• Change text size
• Skip to content

Australian Natural Resources Atlas

• About us
• Contact us

Search

• ANRA home
  • Map maker
  • Natural resource topics
  • Data Library

• Natural resource topics
  • Agriculture
  • Coasts
  • Dryland Salinity
  • Invasive species
  • Irrigation
  • Land
  • Natural resource economics
  • People
  • Rangelands
  • Soils
  • Vegetation and biodiversity
  • Water
  • Publications

• Natural resource economics
  • Overview
  • Accounting framework

• Agriculture Costs and Returns
  • New South Wales
  • Victoria
  • Queensland
  • South Australia
  • Western Australia
  • Tasmania
  • Northern Territory
  • Australian Capital Territory

• • Valuing assets

Economics - Western Australia

Specify a region: -- select region -- Albany Coast Ashburton River Avon River Blackwood River Busselton Coast Cape Leveque Coast Collie River De Grey River Denmark River Donnelly River Drysdale River Esperance Coast Fitzroy River (WA) Fortescue River Frankland River Gascoyne River Greenough River Harvey River Isdell River Keep River Kent River King Edward River Lennard River Lyndon-Minilya Rivers Mackay Moore-Hill Rivers Murchison River Murray River (WA) Ninghan Nullarbor Onslow Coast Ord River Pentecost River Port Hedland Coast Preston River Prince Regent River Salt Lake Sandy Desert Shannon River Swan Coast Warburton Warren River Wooramel River Yarra Yarra Lakes

Western Australia

Economics - returns to the land and water resource base and costs of degradation

New data sets have been developed through the National Land and Water Resources Audit that relate to economic aspects of natural resource management in Australia. There is a focus on resources used to support agriculture and resources impacted by agriculture. The Australia-wide report provides:

• An overview of the economic returns from the Nation's land and water resources used in agriculture;
• An agricultural or within pa.gifk perspective on economic aspects of salinity, sodicity and acidity;
• A "beyond the farm gate" perspective on impacts of agriculture on local infrastructure and downstream water users;
• Information on willingness to pay to slow rural population decline and improve environmental attributes that are not part of the market for agricultural products;
• An overview of how the databases developed for this project are organised and observations about ways they can be developed further to assist decision makers.

Consistent with protocols used by the Australian Bureau of Statistics and the Australian Bureau of Agriculture and Resource Economics, the database provides a new capacity to integrate natural resource information in Australia. The data sets are primarily built for the 1996/97 financial year, the year of an agricultural census. Except where stated otherwise, all dollar values given are in 1996/97 dollars.

Most of the data is represented on a 1km by 1km grid covering agricultural land. Whilst modelled at this level of spatial detail interpretation should generally occur at coarser levels. Data on downstream infrastructure costs of deteriorating water quality has been assembled by river basin.

River basin scale aggregate information may be viewed to by selecting a river basin from the menu at the top of this page or by using the links in the table or map below.

Agricultural profitability in Western Australia

Economic returns to natural resource base from agriculture are measured using profit at full equity. This is the economic return to land, capital and management after the value of labour provided by managers has been deducted. It does not include any debt payments to financial institutions. Estimates of profit at full equity differ from gross margins, a commonly used measure of agricultural financial performance, by including fixed costs of production (e.g. depreciation of capital assets, labour).

Profit at full equity measures presented in this report are derived from survey data, satellite data, government reports, gross margin handbooks and other sources. Profit has been mapped on a 1km by 1km grid covering the nation, although underlying source data is accurate at coarser levels of spatial detail. The twelve variables relating to prices, yields and costs used to derive profit at full equity are also mapped to a 1 km grid. A shortened version of the profit equation reads:

Profit At Full Equity=Price x Quantity - Variable Costs - Fixed Costs

To gain an appreciation for how economic returns to agriculture varied across Australia, profit at full equity was computed based both on 1996/97 prices and at average prices over the period 1992/93 to 1996/97.

Using 1996/97 prices and yields, the estimated total profit at full equity was roughly $6,555 million for the Nation. An area of 311.5 million hectares, 66% of agricultural land, made a loss and 159.9 million hectares, 34% of agricultural land, made a profit. The bulk of the loss-making areas were the low-rainfall sheep/beef grazing lands. The following map shows profit at full equity for 1996/97.

River basin name	1996/97 Gross revenue	1996/97 Profit at full equity	5yr (1992/93 - 1996/97) Profit at full equity
Albany Coast	213,375	48,660	53,686
Ashburton River	6,701	-1,912	744
Avon River	1,098,839	373,933	303,668
Blackwood River	375,970	131,912	135,062
Busselton Coast	111,022	55,448	49,669
Cape Leveque Coast	3,846	-304	1,683
Collie River	53,873	32,313	28,999
De Grey River	7,834	-2,259	1,287
Denmark River	34,505	5,584	5,791
Donnelly River	16,414	5,484	4,875
Drysdale River	3,546	-281	1,888
Esperance Coast	164,471	46,518	35,683
Fitzroy River (WA)	25,692	-1,399	12,663
Fortescue River	5,241	-1,634	715
Frankland River	60,981	15,298	15,315
Gascoyne River	10,705	-1,600	800
Greenough River	225,569	44,735	50,605
Harvey River	61,982	36,832	33,449
Isdell River	2,823	148	1,623
Keep River	3,267	814	1,690
Kent River	22,555	3,764	2,943
King Edward River	30,103	14,041	14,778
Lennard River	4,447	148	2,470
Lyndon-Minilya Rivers	13,579	3,161	6,052
Mackay	15,695	-1,751	2,940
Moore-Hill Rivers	231,050	39,082	36,099
Murchison River	46,055	-8,545	-5,146
Murray River (WA)	126,268	44,108	48,891
Ninghan	26,194	2,197	785
Nullarbor	4,714	-2,152	-1,116
Onslow Coast	1,879	-628	251
Ord River	50,944	20,456	27,564
Pentecost River	4,784	-837	2,084
Port Hedland Coast	4,517	-832	1,817
Preston River	38,694	17,355	17,237
Prince Regent River	488	28	294
Salt Lake	76,988	3,106	903
Sandy Desert	5,836	-1,526	1,486
Shannon River	19,353	7,601	7,217
Swan Coast	69,783	-25	-1,945
Warburton	2,518	-3,848	-2,753
Warren River	64,435	25,168	23,923
Wooramel River	7,895	-2,337	-911
Yarra Yarra Lakes	122,609	18,414	21,184

Click on the river basin name or map below to view a report on the returns to the agricultural resource base and costs of degradation.

Soil resources: economic opportunities in Western Australia

An assessment was made of the economic opportunities associated with managing saline, sodic and acidic soils. This assessment did not contrast current soil conditions with pristine soil conditions. Rather, it focused on the economic opportunities arising from future changes to soil condition.

In the assessment measures of gross benefit and impact cost are provided. The gross benefit is the additional profit at full equity attainable in a given year if the soil constraint were removed without cost. It can be considered an approximate investment ceiling for soil treatment. Impact cost measures the decline in profits due to worsening salinity extent and severity over the next 20 years (2000 to 2020). In addition to these measures, a benefit cost analysis of lime and gypsum application to ameliorate acidic and sodic soils was undertaken.

The table below places this State/Territory in context:

	Salinity $m	Sodicity $m	Acidity $m	Limiting factor $m
New South Wales	6.3	280.3	378.7	624.1
Victoria	18.5	342.5	471.1	757.4
Queensland	10.2	180.3	232.5	392.9
South Australia	39.1	126.4	2.9	162.0
Western Australia	111.0	89.7	226.1	341.6
Tasmania	1.9	12.3	214.8	220.3
Northern Territory	0.0	3.0	58.2	61.1
Australian Capital Territory	0.0	0.0	0.2	0.2
Australia	187.0	1,034.6	1,584.5	2,559.5

Costs beyond the farm gate in Western Australia

In addition to the agricultural productivity impacts, increasing concerns are being voiced about the effects of land and soil degradation on water quality, landscape amenity values, biodiversity, the environment and other attributes. The direct market impacts of agriculture that occur beyond the farm gate fall into two categories:

• Local impacts on infrastructure; and
• Downstream impacts on urban and industrial water users.

Local Infrastructure Costs of Salinity and Watertable Rise

In order to estimate local infrastructure impacts, unit cost functions for salinity and water table rise were developed for three levels of impact: slight, moderate and severe for the following infrastructure categories:

• General urban and minor infrastructure in non-metropolitan towns and rural areas including minor roads, bridges, underground drainage, aerodromes, public buildings, parks and gardens, and sporting fields;
• Private non-agricultural assets in non-metropolitan towns: domestic buildings, commercial/retail buildings, industrial buildings, septic systems and service stations;
• Major roads, including national highways, rural arterials and urban arterials and bridges associated with these;
• Railways; and
• Power and communication infrastructure: power transmission, pipelines etc.

The current impact of water table rise and dryland salinity in non-metropolitan Australia is estimated to range between $30 million/yr and $125 million/yr with a best-bet estimate of $89 million/yr as shown in the following table.

Table: Estimated current impacts on local infrastructure of watertable rise and salinity in non-metropolitan areas (millions/yr)

	Low estimate	Best-bet estimate	High estimate
New South Wales	4.4	14.0	19.7
Victoria	3.9	12.2	17.3
Queensland	0.7	2.2	3.1
South Australia	4.5	6.7	8.3
Western Australia	16.3	51.8	73.8
Tasmania	0.6	1.9	2.7
Australian Capital Territory	0.0	0.0	0.0
Total	30.3	88.8	124.9

Further information

View the Australians and Natural Resource Management 2002 (theme) report.

View other Audit assessments by clicking the links below:

• Australian Water Resources Assessment 2000
• Australian Dryland Salinity Assessment 2000
• Australian Native Vegetation Assessment 2001
• Rangelands - tracking changes: Australian Collaborative Rangeland Information System
• Australian Agriculture Assessment 2001
• Australian Catchment, River and Estuary Assessment 2002
• Australian Terrestrial Biodiversity Assessment 2002

View "Natural Resource Economics" project and technical reports:

A project report has been prepared by CSIRO Land and Water Policy and Economic Research Unit in the development of this work:

• "Values of returns to land and water and costs of degradation" Edited by S.A. Hajkowicz and M.D. Young (PDF - 2.8 MB)

The technical appendices of "Values of returns to land and water and costs of degradation" report contain detailed descriptions of the methods used in this work:

• "Values of returns to land and water and costs of degradation" Edited by S.A. Hajkowicz and M.D. Young (PDF - 2.8 MB)

The technical appendices of "Values of returns to land and water and costs of degradation" report also includes a number of component project reports. These report may be viewed separately:

• "Ex-situ Costs of Australian Land and Water Resources Degradation to non-Agricultural Industries, Infrastructure and Households - REPORT A: EX-SITU COSTS OF SALINITY " by J.F.Thomas, The Resource Economic Unit, PPK Environment & Infrastructure (PPK) (PDF - 400 KB)
• "Ex-situ Costs of Australian Land and Water Resources Degradation to non-Agricultural Industries, Infrastructure and Households- REPORT B: EX-SITU COSTS OF EROSION AND SEDIMENTATION " by J.F.Thomas, The Resource Economic Unit, PPK Environment & Infrastructure (PPK) (PDF - 300 KB)
• "Ex-situ Costs of Australian Land and Water Resources Degradation to non-Agricultural Industries, Infrastructure and Households - REPORT C: TOTAL EX-SITU DAMAGE COST ESTIMATES FOR SALINITY, WATER TURBIDITY, AND EROSION" by by J.F.Thomas, The Resource Economic Unit (PDF - 400 KB)
• "The Ex-Situ Impacts to Industrial and Commercial Water Users Due to Degradation in the Quality of Water Resources" by PPK Environment Infrastructure Pty Ltd (PDF 0.2 MB)
• "Estimating community values for land and water degradation impacts" Martin van Bueren and Jeff Bennett (PDF - 1.5 MB)

Case study: View or download a technical report and appendices on dryland salinity:

• Capacity to change - Case studies of dryland salinity and watertable control by Mike Read. (PDF - 1.2 MB)
• Capacity to change - Case studies of dryland salinity and watertable control - APPENDICES by Mike Read. (PDF - 1.9 MB)

View "People" project and technical reports:

• "Framework and Review of Capacity and Motivation for Change to Sustainable Management Practices" by D. Mark Fenton, Colin MacGregor and John Cary (PDF - 410 KB)
• *"Human and social aspects capacity to change to sustainable management practices" by John Cary, Neil Barr, Heather Aslin, Trevor Webb and Shannon Kelson (PDF - 707 KB)

This report does not contain maps and needs to be read in conjunction with:

• "Social Atlas for sustainable management - a social and economic database" by John Cary, Shannon Kelson and Heather Aslin. (PDF - 165 KB)
• the image files for the "Social Atlas for sustainable management - a social and economic database" report by John Cary, Shannon Kelson and Heather Aslin (Zip - 7.8 MB)
• "Structural change in Australian agriculture: implications for natural resource management" by Neil Barr (PDF - 1.8 MB)
• "Structural change in Australian agriculture: implications for natural resource management - APPENDICES" by Neil Barr (PDF - 4.3 MB)

Link to the Map Maker to view economic data.

Link to the Australian Natural Resources Data Library - to download economic and social data