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Fitzroy and Central West Inc.
Growing Central Queensland
Review
April 2015
Disclaimer: While every care has been taken in preparing this publication, Regional Development Australia Fitzroy and Central West accepts no responsibility
for decisions or actions taken as a result of any data, information, statement or advice, expressed or implied, contained within. To the best of our knowledge,
the content was correct at the time of publishing.
Contents
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1Vision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.4Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Water Infrastructure Development . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1 Fitzroy River Agricultural Corridor . . .
2.2 Mackenzie River Agricultural Corridor .
2.3 Dawson River Agricultural Corridor . .
2.4 Gladstone Agribusiness Corridor . . .
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7
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3. New Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1
3.2
3.3
3.4
3.5
3.6
Potential Agricultural Precincts . . . . . . . . . . . . . .
Existing Water Infrastructure and Telecommunications. . . . .
Proposed Gladstone Agribusiness Corridor Infrastructure . . . .
Proposed Mackenzie River Agricultural Corridor Infrastructure . .
Proposed Fitzroy River Agricultural Corridor Infrastructure . . .
Proposed Dawson River Agricultural Corridor Infrastructure . . .
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4. Transport and Logistics Impediments and Opportunities . . . . . . . . . . . . . . . . . 30
4.1
4.2
4.3
4.4
Proposed Gladstone Agribusiness Corridor Infrastructure . . . . . . . . . . . . . . . . . . .
Proposed Mackenzie River Agricultural Corridor Infrastructure . . . . . . . . . . . . . . . . .
Proposed Fitzroy River Agricultural Corridor Infrastructure . . . . . . . . . . . . . . . . . . .
Proposed Dawson River Agricultural Corridor Infrastructure . . . . . . . . . . . . . . . . . . .
5. Stakeholder Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
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33
34
5.1 Infrastructure providers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.2 Industry Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.3 Research and Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.4 Environment and Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.5 Regional Economic Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.6Landowners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.7 Indigenous Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.8 Agricultural Investment Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6. Agricultural Industry Structure . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
6.1 Setting the Scene for Central Queensland . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.2 Structural Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.3 Business Structure Case Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.4 Increase Returns to Farm Gate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.5 Keep Families as the Cornerstone of Farming . . . . . . . . . . . . . . . . . . . . . . . . 49
6.6 Build Infrastructure for the 21st Century . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.7 Create Agricultural Employment Through Supply Chain Opportunities . . . . . . . . . . . . . . 50
6.8 Reduce Unnecessary Regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.9 Promotes Access to Key Export Markets. . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.10 Focus on Australia’s Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.11 Support Strong and Vibrant Regional Communities. . . . . . . . . . . . . . . . . . . . . . 52
6.12 Maintain Access for All Australians to High-Quality Affordable Fresh Food. . . . . . . . . . . . . 52
6.13 Case Study Investment Ready Cowal Agriculture . . . . . . . . . . . . . . . . . . . . . . . 52
7. Way Forward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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3
Executive Summary
Regional Development Australia Fitzroy and Central West (RDAFCW) has endeavoured to understand what
was needed to enhance the profitability, productivity and competitiveness of the agricultural sector in Central
Queensland. The project operating called, Growing Central Queensland conducted a strategic and systematic
review of stakeholders in the region during 2014.
The six local governments within the Fitzroy Statistical Division, State Government Departments and
Australian Government agencies across Central Queensland met to discuss major cross-regional agricultural
priorities and how to address them. Water, roads, energy and export infrastructure were identified as major
areas for infrastructure investment to support the agriculture sector – the backbone of our rural and remote
communities. Water infrastructure and water availability were seen as the highest priorities for the region.
The Department of Natural Resources and Mines (DNRM) was requested to provide information to inform the
development of a Growing Central Queensland opportunities and investment prospectus. DNRM information
relates to water availability and estimated costs for upgrading infrastructure, vegetation management, land
evaluation studies, and land tenure issues that may support or be required to facilitate the Growing Central
Queensland initiative. The information is provided in sections for each prospective agribusiness corridors,
with the intention that each section contains all relevant information for that corridor. As such there is some
unavoidable information repeated across a number of sections. The main areas of focus includes the:
»» Fitzroy River Agricultural Corridor
This area has been identified through the original Fitzroy Industry and Infrastructure Study, as potential for
development of an agricultural corridor along the Fitzroy River and surrounding region.
Storage
Estimated Cost 2012
($M)
Stored Volume
(‘000 ML)
Cost
($)/ML
Eden Bann Weir Stage 2
171
67
2,552
Eden Bann Weir Stage 3
196
92
2,130
Rookwood Weir
238
117
2,034
»» Mackenzie River Agricultural Corridor
This corridor is a highly productive area with some of the best soils in Central Queensland that produce crops
and cattle.
Storage
Estimated Cost 2012
($M)
Connors River Dam
587
Stored Volume
(‘000 ML)
374
Cost
($)/ML
1,570
»» Dawson River Agricultural Corridor
The proposed water infrastructure development on the Dawson River consists of the construction of both the
Nathan Dam with a capacity of approximately 880,000ML and the Duaringa Weir with a capacity of 6,000ML.
Storage
Estimated Cost 2012
($M)
Nathan Dam
630
Stored Volume
(‘000 ML)
888
Cost
($)/ML
709
»» Gladstone Agribusiness Corridor
Hosting one of Australia’s busiest sea ports with associated infrastructure supporting the major industries of
the region, Gladstone is the logistical capital of Northern Australia and the ideal setting to locate a hub looking
exclusively at the value-adding field of agricultural transport and logistics.
4
Another three clear areas of interest emerged from the process:
»» New infrastructure
»» Impediments to existing transport and logistics systems
»» Industry structure
This review has identified new infrastructure priorities as well as impediments to existing transport and
logistics flows of agriculture in Central Queensland. It also examines issues and broaches discussion on
solutions to current agricultural industry structures in Central Queensland. These include:
»» It is the Government’s role to invest in water infrastructure based on the success of previous investments in
the region (Fairbairn Dam) and the resulting catalytic change in agricultural productivity
»» Consistent, fast and reliable telecommunications are fundamental to operating a business in rural and
regional Australia
»» There are further efficiencies (up to 60%) to be gained in upgrading existing irrigation and channel
schemes
»» Given the agricultural debt level and succession planning issues, there is market failure in the service
provision of organisations who take farming operations from the ground up to “investment ready” (The
Growing Central Queensland review provides a number of solutions)
»» The Australian Government gives priority to merit based projects that are regional or cross regional in their
approach to agricultural competitiveness and development
»» A regional approach to prioritising improvements to agricultural transport and logistics supply chains be
developed in a systematic cost/benefit manner
Fundamentally, Growing Central Queensland is a cohesive regional approach to promote and develop
competitive advantages in:
»» A large river system and a associated water availability
»» Land resources
»» Security of water
»» Freehold land and productive soils
»» Market experience (Fairbairn Dam)
»» CQUniversity and educational institutions
»» People with multi-disciplinary knowledge and skills
»» Port and air proximity to the world’s fastest growing markets
»» Established road, rail, port and air infrastructure
5
Regional Councils and Investment Corridors
Growing Central Queensland
Charters
Towers
Regional
Mackay
Regional
Whitsunday
Regional
Mackay
Cairns
Rockhampton
Longreach
Brisbane
R.
s
R.
Proposed Connors Dam
Styx R.
Isaac
Regional
ac
Co n
no
r
Isa
c
aa
Is
Livingstone
Shire
aC
k.
kenzie
ac
F itzroy R.
Eden Bann Weir
2
Emerald
R.
Barcaldine
Regional
Rockhampton
Rockhampton
Regional
Proposed Rockwood Weir
a
No go
4
Gladstone
De
e
Comet R.
R.
Woorabinda
Aboriginal
Shire
D on
Ca
lliope
ne
Gladstone
Regional
R.
3
Boy
Central
Highlands
Regional
R.
R.
T heres
M
R.
R.
1
D
a
oa
.
ws
R
o
.
No
nR
g
Bundaberg
Regional
Blackall
Tambo
Regional
Banana
Shire
Proposed Nathan Dam
North
Burnett
Regional
Da wso n R.
Gympie
Regional
Murweh
Shire
Maranoa
Regional
South Burnett
Regional
Western
Downs
Regional
Roma
Legend
Fitzroy Statistical Area Level 4
Barcaldine Regional
Major Places
Blackall Tambo
Regional
Major Watercourses
LGA
Banana
Charters Towers
Regional
Gladstone Regional
Bundaberg Regional
Gympie Regional
Central Highlands
Regional
Isaac Regional
Western Downs
Regional
1
Mackenzie River Agricultural Corridor
Whitsunday Regional
2
Fitzroy River Agricultural Corridor
South Burnett
Regional
Woorabinda
3
Dawson River Agricultural Corridor
Toowoomba Regional
Dams
4
Gladstone Agribusiness Corridor
Livingstone
Paroo
Mackay Regional
Rockhampton
Regional
Maranoa Regional
Murweh
North Burnett Regional
1:2,200,000
(at original A3 size)
0
25
50
75
100
125
Kilometres
Coordinate System: Geocentric Datum of Australia 1994
6
1.Overview
1.1Vision
Growing Central Queensland is a regional initiative to capture sustainable agribusiness opportunities for
individuals and communities across Central Queensland.
1.2Purpose
To promote Growing Central Queensland as a key vehicle to encourage the development of new agriculture
infrastructure, through attracting public and private investment. This will lead to a number of infrastructure
priorities and individual investment prospects being identified and implemented.
In the first instance, Beef 2015 will be used as an opportunity to promote the initial instalment of identified
priority investment opportunities.
1.3Background
The six local governments within the Fitzroy Statistical Division (Level 4), State Government Departments and
Australian Government agencies across Central Queensland met to discuss major cross-regional agricultural
priorities and how to address these.
Central Queensland, for the purpose of this document, comprises the six local government areas of Banana
Shire Council, Central Highlands Regional Council, Gladstone Regional Council, Livingstone Shire Council,
Rockhampton Regional Council and Woorabinda Aboriginal Shire Council. Future development may also include
Isaac Regional Council. The region under this project has a total land area of 117, 813 km2.
Road, water, energy, telecommunications and export infrastructure were identified as major areas for
investment to support the agricultural sector – the backbone of our rural and remote communities.
1.4Process
It has been agreed that Regional Development Australia Fitzroy and Central West would facilitate the
development of the Growing Central Queensland opportunities and investment prospectus. This would draw
on information from studies conducted by the:
»» Queensland State Government Department of Agriculture and Fisheries (DAF)
»» Queensland State Government Department of State Development (DSD)
»» Queensland State Government Department of Natural Resources and Mines (DNRM)
»» CQUniversity
»» Local Government Authorities
A Steering Committee was established that comprised of Regional Development Australia Fitzroy and Central
West, DAF, DNRM and DSD. Queensland State Government Department of Agriculture and Fisheries funded
a Project Officer position for a twelve week period to undertake a consultation process with stakeholders to
determine what was needed to create a new wave of agricultural investment in Central Queensland.
Since that period, a number of local government authorities have contributed funding to continue the project
up to 30 June 2015. The systematic consultation process identified a number of possible opportunities in the
infrastructure arena, a number of impediments in the transport and logistics connectivity of the region and
preparedness by landowners to consider fundamental changes in their business structures.
7
2. Water Infrastructure Development
The primary “ask” for new infrastructure across all stakeholders has been the planning provision for water
storage on the Dawson, Connors and Fitzroy Rivers. Currently the Growing Central Queensland Project
Officer is working with Sunwater and Gladstone Area Water Board to develop the case for the economic
benefit of agriculture for building various water infrastructure proposals. DSD has facilitated a meeting
between Rockhampton Regional Council, GAWB and Office of Coordinator General where it was agreed a
scenario will be developed describing potential agricultural use of the water, for inclusion in the EIS which is
being prepared.
The focus on the agricultural benefits of building water infrastructure in conjunction with its benefits for the
resource industry was a significant shift in thinking around agricultural production at an Australian Government
level. The Growing Central Queensland project was using this positive change to promote long held regional
priorities including Rookwood and Eden Bann Weirs, Nathan Dam and Connors River Dam.
The following figures were referenced directly from the Northern Australia Food and Fibre Supply Chains Study
by Andrew Ash (CSIRO) and Trish Gleeson (ABARES) August 2014:
As an example, the proposed Rookwood and Eden Bann Weirs will enable holding capacity for an additional
112,450ML (mega litres) of water potentially for agriculture in the Fitzroy/Dawson/Mackenzie region.
The report notes: “Irrigated agriculture can produce a gross value of production of between $500,000 and
$1,200,000 per GL (gigalitres) of water used for broad acre crops and well over $10,000,000 per GL for
high value crops”.
So logically 1000ML = 1GL
Broad Acre Crops
112,450ML/1000 = 112.45GL
112.45GL x $500,000 = $56,225,000
112.45GL x $1,200,000 = $134,940,000
$56.22M - $134.94M per annum increase per annum for broad acre production.
High Value Crops
112.45GL x $10,000,000 = $1,124,000,000
$1.124 billion per annum increase in high value agricultural production.
The scope of the Growing Central Queensland’s water infrastructure opportunities assessment and investment
prospectus have included (but not limited to) the following potential agriculture precincts:
»» Fitzroy River Agriculture Corridor
»» Mackenzie River Agriculture Corridor
»» Dawson River Agriculture Corridor
»» Gladstone Agribusiness Corridor
8
2.1 Fitzroy River Agricultural Corridor
The “Fitzroy River Agricultural Corridor Map” in Appendix 1a shows the locations of the infrastructure, and the
current and proposed supplemented water supply, as well as further detail around allocations.
Preliminary estimates from 2012 of the costs for water infrastructure are:
»» Lower Fitzroy River projects (Eden Bann and Rookwood)
»» Eden Bann - $171 million Stage 2 & $196 million Stage 3
»» Rookwood Weir - $238 million
»» Connors River Dam - $587 million for the dam development (note the original project included significant
pipeline costs in addition to the dam itself)
»» Nathan Dam - $630 million
Eden Bann Weir
»» The raising of Eden Bann by four meters would increase the capacity by about 31 820 ML. Using two metre
flap gates to further increase the full supply level to six meters above the existing level would increase the
capacity by about 56 320 ML.
Rookwood Weir
»» The volume of water available at Rookwood Stage 2 would be approximately 119, 000ML (RL 49 metres)
»» Once completed, it would be expected that Rookwood would fill in a short period of time during a wet
season. A 1000 cumec flow in the Fitzroy would provide 86400 ML in 24 hours
The current Fitzroy Basin Resource Operations Plan (September 2014) provides water trading rules for the
Fitzroy Barrage and Lower Fitzroy Water Supply Scheme’s that includes ability to trade from the upstream limit
of Eden Bann down to Fitzroy Barrage (Lower Fitzroy zones C & B to Fitzroy Barrage zone A). At present there
is no ability to permanently trade from the Barrage into the Lower Fitzroy.
Water Sharing Rules for unsupplemented water allocations in the Fitzroy Water Management Area provide for
trading dependent on flow conditions. If the Lower Fitzroy Infrastructure Project was to proceed, a review of
the water trading rules would be required that may account for changes to location from the Barrage to the
Lower Fitzroy. This may provide Rockhampton Regional Council with ability to trade part of their high priority
allocation.
Existing unsupplemented water allocations in the lower Fitzroy have been amended in the new Fitzroy Basin
Resource Operations Plan to include a daily volumetric limit and an increase in the maximum rate of take.
Land Evaluation Studies
Broadscale soil and irrigated land suitability mapping is available for a 5km wide strip either side of the Fitzroy
River. The location of the existing land evaluation studies is shown on the map in Appendix 1b.
Broad scale (1:100 000 scale) soil mapping and irrigated land suitability mapping is available for a 5km wide
strip either side of the Fitzroy River for the section delineated as Area 2 and beyond. It forms part of the
investigation area which extends from the junction of the Dawson and Mackenzie Rivers, east of Duaringa,
downstream to the Rockhampton City boundary (Forster and Sugars 2000). Three irrigation methods which are
commonly used (furrow, overhead spray and trickle/microspray) and ten crops commonly grown within the
Fitzroy catchment were selected in the land evaluation. The ten crops are cotton, sorghum, wheat, soybeans,
navy beans, peanuts, citrus, macadamia, grapes and vegetables.
9
The total area of suitable land for one or more irrigation methods with one or more crops over the 250km
length of riparian land is 59 238 ha or 29.3% of the study area. Because of the relatively narrow and dissected
nature of the Fitzroy River valley and the presence of hilly and mountainous terrain, the areas suitable for
irrigated cropping are scattered throughout the study area.
No soil mapping is available for the remainder of the Fitzroy River Agriculture Area.
For an improved level of confidence in the land evaluation and suitability across the Fitzroy agricultural
corridor, more detailed surveys are recommended. Scales of 1:50000 or better are recommended. The furrow
irrigation assessment is not considered reliable. A detailed soil survey (1:25 000 scale or better) is required to
adequately determine areas of suitable cropping land for furrow irrigation.
Vegetation Management
Recent reforms to the vegetation management framework introduced a number of new provisions for
landholders to manage remnant vegetation on their properties in relation to agricultural purposes. Limited
clearing can be done under a self-assessable code for improving operational efficiency of existing agriculture;
however expansion of agriculture would require a development permit. Appendix 1c.
There is a provision to apply for a development permit for high-value agriculture and irrigated high-value
agriculture to support clearing of native vegetation to establish, cultivate and harvest crops. Clearing of
endangered and of concern regional ecosystems for these clearing purposes attracts higher level constrains to
applicants in the form of environmental offset or significant beneficial outcome requirements.
Based on the current regional ecosystems mapping, significant areas are already cleared of remnant
vegetation and are classed as category X on the regulated vegetation map. Any new cropping or other
agriculture in these areas would not have any vegetation management requirements. The remnant vegetation
in those areas is largely located in the riparian zones of watercourses or on hills and ranges.
10
Appendix 1a
11
Appendix 1b
12
Appendix 1c
13
2.2 Mackenzie River Agricultural Corridor
Water
In the Mackenzie River Agricultural Corridor (area 1) there is currently 281 000ML of allocated water and
29 600ML of unallocated water. Current entitlements are available to be traded.
The proposed Connors River Dam development near Mt Bridget on the Connors River may provide opportunity
for agricultural and industrial development in the Mackenzie River Agricultural Corridor.
The “Mackenzie River Agricultural Corridor Map” in Appendix 2a shows current and proposed water supply.
The current Fitzroy Basin Resource Operations Plan (September 2014) provides water trading rules for the
Nogoa Mackenzie Water Supply Scheme that includes ability to trade from the upstream limit of Fairbairn
Dam down to Dawson River/Springton Creek Junction (Nogoa Mackenzie zones B to N). Water Sharing Rules
for unsupplemented water allocations in the Nogoa Mackenzie Management Area provide for water trading
dependent on flow conditions.
Land Evaluation Studies
The location of the existing land evaluation studies is shown on the map in Appendix 1b.
Soil mapping is available at 1:50 000 scale for five narrow transects (1km wide) mostly extending for 5km
either side of the Mackenzie River (Mc Carroll 1998). Approximately 3 000 ha were surveyed and assessed for
irrigated cropping. Three irrigation methods were considered, furrow, overhead spray and trickle/micro spray,
using cotton, peanuts, and citrus trees respectively as representative crops.
A separate reconnaissance survey to extrapolate transect results to other potential irrigation areas along
the Mackenzie River was undertaken (Mc Carroll 1998). Some 88 877 ha are mapped and estimated to be
potentially suitable for irrigated farming using a range of methods within 5km either side of the Mackenzie
River. The potential irrigation areas are mapped at 1:250 000 scale.
No soil mapping is available for the remainder of the Mackenzie River Agriculture Area. Appendix 2b.
Vegetation Management
Recent reforms to the vegetation management framework introduced a number of new provisions for
landholders to manage remnant vegetation on their properties in relation to agricultural purposes. Limited
clearing can be done under a self-assessable code for improving operational efficiency of existing agriculture;
however expansion of agriculture would require a development permit.
There is a provision to apply for a development permit for high-value agriculture and irrigated high-value
agriculture to support clearing of native vegetation to establish, cultivate and harvest crops. Clearing of
endangered and of concern regional ecosystems for these clearing purposes attracts higher level constrains to
applicants in the form of environmental offset or significant beneficial outcome requirements.
Based on the current regional ecosystems mapping, significant areas are already are already cleared of
remnant vegetation and are classed as category X on the regulated vegetation map. Any new cropping or
other agriculture in these areas would not have any vegetation management requirements.
The remnant vegetation in those areas is largely located in the riparian zones of watercourses or on hills
and ranges. The remnant riparian vegetation within the Mackenzie catchment is anticipated to be largely
unsuitable for high-value agriculture purposes due to conservation status, i.e. endangered, of concern, the high
potential for inundation, and the maximised extent being already cleared within riparian buffers.
14
Appendix 2a
15
Appendix 2b
16
2.3 Dawson River Agricultural Corridor
Water
In the Dawson River Agricultural Corridor there is currently 107 200 ML of allocated water, and a total of
105 500ML of unallocated water. Of the 105 500ML, 90 000ML is reserved for Nathan Dam and 11 500ML is general
reserve water in the Upper Dawson Sub catchment area. Current entitlements are available to be traded.
If the proposed Nathan Dam were constructed, up to 90 000ML of additional water would become available,
however not all of the water will be available for agricultural purposes. The project is based on projection of
water demands to meet urban, industrial, coal mining and agricultural requirements.
There is potential for up to 36, 500 ML of treated CSG water available to irrigators and industry in the Upper
Dawson Sub-Scheme (Glebe Weir to Moura). SunWater Limited is responsible for the distribution of treated
CSG water.
The “Dawson River Agricultural Corridor Map” in Appendix 3a shows the locations of the infrastructure, and
the current and proposed supplemented water supply, as well as further detail around allocations. The current
Fitzroy Basin Resource Operations Plan (September 2014) provides water trading rules for the Dawson Valley
Water Supply Scheme that includes ability to trade from the upstream limit of Glebe Weir to the downstream
end of the Boolburra waterhole (Dawson Valley zones B to M).
Water Sharing Rules for unsupplemented water allocations in the Dawson Valley Water Management Area
provide for trading dependent on flow conditions.
Land Evaluation Studies
The location of the existing land evaluation studies is shown on the map in Appendix 1b.
Medium intensity (1:50 000 scale) soil mapping and an assessment for irrigated cropping has been undertaken
along seven transects (1km wide) across the Dawson River from north of Baralaba to south of Moura. This soil
mapping comprises 5 655 ha of land (Mc Carroll and Forster 1999). Three irrigation methods were considered,
furrow, overhead spray and trickle/micro spray, using cotton, peanuts, and citrus trees respectively as
representative crops.
A separate reconnaissance survey to extrapolate transect results to other potential irrigation areas along
the Dawson River was undertaken. The study area was a 10 km wide, 165 km long strip of land extending
downstream from the proposed Nathan Dam site to the Mackenzie-Dawson River junction. Some 61 460 ha
are mapped and estimated to be potentially suitable for irrigated cropping. The potential irrigation areas are
mapped at 1:250 000 scale.
No soil mapping is available for the remainder of the Dawson River Agriculture Area.
For an improved level of confidence in the land evaluation and suitability across the Dawson River agricultural
corridor, more detailed surveys are recommended. Scales of 1:50000 or better are recommended to infill areas
between the existing transects. Estimated costs for a better scale soil survey and land evaluation, by DNRM, is
approximately $270 000 per annum per 25 000 ha.
17
Vegetation Management
Recent reforms to the vegetation management framework introduced a number of new provisions for
landholders to manage remnant vegetation on their properties in relation to agricultural purposes. Limited
clearing can be done under a self-assessable code for improving operational efficiency of existing agriculture;
however expansion of agriculture would require a development permit.
There is a provision to apply for a development permit for high-value agriculture and irrigated high-value
agriculture to support clearing of native vegetation to establish, cultivate and harvest crops. Clearing of
endangered and of concern regional ecosystems for these clearing purposes attracts higher level constrains to
applicants in the form of environmental offset or significant beneficial outcome requirements.
Based on the current regional ecosystems mapping, significant areas are already cleared of remnant
vegetation and are classed as category X on the regulated vegetation map. Any new cropping or other
agriculture in these areas would not have any vegetation management requirements. The remnant vegetation
in those areas is largely located in the riparian zones of watercourses or on hills and ranges. Appendix 1b.
The remnant riparian vegetation within the Dawson catchment is anticipated to be largely unsuitable for
high-value agriculture purposes due to conservation status, i.e. endangered, of concern, the high potential for
inundation, and the maximised extent being already cleared within ripian buffers.
18
Appendix 3a
19
Appendix 3b
20
2.4 Gladstone Agribusiness Corridor
Land Evaluation Studies
Soil mapping and land suitability assessment at 1:50 000 scale is available for the Yarwun and Targinnie areas
covering approximately 8 300 ha in area (Ross 1999,2000). Acid Sulfate Soils mapping for the coastal fringe
is characterised by acid sulfate soils with high acid generation potential (Ross 2004, 2005, 2007). While Acid
Sulfate Soils would not preclude an Agribusiness Corridor, development costs could be increased due to Acid
Sulfate Soils management and treatment.
No soil mapping is available for the remainder of the Gladstone Agribusiness Corridor. Appendix 4a.
Vegetation Management
Recent reforms to the vegetation management framework introduced a number of new provisions for
landholders to manage remnant vegetation on their properties in relation to agricultural purposes. Limited
clearing can be done under a self-assessable code for improving operational efficiency of existing agriculture;
however expansion of agriculture would require a development permit.
There is a provision to apply for a development permit for high-value agriculture and irrigated high-value
agriculture to support clearing of native vegetation to establish, cultivate and harvest crops. Clearing of
endangered and of concern regional ecosystems for these clearing purposes attracts higher level constrains to
applicants in the form of environmental offset or significant beneficial outcome requirements.
However, as this area relates to more commercial and industrial development servicing agriculture, existing
provisions provide for an application process to either the local government or DSD depending on the
circumstances, and whether the land falls with the Gladstone State Development Area (GSDA). Depending
on the zoning of the area and whether it is urban (including industrial and commercial) or not, clearing of
endangered and of concern regional ecosystems may also require environmental offsets. The majority of the
remnant vegetation in this area is mapped on the current regional ecosystem map as least concern; however
there are scattered patches of concern.
21
Appendix 4a
22
3. New Infrastructure
Gladstone
Agribusiness
Corridor
Mackenzie River
AgriculturAL
Corridor
Fitzroy River
AgriculturAL
Corridor
Dawson River
AgriculturAL
Corridor
Water Infrastructure
Water Infrastructure
Water Infrastructure
Water Infrastructure
Gladstone Industry
Development Corridor
Inland Port Concept
including Agriculture
containerisation
Gracemere Industrial
Estate
Roadtrain access to
all Rockhampton
meatworks
Port Access Road
Stage 2 and 3
Specific roading as
identified around
grain transport and
management
Yeppoon Gateway
Industrial Estate
Upgrading of
Sheepstation, Oxtrack
Creek and Boam
Creek Bridges
Re-invigorate
Seafood Export
Market
New Abbatoir
Linking Brown and
Blue Defence routes
to allow expandsion
of agriculture
Beef Road access
upgrades Fitzroy
Development Road
Rail to Fishermans
Landing
New Industry
oil seeds processing
Seal road to Stanage
Bay
Upgrade Thangool
Airport
Regional branding of
agricultural product
Boyne Valley
Consistent reliable
telecommunications
coverage
Education of
landholders
around agricultural
investment
Woorabinda Abbatoir
Consistent reliable
telecommunications
coverage
Consistent reliable
telecommunications
coverage
Consistent reliable
telecommunications
coverage
Second bridge
Calliope River
23
The consultation process was determined after understanding the interaction between various stakeholder
groups (Diagram 1) and levels of government.
Diagram 1
Australian
Government
Queensland
Government
Pivot North
Insurance Institution
Financial Institution
Advocates
Agricultural
Competitiveness
Green Paper
Investors
Growing
Central
Queensland
Private Investment
Public Investment
Enablers
Suppliers
Landholders
Indigenous Corporation
DTMR
Ergon
Rail
Airport
RDAFCW
DSD
DNRM
DAF
Local Councils
Queensland
Agricultural
Strategy
Agforce
QFF
Grain Corp
CQU
CSIRO
The Growing Central Queensland Steering Committee was clear in its intention to position the project within
the parameters of both Australian and Queensland State policies for agriculture.
The former Chair of RDAFCW and the Project Officer, met with the Office of Northern Australia in relation to the
PIVOT NORTH Inquiry into the Development of Northern Australia: Final Report by the Joint Select Committee
on Northern Australia. The report referenced the construction of the Eden Bann and Rookwood Weirs in
conjunction with the development of the Fitzroy River Agricultural Corridor as a project of significance in
increasing agricultural productivity and prosperity in the region.
The PIVOT NORTH Inquiry (Chapter 4) discussed the impediments to growth in Northern Australia and
nominated prescriptive policy application in the areas of:
»» Population
»» Absence of capital infrastructure
»» Absence of social infrastructure
»» Affordability – especially with regard to development costs, power costs and insurance
»» Government – especially in regard to taxation, land tenure, approvals processes and air transport regulation
»» The need for standardisation across jurisdictions
The report went on to identify that “of Northern Australia’s Regions, Darwin, Mackay and Rockhampton did not
share the constraints of the north as a whole and were competitive in their own right”.
24
The Agricultural Competitiveness Green Paper, released by the Australian Government in October 2014, outlined
agricultural policy principles (summarised below) as fundamental to the future of agriculture in Australia.
Key actions include:
»» Planning for development in regional Queensland
»» Infrastructure services for regional growth
»» Making it easier to do business in regional Queensland
»» Growing regions: capitalising on economic drivers
»» Attracting and retaining people in regional Queensland
»» Communicating and promoting the regions potential
3.1 Potential Agricultural Precincts
Local Governments of Livingstone, Rockhampton, Gladstone, Woorabinda, Banana and Central Highlands were
individually consulted about their priorities for infrastructure, transport and logistics and asked to identify any
incentives they felt would increase agricultural investment both locally and at a regional level.
The Local Government responses were grouped under four potential investment areas that made up
Central Queensland:
Fitzroy River Agricultural Corridor
The Fitzroy River Agricultural Corridor has been identified through the original Fitzroy Industry and Infrastructure
Study, as potential for development of an agricultural corridor along the Fitzroy River and surrounding region.
Within this area, the potential exists to establish intensive livestock and horticultural enterprises. There is also
opportunity for landholders and investors to develop and expand current operations.
»» Suitable for development of several large scale beef cattle feedlots, piggeries and some potential for
horticulture
»» Studies indicated feedlots as most economically attractive investment (2006)
»» Close to meatworks, labour force and good access to grain
»» Detailed studies completed and nine potential development areas identified (all greenfield sites)
»» Has the support of State and Local Governments
»» Public consultation undertaken (2007)
Mackenzie River Agricultural Corridor
The Mackenzie River is a highly productive area with some of the best soils in Central Queensland that
produce crops as diverse as wheat, chickpea, sorghum, maize, leucaena, cotton and peanuts. The area also
produces cattle for all markets from stud and organic to prime EU steers and general fat and store markets.
»» Established agricultural node with a mixture of irrigated and dryland cropping, cattle grazing and a feedlot
»» Large additional areas of land suitable for wide variety of irrigated agriculture
»» EIS for Connors River Dam completed and no environmental impediment to development
»» Driven by a group of motivated landholders seeking government assistance
25
Dawson River Agricultural Corridor
The Dawson River Agricultural Corridor which is downstream from the proposed Nathan Dam will make water
available along 250km of the river. Land evaluations have identified 60,000ha of land suitable for irrigation
development for predominately cotton, grains, pulses, peanuts and horticulture.
The proposed water infrastructure development on the Dawson River consists of the construction of both the
Nathan Dam with a capacity of approximately 880,000ML and the Duaringa Weir with a capacity of 6,000ML.
This makes it possible to provide water along a 250km stretch of the river. The suitable parcels of land are
scattered with the majority being on the western side of the river. For the most part these are heavier soils
suited to crops and pastures. The largest contiguous areas are just south of Moura and around the site of the
proposed Duaringa Weir.
»» Cost Benefit Studies undertaken indicating cotton as most economically attractive crop
»» Potential for horticulture and feedlots
»» Builds on existing agriculture in the Dawson Valley Irrigation Area
»» EIS for Nathan Dam completed and no environmental impediment to development
»» Number of small towns along the river should cope with additional labour influx
Gladstone Agribusiness Corridor
Hosting one of Australia’s busiest sea ports with associated infrastructure supporting the major industries of
the region, Gladstone is the logistical capital of Northern Australia and the ideal setting to locate a hub looking
exclusively at the value-adding field of agricultural transport and logistics.
The Queensland Government has established the Gladstone State Development Area (GSDA) north of
Gladstone to cater for future industrial development (22,000ha). This massive tract of land dwarfs other
industrial land precincts around the State but mostly remains under developed and under serviced. In early
2014 the State revised the development scheme for the GSDA which will provide for the orderly development
of the land for a broad range of industrial uses.
While the GSDA is already home to a number of major industries and is the likely site for more in the future,
ultimate development will depend on the ability of smaller scale operations to develop greenfield sites.
The provision of trunk infrastructure by the State will serve as the catalyst that will kick-start broad scale
development that will in turn provide the economic platform to sustain population growth.
26
3.2 Existing Water Infrastructure and Telecommunications
There were two discrete issues raised by stakeholders around existing water infrastructure and
telecommunications. While there are existing systems in place, the services provided by the infrastructure
either did not deliver at all or were considered unreliable. These two issues deserve special comment as the
augmentation or addition to the systems would effectively class them as new infrastructure.
The issues around water infrastructure were detailed in the following case study based on a submission by the
Theodore and Emerald Channel Systems Local Management Arrangements.
Theodore and Emerald Channel Systems Local Management Arrangement (LMA)
Schemes
Both Schemes have done extensive work to model how the assets can be modified, and modernised to
increase Gross Value of Production from the current hectares of irrigation and allow full use of the irrigation
allocation, securing processing infrastructure servicing the Central Highlands and Dawson and Callide Valleys.
Specific examples include:
Automation of Distribution Assets
Automation has considerable benefits for both irrigation schemes through prompt and accurate delivery,
reduced staffing costs, improved safety, significant environmental outcomes, and the ability to accurately
measure performance of all assets.
Metering
Both Emerald and Theodore Schemes currently rely on Dethridge meter wheels to measure customer water
use. They do not meet the requirements of the National Framework for Non-Urban Water Metering.
Channel and Other System Improvements
The Theodore Channel System was originally designed and built in the 1920s and the Emerald Scheme in
1968. Much of the critical infrastructure’s operational parameters have changed so significantly that they are
incapable of being operated efficiently.
Lining the channels would improve the flow rate which would reduce losses by up to 5%. This would also
improve the viability of properties affected by seepage from channels. The Theodore Interim Board has also
identified that significant efficiencies could be made by installing pipe to deliver stock and domestic users as
an alternative to the open channel network.
Further Development of Irrigation Area (Theodore Irrigation Scheme)
With the introduction of beneficial water from coal seam gas extraction to the Dawson Valley Supplemented
Scheme, the potential of additional water may provide significant opportunity for expansion of irrigated areas
both along the Dawson River and adjacent to the Theodore Channel System.
Direct Cost Benefits from Investment into Emerald and Theodore Irrigation Schemes
Current Gross Value Product produced by each Scheme is estimated to be $9.4 million per annum for Theodore
and $132 million per annum for Emerald.
Theodore Interim Board commissioned Dawson Valley Supplemented Scheme to calculate the increase in
Gross Value Product from optimising the existing 2800ha of irrigation with modern and efficient distribution
infrastructure. The conservative assessment was that Gross Value Product would increase from $9.4 million to
$14.7 million, up 56% on current value.
27
The Emerald Interim Board also believed that the improvements would provide significant improvements to
the Gross Value Product from the Emerald Scheme.
The opportunities for infrastructure investment would provide extremely effective return on capital when
compared with developing new country for irrigation. There are few or no environmental, economic or social
risks from investing in these established irrigation areas which underpin all cropping activity and infrastructure
in Central Queensland.
The challenge is the raising of capital funds by the local boards to improve and develop the irrigation
infrastructure, without substantial subsidies by all levels of government.
Telecommunications
All stakeholders commented on the inconsistency of telecommunications service and its effect on the
ability to do business in rural areas. Download times for internet and “black spots” for phone coverage were
consistently raised as primary issues of concern.
An example through Queensland Cotton Growers was around access to weather and farming information in a
timely manner. Being able to utilise new and more efficient technologies does not happen due to poor or no
mobile phone and internet access.
Another example used was the new John Deere tractors that provide a satellite linkup computer and phone
service in real time with up to date information to operators. The tractor technology can track and use
precision agricultural techniques in a global framework, yet the operator cannot call his or her house on their
mobile phone.
3.3 Proposed Gladstone Agribusiness Corridor Infrastructure
»» Gladstone State Development Area to be more strongly promoted and utilised
»» Port Access Road Stage 2 and 3
»» Second bridge constructed across Calliope River
»» Coordination of 100-200+ agricultural containers (cold storage needed) with container exchange matching
to make shipping viable
»» Re-invigorating of the Gladstone seafood export market
»» Phone coverage improvements regionally
»» Boutique agricultural product farming in Boyne Valley region
3.4 Proposed Mackenzie River Agricultural Corridor Infrastructure
»» Inland Port concept Including agriculture containerisation
»» Specific road construction as identified around grain transport and management
»» New abattoir
»» New oil seed processing industry
28
3.5 Proposed Fitzroy River Agricultural Corridor Infrastructure
»» Gracemere Industrial Estate future development
»» Specific road construction around potential water infrastructure
»» Education of landholders around investment opportunities
»» Gateway Industrial Estate (Yeppoon)
»» Linking Brown and Blue Defence routes to allow expansion of agriculture on Capricorn Coast
»» Seal road to Stanage Bay
3.6 Proposed Dawson River Agricultural Corridor Infrastructure
»» Road train access to abattoirs in Rockhampton
»» Seal Fitzroy Development Road
»» Upgrade Thangool Airport
»» New abattoir for Woorabinda
»» Upgrade of Oxtrack Creek Bridge, Boam Creek Bridge and Sheepstation Bridge
29
4.Transport and Logistics Impediments and Opportunities
Gladstone
Agribusiness
Corridor
Rail containiseation
direct to ship at
Auckland Port
required for
agricultural product
containerisation
(100+)
No cold storage
facility for
containerisation to
eastern seaboard
from ship to market)
required (Gladstone
State Development
Area potential)
Opportunity to link
Biloela through
Calliope to port
access road (stage
2 for road trains to
Gladstone Port)
Mackenzie River
Agricultural
Corridor
Required coperation
of thre rail providers
to coodinate
successful agriculture
freight
Uploading from triple
to double vehicles
required going to
port
Ageing water
infrastructure and
inadequate water
efficiency in irrigation
schemes
Specific road
upgrades needed
achieve B-double
vehicle standard
Fitzroy River
AgriculturAL
Corridor
Limitation of rail
transport to Eastern
Seaboard on main
rail route through
Rockhampton
No significant freight
storage capacity at
Rockhampton Airport
Road infrastructure
around proposed new
water infrastructure
Percieved water
quality issues of
Fitzroy River
Road train access
from Central West to
Ports and abattoirs
Containerisation
facilities need
upgrading at Barney
Point
Gladstone Port
leasing policy
Fishermans Landing
an option for
live cattle export
but relatively
undeveloped site
30
Road train access
to abattoirs and
Gladstone Port
Dawson River
AgriculturAL
Corridor
Upgrading of
Sheepstation, Oxtrack
Creek and Boam
Creek Bridges
Specific road
upgrades needed for
road train capacity
Logistical issues with
the coordination of
road/rail/storage
linkages
Road train access
from Central West
to abattoirs and
Gladstone Port
4.1 Proposed Gladstone Agribusiness Corridor Infrastructure
»» Rail containerisation direct to Gladstone Port is not currently available due to lack of coordinated bulk
freight to Gladstone Harbour.
»» There is currently no cold storage facility for containerised agriculture freight (apart from limited gen
sets). This capacity would enable large retail chains (ALDI) and agricultural product to be warehoused for
distribution up the eastern seaboard and held for loading outbound facilitating container exchange. The
Gladstone State Development Area would be an appropriate and strategic area for this to happen.
»» No southern access to Gladstone Port for road trains. All road train freight is currently broken down into
B-Doubles at Gracemere and trucked to Port. If Sheepstation Bridge between Biloela and Calliope was
upgraded to road train capacity then agriculture product could possibly come in from the Central West via
Biloela, Mt Larcom and on the Port Access Road stage two and directly into the Gladstone Port. This would
improve transport productivity by 50%. Also needing upgrade are the two bridges of Oxtrack Creek and
Boam Creek on the Eidsvold and Cracow Roads.
»» Containerisation facilities need upgrading at Fisherman’s Landing. Fisherman’s Landing has the potential to
handle live cattle exports. Patricks currently have the capacity to load and unload containers at Auckland Point.
»» The Gladstone Port leasing policy may change the model of public/private interaction around the provision
of port services.
4.2 Proposed Mackenzie River Agricultural Corridor Infrastructure
Rail Services and Infrastructure
The Transport, Housing and Local Government Committee (THLGC) recently conducted a parliamentary inquiry
that was focused on ways to expand the use of rail freight to support the agricultural sector, by “planning
strategically-located, inter-connected hubs”. Recommendation 30 of the THLGC report expands on this theme
by proposing that Governments “establish a freight authority to work urgently with industry stakeholders and
relevant local governments along the key agricultural (rail) freight routes to:
»» Identify optimal locations and linkages for a series of warehousing and intermodal terminal or inland
port solutions
»» Engage and co-ordinate with interested stakeholders to identify and remove barriers to progressing
these projects”.
A key principle of effective supply chain management is the aggregation of goods and commodities to achieve
critical mass; this provides economies of scale to reduce freight costs and improve supply chain performance.
The Central West Line, including its track and bridge infrastructure that connects Emerald, Alpha and Winton
has a nominal strength rated below “A Class” track as 15.75 tonnes axle load (tal) and 80 km/h. Information
obtained from level crossing line-side observations and from other records have been sufficient to confirm that
the line’s strength capacities west of Nogoa are only marginally acceptable for the existing nominal 15.75 tal
loading and if subject to increased frequency of trains would need attention to any backlog of maintenance.
The classification of the infrastructure as 15.75 tonnes axle-load means that an inland port situated west of
Nogoa River (Emerald) would mean that all trains from the inland port to the North Coast Line (NCL) would be
limited to 15.75 tal rolling stock, or the section of track and bridges between Alpha and Nogoa would need to
be upgraded to at least 20 tal. Trains to and from the west of the inland port could continue to be operated
using 15.75 tal train loadings until increases of traffic merit upgrading of track and structures.
Growth of the rail freight market can be accomplished by offering frequent train services. However, the
existing route to the NCL should (over the longer term) be converted progressively to double track as follows:
»» The 6.5 km and 9.5 km lengths either side of Gracemere. This to include NCL junction designs for
Rockhampton destination and for southern and Gladstone destinations
»» The 26 km section connecting Dingo and Bluff which will result in almost 200 km of double track route
operations covering a high proportion of the coal mine traffic
»» Finally the remaining 5.5 km to Tolmies; 20 km to Comet; and 18 km to Yamala (Emerald East) in a
progression in advance of growing traffic from the inland port
31
Road Freight Services
From a road freight perspective, an inland port offers the potential of improved productivity, safety and driver
fatigue management with a reduction in the number and distance of road freight movements by using a rail
hub distribution platform. This represents a balanced approach to safety and level of service for local road
users, the drive tourism market and the likely increase in the number and size of escorted Over Size Over
Mass cargo movements that will originate from South East Queensland during the ramp-up to new mining
operations in the Galilee Basin.
Shorter local pick-up and delivery legs may promote the utilisation of higher productivity truck fleets based
on Performance Based Standards (PBS), offering improved working conditions for truck drivers servicing the
resource and agricultural sectors. A containerised freight model that moves mining inputs and agricultural
exports by rail to an inland port could assist the road transport industry to standardise its truck fleet, manage
operational costs and improve truck cycle times based on a 24/7 operation from an inland port.
Qualifications and Supply Chain Relationships
The definition of the freight market work is primarily based on the introduction of an inland port freight hub,
near Emerald (Yamala), given its broader catchment area for a range of agricultural exports and general
cargo imports.
The inland port would be primarily served by rail from a line haul perspective and by road for local and
regional pick-up and delivery legs. Rail’s contestability with freight movements in the study area is generally
based on the existing conventional railway, which needs to innovate and evolve in order to remain relevant as
a key component of a multi-modal freight system.
An inland port offers the opportunity to organise and consolidate whole train loads more readily and therefore
make rail more attractive with increased frequency. Subject to commercial considerations, the use of rail
shuttles or cargo sprinter style services may support increased services with lower access costs. However
the ability of these types of services depends on commercial reality and the capacity of the network beyond
the boundaries of this study. The North Coast Line (NCL) in particular is constrained in the single line track
paradigm with multiple capacity pinch-points.
Contestability
Traditionally rail dominates market share in high-volume low-value commodities. Based on very high point
to point volumes it offers economies of scale not matched by road transport. Conversely road transport
dominates particular market segments and commodities in which it has a comparative or absolute advantage.
There are major difficulties in determining the market share for many products which are not as clearly
aligned to either mode (road or rail) and which are at least to some extent, subject to competition between
the modes.
Commodity movements based around time sensitivities, very short haul and unconsolidated loads place rail at
a competitive disadvantage when compared to road transport.
Rail freight provides competitive tension in markets where there is no backload available e.g. petroleum
product and export grain. Road freight can offset rail freight’s single direction cost efficiency by spreading its
revenue and costs over two legs rather than one and is not as reliant on load consolidation and duration for
this to occur.
To an extent this explains road and rail’s relative market share and how an inland port model provides the
opportunity to organise and consolidate whole train loads more readily.
There are currently three service providers in the rail freight rolling stock/track arena with differing charges for
track use and differing tare based on the age and supporting infrastructure (bridges) of the track.
32
»» There was comment that there was a change down needed for cattle and containerised agriculture
travelling to the abattoirs in Rockhampton and Biloela and to the Gladstone Ports. It may be an option
to upgrade the road from Biloela to Gladstone Port as a road train route directly via the Calliope cross
roads intersection.
»» The project also needs to understand the engineering, road safety and costs around bringing trucks from
the Central West directly to the existing abattoirs in Rockhampton.
»» Ageing water infrastructure and poor water efficiency in irrigation schemes were identified as problems
»» There were a number of nominated specific road upgrades needed to achieve B-double standard as well as
a number of roads identified as needing sealing – such as the Fitzroy Development Road.
4.3 Proposed Fitzroy River Agricultural Corridor Infrastructure
»» Railway through Rockhampton has its limitations on the length of the trains which impacts on rail viability
for Eastern Seaboard
»» No significant general and cold freight storage capacity at Rockhampton Regional Airport
»» Road infrastructure required around proposed new water infrastructure
»» Some water users in the lower region of the Fitzroy River have complained about the quality of the water
in relation to its suitability for irrigation. Extensive testing by both the Department of Natural Resources and
Mines (DNRM) and independent testing by the Fitzroy Partnership for River Health have verified the safety
of the water for irrigation and human consumption.
»» Cattle truck access restriction through Rockhampton to abattoirs
4.4 Proposed Dawson River Agricultural Corridor Infrastructure
»» Currently Sheepstation Bridge on the 120km of the Dawson Highway between Biloela and Calliope cannot
safely accommodate B-Double road trains.
»» Road freight currently travels north from Biloela to Westwood and east to Rockhampton; trucks are
disassembled at Gracemere into B-doubles and continue on the Bruce Highway south to Gladstone. This is
more than double the distance and this increases the number of trucks on the Bruce Highway.
»» The two bridges of Oxtrack Creek and Boam Creek on the Eidsvold and Cracow Road
»» Specific road upgrades needed for road train capacity from origin to export hub
»» Improved coordination of road/rail/storage linkages required
»» Existing rail freight direct to Gladstone has shifted to road transport
»» Product from the wheat silos in Biloela and Moura could be transported by rail
»» Product from abattoir in Biloela could be exported directly from Gladstone Port
»» Pulse and horticultural seeds could reutilise rail transport which has been reduced and withdrawn
33
5. Stakeholder Consultation
The following regional consultation process gives a description of some of the main stakeholders of agriculture
in Central Queensland. Through this whole-of-region context, The Growing Central Queensland project is able
to highlight the key issues that the region faces, as well as to identify the emerging regional opportunities and
circumnavigate any potential pitfalls.
5.1 Infrastructure providers
Department of Transport and Main Roads
Contact: Manager (Project Planning and Corridor Management) Fitzroy District Central Queensland
Program Delivery and Operations
An introductory discussion with DTMR was conducted. It appears the Department is focused on programs
related to road safety with limited capacity to address emergent priorities such as those that form part of
Growing Central Queensland. There was a discussion around the proposed rail and road bypass corridor for
Rockhampton with an estimated cost of $1.6 billion dollars to bypass Rockhampton’s rail network.
Ergon
Regional Asset Manager
Ergon assisted in explaining pricing structures, problems around peak loading and there was a general
discussion around what impacts there might be on the provision of power if the company was subject to asset
leases in 2015. Ergon was of the mind that “user pays” in terms of new infrastructure. If three phase power
was required to a shire then the developer paid for the infrastructure and received a more favourable tariff in
consideration; or Ergon built the infrastructure and charged full tariff.
The learning in terms of agricultural investment was that when the retail sector bills for power, a direct
payment is made to the power station, the grid infrastructure provider (Powerlink) and the poles and lines
provider (Ergon), with the competition aspect around the retail space. This direct line of sight concept could be
useful for example in the beef industry when a breeder receives a payment based on the quality of beef sold
down the value chain to retail. Premiums could be applied depending on the grading of the product.
Aurizon
Transportation/Trucking/Railroad Manager Human Resources at Aurizon Townsville, Australia
Aurizon owns the track from Emerald to RG Tanna Coal Terminal in Gladstone Harbour. Aurizon owns
significant volumes of rolling stock in the coal industry and has primary contracts to move coal to export ports.
Aurizon competes in the freight arena with Pacific National. Queensland Rail owns the track to the west of
Emerald and the eastern seaboard track.
Aurizon operates under a hub and spoke business model with careful consideration of the economics around
the logistics of road and rail on a time versus distance costing. When it is cheaper to move trucks they
move product to a depot where it becomes more cost effective for rail. Aurizon is open to negotiation on
infrastructure provision provided it meets a cost benefit analysis on building as well as volume and long
term contracts.
Aurizon has identified Rockhampton as a bottleneck on the north-south line due to the limitations around the
length of trains that can travel through the city. Trains longer than one kilometre, have the potential to block
access on all three bridges over the Fitzroy River should they stop moving in that location. The result is blocked
access north-south by both rail and road. All freight travelling north has to be shunted into smaller lengths
prior to travelling through Rockhampton and further north.
34
When it was discussed that there was a proposed city bypass for the rail network, it was quickly identified that
while QR owns the track, Aurizon owns the large freight, workshop and logistics centre in Rockhampton and it
was not in their best interests to relocate.
Pacific National
Manager Business Strategy Central Queensland
‘Commercial in Confidence’
Gladstone Ports Corporation Ltd
CEO, Business Development Manager, Business Operations Manager
The Gladstone Ports Corporation controls the Port of Gladstone, the Port of Bundaberg, the Port of
Rockhampton (Port Alma) and the Gladstone Marina. The Ports Corporation emphasised that it is open for
business and that it works closely with Patrick’s Stevedoring to enable the flow of freight and commodities
from the Ports and marina.
It was noted as an opportunity by the Ports Corporation that 35% of ocean freight in Queensland travels
past the Port of Gladstone and is unloaded in Brisbane. The freight is then transported back up the coast by
road and rail networks to Central Queensland. There was a market failure in understanding that the Port of
Gladstone handled more than coal.
There was some discussion around the opportunity of linking the southern road access and the port access
road stages 2 and 3 for road trains to the Port from Biloela in the west via Calliope.
The Ports Corporation also talked about the opportunity for coordination of freight. The example that they used
detailed that they often had requests for 10-20 containers of agricultural product ready for transport. The Ports
Corporation noted that there needed to be 100+ containers ready for a ship to pull in. It was discussed that if
there was cold storage capacity on or near the Port, containers could be held successfully without shrinkage
until quantities justified a ship pulling in. There was also general discussion around the logistics of returning
empty containers to the port.
Fisherman’s Landing was identified as a suitable port for live export, however was relatively undeveloped.
Auckland Point (Port Central berths 1-4) was identified as the primary heavy lift port for containerised
agricultural product.
Rockhampton Regional Airport
Airport Director, Manager Economic Development
The Rockhampton Regional Airport is owned and operated by the Rockhampton Regional Council. The airport
is predominantly commuter based with little or no agricultural product moved through privately run freight
services. Apart from military services, there is no warehousing or containerised capacity at the airport. All
proposed airfreight from Rockhampton is trucked to North Rockhampton, broken down into smaller sections,
trucked back across town and loaded into the hold of domestic commuter airlines. The Airport has the capacity
to land the biggest aircraft in the world and the Australian, American and Singapore Army regularly utilise
Antonov freight carriers to move large machinery and equipment.
There is an opportunity to develop airport and aircraft warehousing facilities to accommodate the expansion of
the airfreight market as it relates to agriculture. The Rockhampton Regional Council has identified a need for a
levee bank to be built around the airport to address the issue of flooding.
35
5.2 Industry Groups
Gladstone Industry Leadership Group
CEO
The Gladstone Industry leadership Group (GILG) identified security around power pricing as the biggest
impediment to growth.
Agforce
The perception of a lack of relevancy is due to declining prices and extended drought and a general feeling of
despondency in the industry. It was further described that there are many producers who are burdened with
high levels of debt and no way to fund succession planning for their businesses.
Queensland Farmers Federation
CEO
Queensland Farmers Federation highlighted the inefficiencies of water usage and used the examples of
irrigation schemes. The comment was that rather than having new water infrastructure and new water
allocations, instead the focus needed to be on whether the existing infrastructure and pricing were viable.
The specific example used was the Theodore pumping station for the Theodore irrigation scheme. Currently
the scheme is at 40% capacity due to the cost of running old power intensive infrastructure. Queensland
Farmers Federation also commented on the leakage in irrigation systems and used the Burdekin as an
example of inefficient irrigation and resultant rising water tables.
Growing Central Queensland subsequently received a submission from the Theodore and Emerald Local
Management Arrangements which has been used as a case study in this review document.
Queensland Cotton
Regional Manager Central Queensland
Queensland Cotton described that approximately 1.5 bales of cotton are produced from 1ML water. So, for every
increase of water more cotton would be planted and produced depending on the price (of land and water) and
land availability (assuming it is used to grow cotton) anywhere along the Dawson, Mackenzie, Nogoa or Comet
rivers.
There was comment around infrastructure: no new cotton gins are needed as it’s currently an over serviced
sector, however an oil processing plant would increase returns on cotton seed (though this was a relatively
small part of the return to growers). There was also comment that the Theodore pumping station infrastructure
was old and inefficient and was currently being considered under the Local Management Arrangements
discussed previously.
Queensland Cotton identified that good telecommunications are vital for moisture probes, weather stations
and for farmers to run their business. In relation to logistics, currently all cotton bales are road freighted to
Brisbane and containerised and exported from the Port of Brisbane. This is due to the cost of containerisation
at the Port of Gladstone and it also builds a story around volume with links to other products coming in from
the Darling Downs and Western Queensland.
Graincorp
Development Manager Business Improvement
From Graincorp’s perspective, rail infrastructure and the cost of entry to the network for new infrastructure
were the primary problems.
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5.3 Research and Education
Meat and Livestock Australia
Meat and Livestock Australia Limited delivers marketing and research and development services for Australia’s
cattle, sheep and goat producers. Meat and Livestock Australia creates opportunities for livestock supply chains
from their combined investments to build demand and productivity.
Most of Meat and Livestock Australia’s funding comes from transaction levies placed on the sale of livestock,
with the Australian Government providing matched funding for levy investment in most research and
development. Meat and Livestock Australia provides services, tools and information that create tangible
benefits for livestock producers that flow back to the farm gate.
CSIRO
Northern Australia Food & Fibre Chains Study SYNTHESIS REPORT Andrew Ash (CSIRO) and Trish Gleeson
(ABARES) August 2014 (Appendix A).
CQUniversity
CQUniversity Australia has positioned itself as a leader in the delivery of agriculture-related undergraduate and
postgraduate programs, and industry-based research. CQUniversity is one of only four Australian universities
to achieve the Commonwealth’s highest research ranking (Level 5: well above world standard) in the 2012
Excellence in Research Australia (ERA) exercise, in the area of Agriculture.
CQUniversity was also the only Australian university to achieve the same ranking in the field of Agriculture
and Farm Management. CQUniversity’s specific strengths are in beef cattle production, genetics, agricultural
management, resource economics, horticulture, food production, and plant and water science.
Backed by a world class research agenda, CQUniversity is also a leader in the delivery of industry-specific
education and training that aims to equip tomorrow’s industry leaders with the knowledge and skills needed
to continuously improve industry practices and ensure agriculture continues to be a strong and vibrant
national industry.
Adding to this capacity CQUniversity has also formed close partnerships with organisations including AgForce,
Horticulture Australia Limited and the Department of Agriculture and Fisheries, Queensland. These partnerships
ensure CQUniversity is working hand-in-hand with industry on projects that are both innovative and relevant.
growNORTH
Dr Mike Guerin
The growNORTH Collaborative Research and Development program is being proposed to deliver high impact
research that will lower investment barriers and enable significant capital to flow to development in the north.
The key tenets of the program include:
»» A nation building project within the north and looking north
»» Technological innovation for profitable value chains into Asia
»» Socially and environmentally sustainable development
»» Strong ongoing and broad regional and aboriginal community ownership, engagement and benefit
»» Transformational and inclusive
Agriculture (including aquaculture) would play a strategically important part in an emerging but broader
transformation and development of the north. That transformation and development of northern Australia
could diversify and balance regional economies by attracting private investment, developing trade with
domestic and overseas markets.
37
It would also sustainably draw on natural resources, creating demand for infrastructure development, working
with and creating business opportunities, improving the liveability of local communities and creating demand
for new skills. Not only does strong and diverse economic development across northern Australia broaden
gross domestic product, it helps in mitigating economic cycles that could otherwise be much more extreme.
growNORTH offers a long term collaborative commitment enabling many of the seemingly intractable issues
about northern Australia development to be addressed. Rigorous early analysis would identify priority precincts
for agricultural and other development where pull from international and domestic market demand, supply
chains and logistics aligned with access to productive land, water and other resources.
growNORTH would design and test business models tailored to northern Australia which would reduce
investment risk and attract capital flows. Technological innovation would be a focus, drawing on innovation to
“change the game” and “economics” of northern development.
5.4 Environment and Conservation
Fitzroy Basin Association
CEO
The Fitzroy Basin Association identified three primary areas of concern regarding any new proposed water
infrastructure or agricultural intensification.
The first point was around water quality and mining discharge in peak flow events. In addition there was
some concern on the impact or water from the polluted Dee River entering the system as a result of water
“backing up” behind a dam or weir.
The second point raised was potential perverse effects from change or intensification of agriculture. The
example used was the introduction of sugar cane as a crop and the potential adverse effects of chemical run
off into the Great Barrier Reef.
The final concern was the construction of water infrastructure primarily for use by extractive industries would
not benefit the agricultural industry.
Capricorn Conservation Council
Executive Officer
The three main point of Capricorn Conservation Council’s concerns about proposed dams and weirs in the
Fitzroy Basin were:
»» Further loss of ecological connectivity (depleted biodiversity, barriers to fish migration, loss of riparian
vegetation corridor) and depletion of habitat, e.g. for Vulnerable Fitzroy River Turtle (Rheodytes leucops).
»» Creation of river bank dead zones in dam ‘tidal zone’ could result in noxious weeds (e.g. castor oil plant,
Noogoorar Burr, Parthenium). Biodiversity offsets were not feasible as floodplain soils plus altered water
tables were not capable of supporting normal community of flora and fauna adapted to riparian corridor,
e.g., Blue Gum, Coolibah, Blackbox and Casuarina communities.
»» Lastly decline in water quality, ultimately impacting on the Great Barrier Reef – the southern zone of which
is already in steep decline (Outlook 2014) (already ‘C’ Grade) due to reduced flows, deep storage ponds
inclined to colder increasingly anoxic water column more favourable to toxic cyano-bacteria blooms and
anaerobic bacteria in bottom sludge.
Capricorn Conservation Council supported efforts to adopt water use efficiency measures including options for
flood to fit the natural variability of the Fitzroy system’s flows and limitations of soil health. Large pondages
with limited riparian vegetation would have high rates of evaporation reducing water quality for human use
and environmental purposes.
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5.5 Regional Economic Development
Capricorn Enterprise
Economic Development Officer
Capricorn Enterprise is one of Queensland’s fourteen membership based Regional Tourism Organisations and is
recognised as the economic development organisation for the Capricorn region within Central Queensland.
Capricorn Enterprise is responsible for strategically marketing the Capricorn region to domestic and
international consumers, trade, media and business, and for supporting and developing industry projects,
attracting large scale investment and driving the region’s economy forward.
Capricorn Enterprise has a membership base of approximately 400 members coming from a wide range of
sectors including accommodation, attraction and tour operators, retail and service providers, mining and
industry groups, real estate agents, media, web and graphic design and many more.
These businesses have a common tie – they are committed to the development of tourism and the region’s
economy within Capricorn and work closely with Capricorn Enterprise to make that happen.
After discussions with the Capricorn Enterprise Board, the Association has now listed the Fitzroy River
Agricultural Corridor as one of their seven priority projects for their region.
Central Highland Regional Development
Executive Officer
Central Highlands Development Corporation is a not-for-profit organisation who is the lead economic and
tourism development agency for the Central Highlands region of Queensland, which includes the communities
of Arcadia Valley, Bauhinia, Blackwater, Bluff, Capella, Comet, Dingo, Duaringa, Emerald, Rolleston, Sapphire
Gemfields, Springsure and Tieri.
Central Highlands Development Corporation facilitates a wide range of projects and initiatives across the
region and is proactive in providing relevant advice, statistical information, workshops and networks to support
business, industry, government and community.
As an organisation, Central Highlands Development Corporation is dedicated to:
»» Advocating for sustainable regional and economic growth
»» Proactively marketing and promoting the Central Highlands as a ‘region of choice’
»» Enhancing workforce development
»» Supporting business development, innovation and capacity
»» Supporting community organisations to develop skills and knowledge
Rural Property Agents
Rural property agents have been supportive of the Growing Central Queensland concept from its earliest
stages. Many agents have experience and understanding of the industry development issues around
investment in agriculture and readily embrace the potential opportunity for aspects of the project to evolve
into a “one stop shop” to promote regional investment in agriculture in Central Queensland.
Banking Sector
The banking sector commented that the earnings before interest and tax for agricultural industries was
inconsistent. There was also comment that banks in general continue to assess the wrong information when
considering agricultural clients. They believe that instead of focussing on the debt to equity ratio of a business,
there should instead be more considered thought in understanding their business productivity ratio.
39
It was noted that Rockhampton and the surrounding regions had the strength of a mixed and diversified
economy that was better placed to cope with the down turn in mining construction projects and associated
economic downturn. It was also noted that Queensland had a relative advantage now in industries placed
to be the next wave of investment both domestically and internationally (agriculture, gas, tourism, wealth
management and education). Queensland had higher debt ratios than other states but was strategically placed
to capitalise on its relative advantages in the coming term.
Trade Investment Queensland
Priority Sectors and Client Services Division
Business Manager Strategic Investments
Trade Investment Queensland worked with partner agencies, industry organisations and international allies to
promote better access to overseas markets and decision makers for Queensland companies.
If you were an exporter, they would work closely with you to develop required skills, provide you with market
intelligence and business connections, and offer in-market introductions through targeted trade missions.
Trade Investment Queensland does not have the capacity to develop projects from the ground up to
investment ready in the agricultural arena.
5.6Landowners
The Growing Central Queensland review process has consulted with landowners both individually and in
workshop and general meeting contexts. Messages from agricultural producers were consistent:
»» Remove over-regulation of agricultural industries, red and green tape
»» Increase returns to farm gate
»» A profitable industry is a vibrant industry which results in greater spread of wealth and prosperity
»» More young people returning to agriculture as a viable career
»» More people studying in the field of agriculture
»» More interested and powerful lobby groups in agriculture
»» Capturing the needs of the next generation
»» Government should invest in ‘nation-building” infrastructure
»» Maintain water quality for agricultural use in river systems
»» The need to understand investment options to enable generational change and debt restructuring
5.7 Indigenous Groups
Fitzroy Basin Elders
Annual General Meeting
The Fitzroy Basin Elders noted that there were different opportunities around agricultural production as a
business, versus land ownership for agricultural production as an investment. This concept took Growing
Central Queensland down the path of examining the opportunities of leveraging a native title claim on
unallocated State land for an opportunity to develop the land under a joint venture with traditional owners.
The other learning from the discussion with the Elders was the concept of spiritual trauma as a quantifiable
economic cost to their communities. This concept can be directly related to the breakdown of the social fabric
of rural communities during extended drought and bank foreclosures.
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5.8 Agricultural Investment Firms
BDO
Partner Advisory Corporate Finance
Executive Director Advisory International Services
BDO works with clients across all parts of the food and agribusiness value chain which includes producers and
processors. BDO provides advice and focuses on solutions that include:
»» Exploring market entry and expansion opportunities
»» Seeking investment opportunities and finance
»» Evaluating debt and equity levels
»» Reviewing the economic viability of a business or project
»» Considering succession and ownership transition options
»» Identifying government grants and concessions
»» Understanding the Government’s climate change initiatives
»» Identifying areas for performance improvement
»» Responding to the tax reform agenda
»» Complying with reporting and regulatory obligations
Discussions with BDO looked extensively at the issues identified by investors as being problematic in the
Queensland agricultural industry. The main issue identified was the lack of consistency, transparency or
comparison between the earnings before interest and tax (EBIT) of similar businesses within an industry.
It was noted that the beef industry was particularly difficult in this regard.
Deloitte
National Industry Leader Agribusiness
The discussion with Deloittes focussed on building on the region’s natural and built competitive advantages
and promoting five specific advantages (not thematic) in any potential prospectus of the region. Deloittes
noted that the Central Queensland area was well placed with its ports to accommodate the growing South
East Asian market.
There was general comment that it was not the role of business to fund “greenfield” projects such as dams,
rather the business case was around on-selling these assets after their profitability had been proven up.
Duxton Asset Management
Associate
Duxton builds large agricultural operations in an otherwise fragmented market. This provides opportunities for
consolidation and operational improvement.
After due diligence by its financial and agricultural teams, Duxton acquires farms such as broadacre and dairy
farms, orchards and tea estates with the scope to lift enterprise value by increasing operational efficiency
through best practice farming techniques, horizontal and vertical integration and balance sheet restructuring.
Duxton’s farmland assets are deliberately located around the world to diversify and reduce agricultural risks,
such as weather and pests and grow a diversified range of soft commodities (crops) to reduce price risk.
Duxton offers investors exposure to physical agricultural assets providing:
»» An investment in real assets with considerable upside potential
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»» A natural hedge against inflation due to adjusting soft commodity prices and land valuations
»» Low correlation with traditional asset classes
»» The potential to benefit from systemic shifts in food and agriculture
Duxton’s investments are generally unleveraged and are deployed in:
»» Countries where clear title to land or long-term leases can be obtained
»» Countries with a functioning judiciary and a clear rule of law
»» Countries that do not subsidise agriculture
»» Areas that are climatically suitable for agriculture long term
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6. Agricultural Industry Structure
Central Queensland has the opportunity of rapid increases in global demand meeting domestic comparative
advantage. Given this opportunity, what could a cohesive approach by landowners, industries, government and
associated stakeholders under Growing Central Queensland do to promote reinvestment in agriculture.
»» Identify the impediments in infrastructure to the development of agriculture
»» Identify additional infrastructure that could leverage further agriculture investment
»» Understand the opportunities around Australia and Central Queensland’s competitive advantage
in agriculture
»» Understand the industry structural change needed to support agriculture
»» Start to understand the investment models to address these issues.
The Agricultural Competitiveness Green Paper released by the Australian Government in October 2014 outlines
nine agricultural policy principles summarised below:
1. Increase returns to farm gate
2. Keep families as the cornerstone of farming
3. Build infrastructure of the 21st century
4. Create agricultural employment through supply chain opportunities
5. Reduce unnecessary regulation
6. Promotes access to key export markets
7. Focus on Australia’s competitive advantage
8. Support strong and vibrant regional communities
9. Maintain access for all Australians to high-quality affordable fresh food.
While some of the policy principles are thematic in their approach, all are consistent with feedback from
landholders and other primary stakeholders in the consultation process to understand what infrastructure and
investment is needed to position Central Queensland for the megatrend that is agriculture.
There is a need to think laterally and invest in new areas of business to implement policies and technologies
that positions Central Queensland as world leaders in agriculture. A vibrant and prosperous agricultural industry
will attract the best and brightest to Central Queensland. If we implement the strategic policy principles the
thematic concepts of “support strong and vibrant regional communities” and “maintain access for all Australians
to high-quality affordable fresh food”, agriculture production will increase across the region.
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6.1 Setting the Scene for Central Queensland
Australia needs to set a coherent and long-term policy vision and to implement this consistently over time.
The Agricultural Competitiveness Green Paper and Pivot North Inquiry into the Development of Northern
Australia initiative set the framework for Growing Central Queensland.
Growing Central Queensland has also been developed in consultation with investment groups that take a
long‑term view and have the capacity to support plans over the decades.
Deloittes has Australian agriculture as one of “The fantastic five” of agribusiness, gas, tourism, international
education and wealth management as it is currently positioned at the intersection of global opportunity and
national advantage.
Australia has world class resources in land minerals and energy. We use English as our national language
- the world’s business language; with a lowering dollar and a well understood tax and regulatory regime.
Australia’s political system is relatively stable. Our climate is temperate, we are able to supply fresh product in
an innovative commodity market which is well regulated around food safety. All of these advantages create a
climate of sovereign security for investors.
In addition to the framework of National advantage, Central Queensland has significant water resources in the
Fitzroy Basin and as a result of the associated Resource Operations Plan, security of water and water pricing.
The key centres for provision of agricultural and service facilities are Rockhampton, Emerald, Yeppoon,
Gladstone, Moranbah and Biloela. Rockhampton is the largest urban centre, with 51 per cent of the region’s
population in 2011, and provides support for agricultural industries and service-based industries such as retail,
health, education and transport.
Central Queensland is an important agricultural production area dominated by beef cattle production, while
also supporting rain-fed and irrigated cropping, horticulture and forestry. A significant cotton crop is produced
in the Dawson Valley and Emerald areas. The region has a strong meat processing capability through three
major meatworks near Rockhampton and Biloela, and supports the cotton sector with three cotton gins
undertaking primary processing near Emerald and Moura.
The value of agricultural production in the Fitzroy Region (SA4) was $1,008.1 million in 2012–13. The major
agricultural commodities in the Fitzroy Region were livestock (slaughtering and products) valued at $678.1
million and cropping at $330.1 million. (1)
Results from the most recent census show Central Queensland competitiveness in agriculture, in relation to
other regions of Queensland.
Cairns
Region
Fitzroy
Region
% Qld
Total area of farms (ha)
Total number of
agriculture business
Mackay
Region
% Qld
Townsville
Region
% Qld
QLD
% Qld
TOTAL
731,612
0.6
11,569,339
8.9
4,456,413
3.4
4,749,366
3.7
129,548,237
1,894
7.1
3,156
11.8
1,899
7.1
1,508
5.7
26,648
(1) Australian Bureau of Statistics: Agricultural Survey (Value of Commodities Produced, Australia) 2012/2013.
The Queensland Agricultural Land Audit identifies significant areas in Central Queensland of important
agricultural land based on biophysical potential for intensive agriculture. The region is predominantly
freehold land.
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Central Queensland is experienced in utilising infrastructure to leverage agricultural growth. There is also an
argument for looking at where we have been successful in the past. There is a history of government policy
and “nation building” infrastructure generating waves of agricultural investment. The construction of the
Fairbairn Dam and associated irrigation schemes has been fundamental in increasing intensive agricultural
production from the region.
There is a solid base of experienced agricultural business operators with capacity to expand production with
new water availability. Central Queensland has an existing network of towns and communities to supply the
social support and experienced labour force needed to complement expanded agricultural production.
Industry capacity is supported through CQUniversity with specific strengths in beef cattle production, genetics,
agricultural management, resource economics, horticulture, food production, and plant and water science.
Adding to this capacity, CQUniversity has also formed close partnerships with organisations including AGFORCE,
Horticulture Australia Limited and the Department of Agriculture and Fisheries, Queensland.
Central Queensland has proximity to some of the world’s fastest growing markets through port and airport
access. The Port of Gladstone, through the Gladstone Ports Corporation is working to deliver Central
Queensland’s wealth to the world. Ideally situated within a natural deep-water harbour, the Port of Gladstone,
along with its northern counterpart, Port Alma Shipping Terminal, plays a pivotal role in delivering the
region’s natural resources and finished products to customers worldwide. Gladstone Ports Corporation is
committed to growth, prosperity and the community, carrying out its operations in an effective, efficient and
environmentally responsible manner.
Rockhampton Regional Airport is a major Australian regional airport that services the City of Rockhampton and
Central Queensland, with flights to Brisbane, Gladstone, Mackay, Townsville and Cairns. The Airport is used by
both domestic and international airlines using a mix of aircraft including wide-bodied aircraft such as the B747
to B777 and A340 types. The Airport has approximately 750,000 passengers passing throughout the terminal
every year.
In addition to collaborating across government and business and maximising the participation of landholders
and Indigenous groups, Growing Central Queensland should also use its current strength and future potential
to lure the best agribusiness talent to the region.
6.2 Structural Issues
There are some challenges around agribusiness in Central Queensland.
Age
Our farmers are old, and getting older, with the average age of Australian farmers at 52, 12 years above the
national average for other occupations. Farmers are five times more likely than the average person to still be
working over the age of 65.
The retirement of many farmers in the coming decade will mean Central Queensland’s relatively high
dependence on ‘family farms’ will come under increasing pressure.
Business Structure
Most Central Queensland farms are family owned, with the large majority of broad-acre and beef properties
operated by owner-managers.(2) Statistics show larger farms make more money than their smaller
counterparts. The largest 10% of Australian farm businesses produce over 50% of output, while the smallest
50% account for just one-tenth of output.(3)
So the retirement of many Australian farmers will not just produce skill shortages on a huge scale, it will
require many businesses to change hands. It has been estimated there will be a need for up to $400 billion to
fund these ownership transitions. A further $600 billion may be needed by 2050 to improve the productivity of
Australian farms.(4)
(2) Australian Bureau of Statistics: (Living Arrangements: Farming Families) Australian Social Trends 2003.
(3) Australian Government Productivity Commission: Trends in Australian Agriculture: Productivity Commission Research Paper. 2005
(4) ANZ Insight: Greener Pastures: The Global Soft Community Opportunity by Australia and New Zealand, Issue 3 October 2012
45
Beef Industry Model
An attempt to visually represent the value chain relationships in the beef industry emphasises the complexity
of the current beef business model. There are very few operators that own the value chain from conception
through to the butchers shop. This is in stark contrast to the Tropical Pines business model (see section 6.3).
Diagram 2
Feedlot
Importer
Food Service Industry
Breeding Property
Importer
Exporter
Feedlot
Electronic
Selling
(paddock)
Broker
Abbatoir
Wholesaler
Wholesaler
Importer
Food Service
Butcher Shops
Saleyards
Fattening
Property
Supermarkets
Importer
Butcher Shops
Supermarkets
Domestic Consumers
Stud Stock producer
Broker
Backgrounding
property
Feedlot
Farmer
Export Consumers
Live Animal
Exporter
Agribusiness Employment
The number of students studying for agricultural qualifications has virtually halved in the past decade, as
mining and other careers have offered better prospects. This means there are now vastly more agribusiness
jobs than qualified graduates.
Roads to Nowhere
It is fortunate that Central Queensland is close to a burgeoning Asian market, but within the region some
of our produce travels from farm to port and Central Queensland to Brisbane on relatively inefficient
roads, instead of by rail. Improving our transport mix and other infrastructure would greatly improve
our competitiveness.
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6.3 Business Structure Case Study
Tropical Pines
Tropical Pines Pty Ltd is a private company based in Yeppoon, which provides packing, distribution, agronomy
advice and sales and marketing services to 22 pineapple growers in Queensland. The company manages
two packing sheds, one in Yeppoon and one at Beerwah. The company has grown to a point where it now
markets approximately 50% of all fresh pineapples sold in Australia.
The company is predominantly owned by pineapple growers. The board of directors is comprised of directors
with a diverse skill set, including a number of pineapple farmers.
The main objective of the company is to improve grower or farm-gate returns. This means it operates in a
similar fashion to a cooperative but has a corporate structure. The company maintains this aim and clarity
of purpose because the owners and management team recognise that if the growers are not successful
then the company can not be successful. The company supplies directly to about 42 different customers all
over Australia and has a policy of supplying 40% direct to retailers, 20% to fresh cut processors and 40% to
wholesale market agents in each capital city. The policy also limits exposure to any one customer to 20%.
System
The system the company uses is that it packs and markets fruit on behalf of 22 growers to achieve the best
possible return for growers. This involves sorting fruit to provide each customer with the product they are
seeking, using various packing options to suit customer requirements, providing quality assurance assessments
that comply with both Coles and Woolworths quality assurance systems and arranging transport of fruit to
customers throughout Australia from multiple packing facilities in Queensland.
The company collects the revenue from the sale of fruit and then distributes the revenue back to growers
using a pooling system. The company is responsible for collection of revenue from customers and protects
growers from bad debts. The company has a policy of making pool payments to growers 4 weeks after fruit
is supplied, regardless of when customers pay the company. The revenue from fruit sales is pooled weekly
by fruit size, quality and variety. There are separate pools for each size, each variety and separated by
quality. Each pool provides an average price, which is used to pay growers. The average price for each pool is
multiplied by the volume of fruit each grower supplied to each pool to calculate the return for each grower for
the week. The company provides a registered company tax invoice and packout report to each grower on a
weekly basis, which shows how their payment has been calculated.
Advantages
The advantages of 22 growers from different regions supplying to the company are as follows:
»» The company can maintain supply directly to major retailers such as Woolworths and Coles and be able to
comply with the quality assurance standards imposed by those retailers.
»» The company is able to negotiate effectively with all customers on behalf of growers. This is particularly
important when negotiating with large retailers such as Woolworths and Coles.
»» The company can negotiate better price and service from suppliers such as packaging companies and
transport companies.
»» The company is able to better manage supply to meet demand throughout the year.
»» The company can afford to engage a leading agronomist to help all growers.
»» The company can attract key personnel with the skill to deliver improved farm-gate returns and allow
growers to focus on farming.
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»» The company has developed financial reporting for growers that shows the return by pineapple, by size
and variety for any period of time requested. A quarterly report containing this information is provided as
a matter of course to each grower.
»» The company can analyse the returns from all customers by size and variety of pineapple to better manage
returns from customers.
»» The company can invest in technology and innovation to improve grower returns.
»» The company has the ability to focus on customers every day to ensure it provides the best possible
service, keeps customers informed, builds and maintains customer relationships and develops new
customers and markets.
»» The company is in a position to build demand for pineapples across Australia by working with new and
existing customers and by engaging in promotional and awareness activity with consumers.
»» The company has developed a leading website, which is used to connect directly with consumers.
»» The company has greater access to funding, both debt and equity funding. This enables the company
to invest in packing facilities or new business opportunities on behalf of the grower group. Those
investments will only be made when they add further value to farm-gate returns.
»» The company ensures growers are paid four weeks after fruit is supplied, regardless of when customers
pay the company for fruit supplied.
»» The company provides some protection against bad debts.
»» The company has the ability to tackle industry issues such as biosecurity matters or chemical
registration issues.
Results
The result of this cooperative business model is that farm-gate returns for growers have increased by about
40% in the last 5 years. In the last financial year the farm-gate returns for small fruit increased by 25%,
with a 43% increase for very small fruit. This has had a major impact on farm profitability at a time when
weather events caused a significant amount of small fruit to be harvested. The company has helped grow the
consumer demand for pineapples by about 5% per annum. The company has grown its supply by 26% in the
last four years.
Tropical Pineapples Co-operative Approach
Business
structure
Grower Returns
(shareholder)
48
Farm Gate
Returns
6.4 Increase Returns to Farm Gate
Agricultural operators have identified increased returns to farm gate as the main driver for a prosperous
agricultural sector. As demonstrated in Diagram 2, the business models around agricultural production in beef,
are complicated with little or no “line of sight” for individual farmers from product conception to market. Part
of the consultation process included an examination of the cooperative business model used by Tropical Pines,
which contrasts with the beef model.
Tropical Pines is a cooperative model of growers with shares in the company who focus the business model
entirely as a vehicle to directly drive returns to farm gate first, followed by return to the shareholders as
second. The company employs the best possible people they can afford to drive marketing and management.
By working as a group, the company controls 50% of pineapple production in Australia and can leverage
markets accordingly. The co-op also keeps pineapple production in line with forecast demand and is heavily
involved at a supply chain level.
There is a challenge around how to re-structure a greater number of other agricultural producers and
commodities to accommodate this model of business management to meet the identified goal of “return to
farm gate”. Directly linking supply chain returns to the farm gate in a model similar to the power generation
industry would deliver this. Traceability and reward on premium grading of beef should translate to payment
at all segments of the value chain.
6.5 Keep Families as the Cornerstone of Farming
While it is an admirable goal and perhaps a sensible “want” by government agencies in relation to potential
skill shortage in agriculture, the “average family farm” faces significant issues around age of the workforce,
succession planning and debt structuring. As noted earlier there is an estimated “$400 billion needed to fund
these ownership transitions… (and) A further $600 billion may be needed by 2050 to improve the productivity
of Australian farms”.
Growing Central Queensland has identified that a combination of business models and new infrastructure
are needed to fund and accommodate these changes. It is accepted that economic viability is a precondition
for agricultural investments to benefit the local population and that the choice among alternative business
models needs to be grounded on solid economic analysis. There needs to be a focus on the way that different
types of business models share value between business partners. For family farms it may be changing their
structure to one or a combination of:
»» Management and lease contracts
»» Contract farming
»» Tenant farming and share cropping
»» Joint ventures
»» Farmer owned cooperative business
»» Supply chain opportunities
When considering options for alternative business structures and the understanding that the land and
economic opportunity in agriculture are not mutually inclusive, family farms need to ask and understand their
needs in:
»» Ownership: of the business (equity shares), and of key project assets such as land and processing
facilities.
»» Voice: The ability to influence key business decisions, including weight in decision making, arrangements
for review and grievance, and mechanisms for dealing with asymmetries in information access.
»» Risk: including commercial (production supply and market), political and reputational.
»» Reward: the sharing of economic costs and benefits including price setting and finance agreements.
49
Lease and
Management
Contracts
Contract
Farming
Tenant and
Share Cropping
Joint Venture
Cooperative
Supply Chain
Low
Low
Medium
Medium
Medium
Low
Voice
High
Low
High
High
Medium
Medium
Risk
Medium
Low
Medium
High
Low
Medium
High
Medium
Medium
High
Medium
High
Ownership
Opportunity
Understanding what style of investment best suits the family farm in question takes the agricultural
opportunity a substantial way to “Investment Ready”. Both landholders/business owners and potential
investors can use this simple assessment tool to understand the level of ownership, voice, risk and opportunity
that would suit the outcomes they are seeking both personally and professionally.
6.6 Build Infrastructure for the 21st Century
Built infrastructure and strategic investment policy by government in Central Queensland has been
fundamental in generating waves of agricultural investment. The Fairbairn Dam and the Brigalow Settlement
Scheme are good examples. The Fairbairn Dam in particular shows the then Governments approach to nation
building on a greenfields project with the economic return in the longer term far outweighing the initial
investment.
Growing Central Queensland identifies that there are a number of public and private partnerships approaches
that could help fund the building of primary infrastructure and reducing the impediments to transport and
logistics in the region. The construction of new water infrastructure in Central Queensland should be framed in
a long (30-50 years) term investment scenario and focus heavily on the longer term benefits in the value of
agricultural production in $/GL.
6.7 Create Agricultural Employment Through Supply Chain Opportunities
»» Better industry marketing
»» Taxation incentives for value adding industries – processing and manufacturing
»» Avoid perverse outcomes with competing industries ( water quality and reef tourism)
»» Value adding through increased regional processing of primary production
»» Improvements to logistics so locally produced food is more readily available locally
6.8 Reduce Unnecessary Regulation
»» One stop shop for development approvals
»» Australian, State and Local compliance
Investment ready in a traditional development sense is relatively simple and one dimensional. For example
building units or a house comes with a clear set of guidelines involved in achieving a Development Approval.
The earnings before interest and tax on understanding the parameters of your investment will be clear
and concise.
Investment ready in agriculture is complicated. External factors include multiple levels of Government to deal
with as well as extensive transport and logistics concepts and protocols to understand at both a domestic and
international standard. As described in diagram 2, internal industry drivers can also muddy the investment
opportunity. An example used below around a fictitious feedlot proposal describes the complexity.
50
Advertisement: 30, 000 Head Feedlot Proposal
•
Suitable site with water allocation
•
Guaranteed access to cattle supply
•
Contracted feed supply
•
DA approval
•
International Environmental accreditation
•
Indigenous employment providers
•
All weather access to road and rail
•
•
What sits behind this deal?
•
Cattle buyer to source cattle within specs (May be 150
suppliers in this area)
•
Breeder contracts premium linked to higher grade kill
specification
•
Water allocations •
Feeder contracts
•
Contracted access to containerised rolling stock from abattoir
to port
Direct containerisation to port
•
Shipping contracts international
Within 70km of three abattoirs
•
Port access
•
Abattoir killing contracts
•
Environmental approvals
•
Australian, State and Local Government development approval implications
Opportunity: Take or pay contract on 7.8 million tonnes of beef
Who puts it together?
6.9 Promotes Access to Key Export Markets
The Growing Central Queensland project works with Trade Investment Queensland and Federal and State
departments to promote Central Queensland produce to key export markets. The Free Trade Agreements with
South Korea, Japan and China continues to increase export options and opportunities for Central Queensland.
6.10 Focus on Australia’s Competitive Advantage
Australia gets its biggest breaks and wealth creating waves at the intersection of global opportunity and
national advantage. Key drivers of global demand for agriculture are lifting, including population growth in
key markets. Global food demand will rise alongside the world’s population, which is expected to grow by 60
million people a year over the next 20 years.
Income growth in key markets will be much more important still. As incomes rise in emerging economies, so
too does kilojoule intake and, more importantly, a switch to protein takes place. That means a swing to more
intensive land use.
The world is on the cusp of a leap in demand for higher-value food products. Moreover, at the same time that
demand will lift, supply from much of the rest of the world – especially Asia – will be under pressure. Emerging
Asia is on the move, with the process of urbanisation turning high value farms into homes and factories. Many
major producers, including the U.S., also face long-term water shortages in key productive regions.
»» Lower dollar: The pain of currency strength – a key negative in the past decade – is not permanent.
Deloitte Access Economics estimates that the A$ will settle at closer to U.S.80 cents in the longer term.
»» Fresh product: The same factors that have driven higher-income consumers in the developed world
towards fresh produce will do so for the vast numbers of people entering Asia’s middle class. Within two
decades, this group will comprise almost half of the world’s middle-class consumers.
»» Safe Food: As the world’s population and income rises, so too will the premium to secure sources of food
supply. Reliance on Australian produce will be ‘safer’ than many alternatives, in terms of both food quality
and the reliability of supply.
»» Gains from innovation: As a dry continent, Australia has much to gain from any technological
advances that enable farmers to increase yields from poor soils and semi-arid conditions. Indeed, if we
were to do more to focus our scientific research on areas of potential economic gain, this would be an
attractive target.
51
6.11 Support Strong and Vibrant Regional Communities
The Growing Central Queensland review has identified additional water, processing and transport
infrastructure that could leverage increased agriculture investment and productivity. The report allocates
specific impediments in existing transport and logistics systems to four individual agricultural and transport
development corridors; as well as part of a whole of region “production to market’ flow.
Fundamentally, Growing Central Queensland is a cohesive regional approach to promote and develop
competitive advantages in:
»» A large river system and associated water availability
»» Land resources
»» Security of water
»» Freehold land and productive soils
»» Market experience (Fairbairn Dam)
»» CQUniversity and educational institutions
»» People with multi-disciplinary knowledge and skills
»» Port and air proximity to the world’s fastest growing markets
»» Established road, rail, port and air infrastructure
6.12 Maintain Access for All Australians to High-Quality Affordable Fresh Food
Regional Development Australia Fitzroy and Central West understands the opportunity that Australia has in the
international agricultural arena as well as Central Queensland’s competitive advantage in the domestic market.
Regional Development Australia Fitzroy and Central West through facilitating Growing Central Queensland
understands that industry structural change is needed to support agricultural productivity and has identified
the process and investment models needed to address these issues.
Agricultural ‘Investment Ready” propositions are a complicated space that require traction at multiple levels
of government and regulatory authorities while incorporating what will often be many and differing levels of
commitment from landholders. Asking “who is the investor” has resulted in a range of responses that include
the neighbouring landholder through to international investors. All responses are legitimate and provide part
of the mix across differing investment or business models.
The Growing Central Queensland project has found that there is a significant market failure in taking
investment opportunities from the ground up to an “investment ready stage”. The project provides a significant
opportunity to satisfy this aspect in the marketplace under a commercial framework.
6.13 Case Study Investment Ready Cowal Agriculture
The Cowal Agriculture story* is an excellent local example of how a family-owned irrigation enterprise with an
interest in changing its business structure linked up with an investment fund with an interest in widening its
portfolio to include agriculture.
The Millar family has been involved with the cotton and irrigated agriculture industry within the Emerald
Irrigation Area (EIA) for 25 years and in that time expanded their business to create scale and operational
efficiencies. As is the case for many family businesses, a few years ago the point was reached where there
was a need for think about change to accommodate succession planning and further capital to grow the
business. So began a journey by Hamish Millar into the world of equity partnerships.
52
This was a long journey and one filled with dry gullies but eventually Hamish found a suitable and willing
investment fund called Global Endowment Management (GEM). This US owned entity invests in a wide range
of assets and sectors around the world although in global terms it is a relatively small company. GEM believes
in direct investment which tends to deliver higher returns but have associated operational risk. Fortunately it
also had an understanding of the volatility of farming and the cyclical nature of agriculture. The bottom line
is achieving a 5% return on assets. At the time that Hamish was looking for a partner, GEM was in the midst
of purchasing an aggregation of irrigation properties in the EIA and forming a new company called Cowal
Agriculture Operations Pty Ltd. By happy circumstances this aggregation adjoined Millar Farms and at the
same time Cowal Agriculture was looking for an experienced person to manage the aggregation.
Millar Farms thus partnered with Cowal Agriculture and Hamish was appointed as Managing Director. The
company now owns and operates 5,000 hectares of cropland along the Nogoa River irrigated by the Fairbairn
Dam 20 kilometres upstream, and producing summer and winter crops including; cotton, mungbean, sorghum,
chickpeas and wheat, primarily for export to Asia.
It is early days with this model but it provides a potential signpost for the future of family owned businesses
in Central Queensland. The standout lessons can be summarised as follows:
»» There is plentiful capital looking for a home in agriculture but finding an investment fund that is prepared
to invest directly and has an understanding of the risks requires a bit of homework and persistence;
»» A key to making a joint venture deal work is having the right operator to run the assets. Experienced
owner-operators who are prepared to put some skin in the game have much to offer in this space but
need to understand that a much higher level of management, reporting and accountability will be required
than has probably been the case in their family run businesses.
53
7. Way Forward
Regional Development Australia Fitzroy and Central West (RDAFCW) understands the opportunity that
Australia has in the international agricultural arena as well as Central Queensland’s competitive advantage in
the domestic market. RDAFCW through facilitating Growing Central Queensland has identified that industry
structural change is needed to support agricultural productivity and has developed process and investment
models needed to address these issues.
Growing Central Queensland has identified that a combination of business models is needed to fund and
accommodate this industry structural change. It is accepted that economic viability is a precondition for
agricultural investments to benefit the local population and that the choice among alternative business models
needs to be grounded on solid economic analysis.
There needs to be a focus on the way that different types of business models share value between business
partners. For family farms it may be changing their structure to one or a combination of:
»» Management and lease contracts
»» Joint ventures
»» Farmer owned cooperative business
»» Supply chain opportunities
»» Outright sale
When considering options for alternative business structures and the understanding that the land and economic
opportunity in agriculture are not mutually inclusive, family farms need to ask and understand their needs in:
»» Ownership: of the business (equity shares), and of key project assets such as land and processing facilities.
»» Voice: The ability to influence key business decisions, including weight in decision making, arrangements
for review and grievance, and mechanisms for dealing with asymmetries in information access.
»» Risk: including commercial (production supply and market), political and reputational.
»» Reward: the sharing of economic costs and benefits including price setting and finance agreements.
Understanding what style of investment best suits the family farm in question takes the agricultural opportunity
a substantial way to “Investment Ready”. Both landholders/business owners and potential investors can use this
simple assessment tool to understand the level of ownership, voice, risk and opportunity that would suit the
outcomes they are seeking both personally and professionally.
Agricultural ‘Investment Ready” propositions are a complicated space that require traction at multiple levels
of government and regulatory authorities while incorporating what will often be many and differing levels of
commitment from landholders. Asking “who is the investor” has resulted in a range of responses that include
the neighbouring landholder through to international investors. All responses are legitimate and provide part of
the mix across differing investment or business models.
The Growing Central Queensland project has found that there is a significant market failure in taking
opportunities from the ground up to an “investment ready stage”. The project provides a significant link to
satisfy this aspect in the marketplace under a commercial framework.
Growing Central Queensland is currently performing the role of enabling interested parties in the agricultural
space to develop projects to the point where they can be partnered with individual financial and corporate
investors. Working with Queensland State Government, Trade and Investment Queensland, Regional
Development Australia, Local Councils, International Investors and local agricultural investors and service
providers, Growing Central Queensland is creating the environment to attract catalytic investment to the region.
Because Growing Central Queensland is a collaborative partnership between all three levels of government
it has the ability to build the pathway through regulatory requirements to provide a clear line between the
potential investor and proposed projects.
54
Fitzroy and Central West Inc.
25 Yeppoon Road
Parkhurst Q 4701
PO Box 307
Rockhampton Q 4700
P: 07 4923 6217
E: [email protected]
www.rdafcw.com.au