1. Rangelands: Sustainable Economic Development in Western Australia Graham Laitt 1 st March 2016

2. Economic development of the Rangelands is about: 2 Quality improvements to what we do now New goods, services and markets Innovation and entrepreneurship Risk Mitigation 1 2 3 4

3. Our Economic Growth Goal The State Government’s target is to: Double real sales of agrifood products between 2013 to 2025. With reservations for sustainability, contribution to quality of life, Indigenous rights and needs etc. 3

4. Only a third of Western Australia is farmed and 93% of all Source: Agricultural Commodities Australia 2012-13 (ABS; 7121.0); DPAW Annual Report 2013/14; EDOWA Fact Sheet 12 Dec 2010; Coriolis analysis 4 Horticulture 0.3% Agricultural land 33% WA land use in farming and select other uses Sg km; 000; 2013 European settlers didn’t want this land 100 years ago. Does new technology make any of this viable (e.g. irrigation Total land 2530 WA land ownership Sg km; 000; 2010 Total land 2530 land is owned by the government; any significant increase in farmland would need to come from re-evaluating the Crown Land

5. 5 Increase Existing Production Increase land & water for New Production New strategies ‘out of the box’ Existing landholders Improve Efficiency Improve Quality & Price Reduce operational risk Diversify operations New Entrants Includes existing landholders who diversify into an entirely new business Entrepreneurs May develop entirely new business models or markets. How will we grow?

6. Israel demonstrates what is possible, generating twice the * Includes value added to agricultural products (unlike $72 page prior) Source: CIA World Fact Book; ABS (various data sets); DAFWA; National Water Commission Australian Water Resource 2005; Coriolis analysis 6 value of Western Australia on 1% of the land and 5% of the water Total regional area Sg km; 2014 Renewable water Cu km; 2013 Total F&B value/AG HA $/ha; 2013 Total F&B Industry value A$/US$; Billions 2013

7. Managing Competing Interests in Rangelands Riparian Rights Mineral Rights Pastoralists Rights Indigenous Rights Physical Land 1.The Rangelands lease will be subject to rights under the: Mining Act. the Native Title & Heritage legislation. 2.It will still be necessary to seek approvals to take water, clear land and for an Indigenous Land Use Agreement on most occassions as well as an excision from a Pastoral Lease when relevant. 3.The creation of a leasehold interest provides a proprietary interest that may be transferred and may have greater value for lenders and investors, but is it enough? 7 Rangelands Lease Rangelands Lease

8. 8 Growth Strategies Existing LandholdersNew EntrantsEntrepreneurs Cross Breeding Spike feeding Culling policy Southern finishing Fodder production Feed Reserves – drought proof Environmental management Fodder production Custom feedlots Growing protein sources Bio-diesel New ideas to be thought of More capital and new skills Integrated supply chains developing products for overseas markets 123

9. The major risk of Northern development has been chasing big visions that fail – this discredits entrepreneurship – above all we need success even if that is modest. 9 Risk Mitigation Chasing big visions that fail Incremental development Existing business growth Focus on attainable growth 1 2 3 4 Incremental development from an existing successful (if not optimum base e.g. cattle) will help keep risk in check. A smaller percentage increase in growth from an existing business may be more valuable than attempting to gain high growth from a new venture. We need to focus on the low hanging fruit in WA at present and increment to higher risk new business development.

10. 10 LupinsSunflowers FloodStorm

11. Hay - 2009 Balage - 2012 Pit Silage - 2008 Wrapping Balage 2012 Product is now storable over the wet season The Learning Curve 11

12. 12 Liveringa 2014 Canola Trial Two weeks growth in July 2014 and flowering with a good seed set

13. 13

14. Integrating the North and the South. 14 Low capital & risk - optimises WA’s pasture and processing resource

15. Weaners from each muster (generally average 200kgs each) are transferred to agistment in the south- west of the State which has feed available as pasture dries off in the North. Agistment is with third parties with surplus feed or on properties owned by Pastoralists. Retained ownership enables access to a wider range of markets and increases the total kilograms of beef sold each year. All male cattle can be removed and sold each year without holding on the stations making the muster efficient and increasing Breeder Herd space on the stations. Generally southern pricing is better and covers the cost of transport from the north to the south. Liveringa Agistment centres Southern Supply Chain and agistment for WA Producers Low cost weaner production in the North West using wet season feed. Low cost finishing in the south on surplus winter pastures. 15

16. Peers suggest there are opportunities to increase the amount of crop produced in greenhouses NOTE: Data is from a wide range of sources and may not be perfectly comparable; many countries include glasshouse, greenhouse/PE tunnel & low tunnel; range of estimates for China (up to 2,760,000ha) Source: Cuesta Roble Consulting; “Greenhouse production systems in Mediterranean area” Leonardi/De Pascale May 2010; “Greenhouse Technology Globally: The future of food”; Coriolis analysis 16 Israel 26,000 ha in Greenhouses WA only 44 ha in Greenhouses

17. 17 An important opportunity

18. 18 Marketing issues for development projects Development marketing issue Cross Breeding Rain fed Fodder Production Irrigated Fodder Production Custom FeedlotFeed Centre Grain Production Heritage Tourism New product New market Existing product Existing market Logistics barrier* Regulatory Barrier** Political hurdles^ Market security^^ Competitor threats *Logistics barrier refers to the ability to profitably ship to market and largely depends on freight to value but may also be limited by seasonality and ability to secure distribution ** Regulatory barrier includes environmental assessment and impact as well as ability to access key resources such as water and land ^ Political hurdles include the ability to manage community concern and requirement to consult with Traditional Owners as well as acceptability of the project to Government and the policy of regulatory authorities ^^ Market security refers to access to and dependability of the marker and will vary depending on the level of sustainable competitive advantage

19. 19 Development of farm land whether for cropping or livestock production involves the transfer or development of technology and this requires a careful assessment of risk. It is important to select a development path based on minimizing the risk of loss rather than necessarily maximizing gain Development Problem Cross Breeding Rain fed Fodder Production Irrigated Fodder Production Custom FeedlotFeed Centre Grain Production Tourism Tech transfer To a new region To commercial scale up Adaption Environmental change / risk Location New product New industry

20. Acknowledge Coriolis & Thank you for your attention