Food and Water Security

Briefing Note Summary

• The ability to meet increased demand for fresh Australian food from North Queensland is at risk due to the lack of a long-term water implementation strategy.

• To cater for growing demand for water, four significant water supply and infrastructure projects are considered essential enablers for the region: Lakeland Irrigation Area Scheme, Cairns Water Security – Stage 1 project, Etheridge Shire Agricultural and Irrigation Precinct Project, and North Johnstone River Diversion Scheme.

• All four projects require the following bilateral commitment and shared investment to facilitate environmental approvals and to progress to construction stage:

º Finalisation of funding agreements for Cairns Water Security – Stage 1, delivering on the Federal and State Government combined Budget commitments of $215m

º Federal and State Governments working together to coordinate development approval processes for Lakeland Irrigation Area Project, including early review of the Mitchell River Water Resource Plan

º $2.5m over two years to progress the Etheridge Agricultural and Irrigation Precinct implementation strategy

º $7m for a full North Johnstone River Diversion Scheme business case.

The Issue

Tropical North Queensland (TNQ) has seen sustained population growth over the past 30 years, underpinned by the expansion of industries including agriculture, tourism, fisheries, education, health, and retail. Throughout COVID, agriculture was a continuing success story for the region and vitally important in driving postCOVID-19 economic recovery. At the forefront of agricultural growth has been the Atherton Tablelands, driven by the Mareeba Dimbulah Water Supply Scheme (MDWSS) with rapid expansion in high-value crops such as avocados, bananas, berries, and sugarcane. Water is now 100% allocated1 and 80% used, with purchase prices rising more than four-fold since 2011, peaking at more than $4000/ML.

To address high prices and supply issues on the Tablelands, short- and long-term action is urgently needed. The Queensland Government, via its Regional Water Assessment Program, is currently undertaking a $3m investigation into possible additional water supply and long-term water security across the broader Tablelands region. In late 2022 a shortlist of five potential projects was identified by the RWA investigation, including the proposed North Johnstone Diversion Scheme. These projects will be further investigated in 2023. Sunwater has carried out much-needed improvements in the MDWSS to provide efficiencies in the short term, but the scheme will also need supplementing with extra supply through the proposed North Johnstone River Diversion Scheme.

In addition, agriculture in areas such as the Lakeland district near Cooktown and surrounding the Gilbert River in Etheridge Shire has the potential to expand rapidly through value crops such as bananas, grains, cotton, legumes, and watermelons. Water security has been a concern for a number of years and is now limiting supply in both regions.

Agricultural exports are vital to FNQ with the industry sector output currently valued at $1.9bn2, constrained mainly by factors such as irrigation and access to market. A landmark supply chain study titled Export 2030 – Fresh Food Fast3 was released in June 2020, which highlighted the potential to double high-value food exports through Cairns Airport within a decade.

Urban demand also continues to increase with Cairns’ population growth averaging 0.9% per annum over the past five years4. This, combined with a long-running history of three million tourists visiting TNQ annually (pre-COVID), means an effective and multi-faceted water supply strategy is required to ensure the growing needs of the region can be met. Addressing this urban need will also reduce the impact on agricultural water supply. In Cairns itself, modelling by the Cairns Regional Council shows that demand for water will outstrip supply within the next five years. As a result, the Cairns Water Security – Stage 1 project is an essential piece of infrastructure to secure urban water supply for Cairns well into the future. In summary, four significant water supply and infrastructure projects are considered essential enablers for water security and growth in the region:

• Cairns Water Security – Stage 1 project

• Lakeland Irrigation Area Project

• Etheridge Shire Agricultural and Irrigation Precinct Project

• North Johnstone River Diversion Scheme.

Background

Water and food security have become priority national policy issues on the back of record drought periods in Australia, as well as disruption to supply chains through COVID-19 and recent flooding. In 2020, the Federal Government committed a further $2bn to the National Water Infrastructure Fund to build resilience in regions and to help grow the agricultural sector. A National Water Grid Authority has also been established to develop investment frameworks. In strengthening northern Australia’s role as a food bowl, substantial feasibility work has progressed in the past few years to explore new agricultural development opportunities. With many of these studies now coming to a close, there are clear priorities for progressing environmental impact and construction activities, and a coordinated approach to development is required.

Cairns Water Security – Stage 1 project: Forecasts indicate that by 2026, Cairns will be at risk of a drinking water shortfall. The Cairns Water Security – Stage 1 project is therefore a critical piece of infrastructure for the city, securing urban water supply well into the next decade. The project was identified as a key priority by Cairns Regional Council’s (CRC) Water Security Advisory Group (WSAG), with the group highlighting that continued population growth means increased storage capacity is urgently required to access more of the plentiful rainfall the region receives during wet season. To reduce the financial burden on Cairns water users, Council has secured combined Budget commitments of $215m from the State and Federal Governments ($107.5m each) towards the project’s capital cost. Delivery of the $215m now relies on funding agreements being finalised with Council. In addition to helping secure the region’s water supply, this funding will deliver an estimated 1658 FTE jobs (direct and indirect) and an estimated $243m in Gross Regional Product (GRP)5 during project construction.

Lakeland Area Irrigation Scheme Project: Regional Development Australia Tropical North, through the National Water Infrastructure Development Fund (NWIDF), funded a strategic business case that investigated new water storage options to expand the Lakeland irrigation area. Once constructed, the proposed dam will store 200,000ML with a secure output of 80,000ML per annum, irrigating up to 10,000ha of highly irrigable land. Federal Government funding of $10m to further develop the detailed business case has seen work advance materially with aerial mapping, geological drilling and sampling, and dry season ecology fieldwork all completed. The draft Reference Design was completed in December 2021, while the detailed business case is scheduled for release in the first half of 2023. Bilateral government support is now required to further the development approval processes for the project, support a proponent through the detailed design stage (including funding through the NWIDF) and accelerate the review of the Mitchell River Water Resource Plan.

Etheridge Shire Agricultural and Irrigation Precinct Project: Etheridge Shire Council, in conjunction with RDA Tropical North, proposes to develop an agricultural and irrigation precinct in the Shire. The project aims to establish protocols that facilitate the approval and expansion of agriculture and horticulture across the precinct on a regional basis. As much as 530,000ha of Class A and B soil is potentially available in the Shire, but there are barriers to water access and security. Around 495,000ML of water is available in the Gilbert River catchment area. A $2.5m investment is proposed for an implementation strategy to leverage the work of the CRC for Developing Northern Australia and the Northern Australia University Alliance, which are conducting research as part of the Water Security for Northern Australia program. This important research will support the Precinct proposal, however the re search on its own will not deliver an implementation strategy – the funding will analyse the best means of accessing water and irrigating up to 50,000ha of land to diversify crop types and drive economic growth in the area.

North Johnstone River Diversion Scheme: Sunwater completed a preliminary feasibility study in early 2020 indicating the diversion scheme could deliver up 50,000ML annually into Lake Tinaroo. In 2021 the State Government announced its $9m Regional Water Assessment Program for three regions, one of which was the Atherton Tablelands. The state says the RWAP will ‘set a roadmap for economic growth, building on previous water supply investigations in each region and will take a comprehensive view of local water needs and identify gaps to be filled. The North Johnstone scheme is one of five priority projects by the initial RWA evaluation. The RWA assessments will set out how infrastructure and non-infrastructure solutions can be used to maximise water supply in each area and drive economic growth’. This study must be a catalyst for much-needed investment in water security on the Tablelands. A $7m investment is sought for a full business case into the North Johnstone diversion scheme.

Next Steps

Development of the four proposed water infrastructure projects would meet a range of state and national policy objectives, including:

• Expanding northern Australia’s agricultural productive capacity – this is nationally significant given the impact of drought on food and water security in southern Australia.

• Increasing northern Australia’s contribution to GDP through an increase in agricultural production.

• Diversifying northern Australia’s economic capabilities to facilitate investment and reduce reliance on tourism.

• Strengthening Australia’s international competitiveness through proximity to Asia.

Our Recommendation

• That the Federal and State Governments deliver on shared Budget commitments of $215m towards Cairns Water Security – Stage 1 by finalising the funding agreements with Cairns Regional Council.

• That the Queensland Government completes and releases its Regional Water Assessment for the Atherton Tablelands by mid-2023, and applies to the National Water Infrastructure Development Fund for $7m for a full business case for the North Johnstone River diversion scheme.

• That the State and Federal Governments work together to facilitate and coordinate the development approval processes for the Lakeland Irrigation Area Scheme Project.

• That the Federal Government gives due consideration to funding the detailed design stage of the Lakeland Irrigation Area Scheme.

• That the Federal Government provides $2.5m over two years for the Etheridge Shire Agricultural and Irrigation Precinct Project implementation strategy.

• That the Queensland Government gives consideration to an early review of the Mitchell River Water Resource Plan.

Sources

1. https://www.sunwater.com.au/schemes/Mareeba-Dimbulah/

2. https://economy.id.com.au/fnqroc/exports-by-industry

3. https://www.advancecairns.com/economic-development/ export-2030/

4. https://profile.id.com.au/cairns/population-estimate

5. https://www.cairns.qld.gov.au/council/projects-and-priorities/ advocacy/security

6. https://statements.qld.gov.au/statements/95451