1. sustainable agricultural systems The economics of improving water quality in the Gordonstone Creek Catchment Fred Chudleigh DPI &F James Gaffney CQU Chris ChilcottDPI &F

2. The Fitzroy Catchment

3. Reef Water Quality Protection Plan (Great Barrier Marine Park Authority 2001) Initially seeks A 50% reduction in sediment A 50% reduction in phosphorus, and A 33% reduction in nitrogen pollutants by 2011

4. Productivity Commission 2003, Industries, Land Use and Water Quality in the Great Barrier Reef Catchment, Research Report, Canberra. Primary cause of the pollution problem Terrestrial runoff (non-point, diffuse pollution) Cattle grazing and cropping the most significant contributors to diffuse pollutant discharges into the Great Barrier Reef Lagoon

5. The Fitzroy River catchment 14.2 million hectares - 8% of Queensland - 35% of the catchment area that flows into the Great Barrier Reef lagoon Produces 45% of GBR beef 43% of GBR crops (non sugar) 45% of GBR coal Employs 20% of GBR workforce Produces 22% of sediments 17% of nitrogen 19.5% of phosphorus That reach the Great Barrier Reef Lagoon

6. (Dougall et al., 2004)

7. Sediment and land use in the Gordonstone Creek Catchment 280 km 2 in area Instrumented with water quality equipment (Dougall et al., 2004) Pollutants of sediment, nutrient & pesticide loads monitored and measured At scales from 15 hectares up to 28,000 hectares

8. April 2000 February 2000 50 km 2 Gregory Hwy Site % Stubble Cover 0-1010-2020-3030+ Millar, Dougall, Rohde and Carroll, (NR&M, 2000) The Cover Story

9. Impact of ground cover on event mean sediment concentration for the Gordonstone Creek catchment (Carroll et al 2004)

10. Catchment modelling and sediment loads (Dougall et al., 2004)

11. Catchment modelling and sediment loads Catchment modelling is a new science Sediment and sources not readily linked within the catchment Sediment sources may be managed through Site specific treatment - some difficulty in knowing which site to treat or the impact on overall sediment levels of treatment at any particular site Landscape or catchment wide treatments - requires land use change across the catchment In this analysis we estimate the opportunity costs at the property level of a landscape or catchment wide treatment applied to manage soil loss

12. Method modelled soil loss and productivity using bio- physical production models (APSIM & GRASP) for the Capella climate (110 years) Chose 3 production scenarios from the modelled outputs to represent typical farming systems in the catchment Cropping Grazing Grazing with a water quality constraint Applied the bio-physical outputs to economic models (2000 ha cropping property at Capella)

13. The trade off between production system and soil loss

14. Conversion from Cropping to Grazing with a water quality constraint

15. Property productivity Cropping Grazing with a water quality constraint

16. Results – marginal economic analysis for first investment period - NPV for change from Cropping

17. The trade off between production system and soil loss

19. Grazing trial results agree with the model Cumulative surface soil movement and beef production over 7 years at (a) the ironbark site and (b) the poplar box site, as grazing pressure increased from zero to high. Richard Silcock, Trevor Hall, Paul Jones & David Waters (2005)

20. The trade off between production system and soil loss at the property level

21. Models indicate managing grazing pressure can reduce soil loss

22. Conversion from Grazing to Grazing with a water quality constraint

23. Steer numbers on the property

24. Property productivity

25. Results – marginal economic analysis for first investment period NPV for change from Grazing

26. Conclusion There is a very close relationship between productivity and profitability within any broadacre agricultural investment Any constraint to productivity across a property will significantly impact on profitability Managing at the catchment or landscape scale to control the sources of diffuse pollutants will cause rural investors to incur significant opportunity costs Combining bio-physical models with economic models allows estimates of the opportunity costs incurred at the property level to be more accurately estimated

27. Questions?