mmg.com.au

Surveys by the science body ABARES have revealed the poor financial performance of irrigated horticulture in Murray-Darling Basin between 2009 and 2011.

In 2009-10, total cash receipts for irrigated horticulture farms in Murray-Darling Basin rose by about three per cent, with increased receipts for tree and vine crops, livestock and off-farm contracts.

Total cash costs rose by about 10 per cent in 2009-10, with increases in expenditure on hired labour, packing materials, crop and pasture chemicals, fuel and interest payments being partly offset by reduced expenditure on temporary water allocations, fertiliser and freight.

Average farm cash income therefore fell by around 23 per cent to average $44602 a farm in 2009-10. Irrigated horticulture farms recorded an average farm business loss of $20885 per farm in 2009-10.

In 2010-11, total cash receipts are estimated to have declined by about five per cent, with lower receipts for tree and vine crops.

Total cash costs are estimated to have risen by less than one per cent in 2010-11, with increases in expenditure on hired labour, crop and pasture chemicals, freight and interest payments being offset by reduced expenditure on temporary water allocations, and repairs and maintenance.

Average farm cash income for irrigated horticulture farms is estimated to have fallen to $31171 per farm in 2010-11, with an average farm business loss of $36348 per farm.

In line with the recorded declines in farm cash income and farm business profit, the average rate of return (excluding capital appreciation) for irrigated horticulture farms in Murray-Darling Basin was estimated to have declined to 60.2 per cent in 2010-11, compared with an average of 0.3 per cent in 2009-10.

The best-performing regions for irrigated horticulture farms in 2010-11, by rate of return, were the Condamine-Balonne and Murray regions. The remaining regions, Border Rivers, Macquarie-Castlereagh, Lachlan, Murrumbidgee, Goulburn-Broken, Loddon-Avoca and Eastern Mount Lofty Ranges are estimated to have recorded negative rates of return in 2010-11.

Overall, prices received by Australian farmers for agricultural commodities were weaker in 2009-10 before rising in 2010-11. Although prices received for individual commodities were mixed, annual unit export returns for agricultural commodities fell by around 12 per cent in 2009-10 before recovering most of this fall in 2010-11 (ABARES 2011).

In 2007, ABARES began a large-scale survey of irrigators throughout Murray-Darling Basin to better understand and monitor the effects of poor seasonal conditions on irrigators and how the irrigation sector was adjusting to these effects.

The report presents an overview of results from the latest irrigation survey, covering 2009-10 as well as some preliminary estimates for 2010-11.