the efficient and sustainable reform of Australia's rural and urban water industries was developed in 1994 by the Council of Australian Governments (COAG). This reform was the basis for the COAG 1994 Water Reform Framework which proposed an integrated approach to address environmental degradation of river systems. The framework outlined strategies for:
  • the allocation of water to the environment
  • ecological sustainability of new developments
  • institutional reform
  • protection of groundwater
  • adoption of integrated catchment management approach
  • micro-economic reform.

This framework has since been updated and extended through the National Water Initiative (NWI), agreed by COAG in June 2004. The NWI is Australia’s current blueprint for water reform and represents a shared commitment by the Australian Government and all state and territory governments. Just under half of these initiatives (approximately 70) involve national actions or actions to be undertaken by governments working together.

To assist with the implementation of the Initiative, the Australian Government established the National Water Commission. This body has the task of meeting the NWI objective of achieving 'a nationally compatible market, regulatory and planning-based system of managing surface and groundwater resources for rural and urban use that optimises economic, social and environmental outcomes'.

As stated by the National Water Commission, at the highest level, implementation of the NWI will achieve:
  • clear and nationally-compatible characteristics for secure water access entitlements
  • transparent, statutory-based water planning
  • statutory provision for environmental and other public benefit outcomes, and improved environmental management practices
  • complete the return of all currently over-allocated or overused systems to environmentally-sustainable levels of extraction
  • progressive removal of barriers to trade in water and meeting other requirements to facilitate the broadening and deepening of the water market, with an open trading market to be in place
  • clarity around the assignment of risk arising from future changes in the availability of water for the consumptive pool
  • water accounting which is able to meet the information needs of different water systems in respect to planning, monitoring, trading, environmental management and on-farm management
  • policy settings which facilitate water use efficiency and innovation in urban and rural areas
  • addressing future adjustment issues that may impact on water users and communities, and
  • recognition of the connectivity between surface and groundwater resources and connected systems managed as a single resource.

In January 2007, a ten-point plan was proposed by the Australian Government to improve national water efficiency. At an estimated cost of $10b to be incurred over ten years, the National Plan for Water Security aims to accelerate the implementation of the NWI. The proposal makes provision for investment in irrigation infrastructure, addressing over-allocation and providing a sustainable cap on surface and groundwater use in the Murray-Darling Basin, new engineering works, changed governance arrangements, and the creation of a taskforce to examine future land use in northern Australia. The plan also outlined an expanded role for the Bureau of Meteorology to provide the water data necessary for good decision making by governments and industry.

In August 2007 the Water Act 2007 (Cwlth) passed through both houses of the Commonwealth Parliament. This legislation makes provision for the fundamental aspects of the National Plan for Water Security to be implemented.


Agricultural Commodities, Australia (7121.0)
Australian Farming in Brief (7106.0)
Characteristics of Australia's Irrigated Farms, 2000-01 to 2003-04 (4623.0)
Government of South Australia, Water Supply, Atlas of South Australia
Meyer, WS 1998, Water For Food - The Continuing Debate, CSIRO, Griffith, NSW
Water Access Entitlements, Allocations and Trading (4610.0.55.003)
Water Account, Australia (4610.0)
Water Use on Australian Farms (4618.0)


Actew Corporation, Grass Roots Irrigation, last viewed August 2007, <http://www.actew.com.au>

Goulburn-Murray Water, Storage Level Report, last viewed August 2007, <http://www.g-mwater.com.au>

National Water Commission, National Water Initiative, last viewed August 2007, <http://www.nwc.gov.au>

NSW Water information, last viewed August 2007, <http://www.waterinfo.nsw.gov.au>

Prime Minister of Australia, National Plan for Water Security, last viewed August 2007, <http://www.pm.gov.au>

South Australia Research and Development Initiative (SARDI), Irrigation Efficiency: What is it and Can we Improve it?, last viewed August 2007 <http://www.sardi.sa.gov.au>