March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Overview of Australian Case Studies John Mullen Research Leader, Economics Coordination and Evaluation NSW Department of Primary Industries, Orange

Background: Climate variability Key issue for Australian agriculture -CV greater in Australia than other continents -Agriculture - “the most weather dependant of all human activities” -CV responsible for 38% of the variation in the GV of Ag Prod’n -One of the main risks faced by Aust farmers Expected to be worse under climate change Implications of climate variability: –Reduced resource use efficiency on farm –Natural resource degradation with both on and off site effects

What makes a forecast valuable USER FACES A CHOICE OR A DECISION SCF INFORMATION IS SKILFUL AND TIMELY

PROJECT OBJECTIVE HOW, WHEN, & WHERE CAN SCF BE USED PROFITABLY

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Overview of Australian Case Studies Western NSW Rangelands Liverpool Plains - Northern NSW NSW Murrumbidgee Valley

Location of Australian case studies Northern NSW Murrumbidgee Rangelands

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Western NSW Rangelands Key features: 32.5 million ha - 42% of the land area of NSW 32.5 million ha - 42% of the land area of NSW 1700 graziers – av prop size 19,000 ha 1700 graziers – av prop size 19,000 ha populated by only 52,830 people. populated by only 52,830 people. av rainfall of mm with high variability av rainfall of mm with high variability pastoral country held under lease pastoral country held under lease sheep and cattle grazing with some cropping in East and Southern parts sheep and cattle grazing with some cropping in East and Southern parts many sustainability issues many sustainability issues

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Western NSW Rangelands

Application of seasonal climate forecasts Without SCF Pasture loss and soil erosion from maintaining stock into dry period Lost income opportunities from tactical management of stock numbers under favourable conditions With SCF real skill only in late winter-spring period SOI < 0 → DRY SPRING/SUMMER SOI < 0 what decisions occur then: –Graziers - sale/purchase/agist decisions Western NSW Rangelands

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Western NSW Rangelands (some findings by Hacker et al)

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Liverpool Plains  Area: 1.2 Million ha  Farms: 1,600  Climate: Rainfall: 604mm - 684mm (60% summer rainfall)  Highly productive agricultural region  Landuses - 48% grazing, 37% cropping, 14% timber reserves

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers  Cropping  winter cropping (wheat, barley, chickpeas)  summer cropping (sorghum, sunflowers, soybeans, maize and cotton)  Grazing - 3 million beef cattle  Environmental issues:  Dryland salinity, erosion, water quality, vegetation management Liverpool Plains

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Application of seasonal climate forecasts Without SCF - traditional Dryland cropping long fallow wheat and sorghum rotations minimise risk of crop failure by allowing soil moisture build up watertable and erosion problems With SCF – greater adoption of opp cropping Planting decisions based on soil moisture and SCF higher profits, less soil erosion and reduced deep drainage higher risk as planting on lower soil moisture but reduced through a SCF Liverpool Plains

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Liverpool Plains Forecast and rainfall associations (similar for yield) Forecast and rainfall associations (similar for yield)

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Liverpool Plains Economic value of SCFs – all forecasts Economic value of SCFs – all forecasts

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Liverpool Plains Economic value of SCFs – all forecasts with higher sorghum price Economic value of SCFs – all forecasts with higher sorghum price

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Murrumbidgee Valley - NSW

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Irrigated agriculture major irrigated valley in NSW (8.4 mill ha) broadacre ag (rice, maize, wheat) & hort crops (citrus, winegrapes) 50% of Aust’s rice, 25% of NSW total fruit & veg broadacre irrigation - mainly flood systems 330,000 ha of irrigated crop and pastures Irrigation supplies very reliable due to large storages in the East historically - full irrigation allocations in 95 of 100 yrs reforms – lower reliability due to environmental flows Murrumbidgee Valley - NSW

March 2005 ACIAR Project: Bridging the gaps between SCFs and decision makers Application of seasonal climate forecasts Without SCF allocation system does not take into account SCFs irrigators make decisions in October well before end of season allocations are known reduced economic efficiency from usual under planting environmental flows make this worse With SCF better info on likely inflows to dams flows through to more reliable irrigation allocations benefits of SCF - better matching of production plans to irrigation water supply conditions Murrumbidgee Valley - NSW