Adapting to on-going drought in the Murray-Darling Basin

Dale Ashton

Senior Economist

ABARE

Managing change.

Financing farm activities

Changes to farmmanagement

Farm income and profit

Debt and equity

Non-farm income

Enterprise mix

Irrigation technologies

Water trading

Farm cash incomeby industry

20

40

60

80

100

120

Broadacre Dairy Horticulture

2006-07

2007-08

Average per farm

$’000

Percentage change in farm business debt

-2

2

4

6

8

10

Horticulture Broadacre Dairy

2006-07

2007-08

%

Components of debt50 100 150 200 250

Land purchase

Land development

Buildings/structures

Plant/equipment

Working capital

Debt reconstruction

Other

2006-07

2007-08

Average per farm

$’000

Percent of farms making capital additions

10

20

30

40

50

60

Horticulture Broadacre Dairy Murray-Darling Basin

2006-07

2007-08

%

Distribution of farms by equity ratio

90 to 99% equity

Less than 75% equity

100% equity

75 to 89% equity

Distribution of farms by equity ratio

Less than 75% equity

AND low farm income

Contribution of non-farm income to total farm family income

0%

20%

40%

60%

80%

100%

Horticulture Broadacre Dairy

Non-farm income

Farm income

Average net returns per hectare

-2

-1

1

2

3

4

5

6

7

8

9

$’000/ha

Water application per hectare

1

2

3

4

5

6

ML/ha

Water application per hectare

1

2

3

4

5

6

ML/ha

Percent of farms trading water

5

10

15

20

25

30

35

Permanent entitlements Temporary allocations

2006-07

2007-08

%

Percent of farms that were net buyers of temporary water allocations

%

5

10

15

20

25

30

35

40

45

Horticulture Broadacre Dairy

2006-07

2007-08

Managing change.

Financing farm activities

Changes to farmmanagement

Farm income and profit

Debt and equity

Non-farm income

Enterprise mix

Irrigation technologies

Water trading