Economic and policy implications of relocation of agriculturalproduction systems under changing climate: example of Australian rice industry

Economic and policy implications of relocation of agriculturalproduction systems under changing climate: example of Australian rice industry

The development or expansion of existing land use, agricultural industries are seen a way to manageglobal food security in the face climate change and reduced water availability in the traditional croppingregions. This paper examines economic and policy implications of incremental and transformationalchanges in production location by considering the net effects of shifting rice production from a southernarea to the sugar dominated Burdekin area in northern Queensland, using a dynamic regional computablegeneral equilibrium (CGE) model. Three rice transformational adaptation scenarios at two time points,2030 and 2070, were considered. The results suggest a net reduction in real economic output and realincome, although adopting a rice-sugarcane rotation in Burdekin could partly offset some of the negativeimpact. The displacement of sugar would result in a much larger net national loss and consequent netreduction in gross regional product (GRP). The study findings suggest that there is unlikely to be a rapidand spontaneous increase in rice production in the north, because of a lack of infrastructure, wariness inrelation to the agronomic issues, the lower profits and the opportunity cost of turning away from sugar.Currently private investment in infrastructure can keep pace with the level of production, but a morerapid expansion would need access to government assistance.

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