23 Aug 2017
A lot has been said and written about the Adani Carmichael mine. Without question, it is the most controversial mine under consideration in Australia right now. Farmers for Climate Action (FCA) recently weighed in to the discussion releasing a report it commissioned – ‘Growth Opportunities and Constraints for Agriculture in Northern Australia’ (the Quiggin Report) – that looks at alternative uses for the $900 million Australian Government loan to support the construction of a dedicated rail line.
From QFF’s perspective, the real value of the Quiggin report is not about pitching mining and agriculture against each other – these two primary sectors must coexist for the betterment of regional communities and state and national economic prosperity. Rather, in a tight fiscal environment, its value is in critically analysing the benefits of initially allocating nearly a billion dollars of public funds. The report draws some interesting conclusions, but it is important to note that it is not making like for like comparisons as the Adani rail line money is a loan while most of the agricultural investments proposed would not be recouped.
It is encouraging when governments commit to investing in enabling infrastructure, as the right economic infrastructure is a fundamental driver of economic change. The $5 billion Northern Australia Infrastructure Facility (NAIF) provides the potential for a renewed public role in the development of North Queensland.
With unemployment in the region currently about 11%, jobs are badly needed. The report provides some useful jobs analysis and draws some interesting conclusions. Considering the rail project specifically, the report suggests that a 10-year $900 million loan will generate approximately 336 full time jobs per year averaged over the loan term. If the analysis is correct, this equates to $2.7 million public capital invested per job created.
The alternative investment in agricultural-related projects proposed includes: building beef roads, natural resource management, increased RD&E funding, agricultural workforce skills, capping bores in the Great Artesian Basin, disaster preparedness and response, concessional finance, and rail. The report claims that these projects could deliver 632 direct jobs per year over the 10 years. However, the majority of this investment would not be paid back.
Loans under the NAIF must be for economic infrastructure that benefits northern Australia, such as developments in airports, communications, energy, ports, rail and water. Therefore not all the agricultural-related projects proposed would qualify for this funding, but the report claims that the analysis demonstrates that alternative investments targeting agricultural constraints in North Queensland would have greater social benefits while subjecting the Commonwealth to a lower level of capital risk.
Acknowledgment and acceptance of the report’s findings will largely depend which side of the fence you sit on regarding Adani. Regardless, it provides some interesting thinking about developing North Queensland and demonstrates that government investment in agriculture’s future will return high economic and social returns.
Realising the sector’s bright future by capitalising on the opportunities in front of us will not happen by accident – it will require deliberate and strategic action. Only through the right policy settings and effective collaboration between industry, government and community will we unleash the full potential of Queensland agriculture.
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