ABARES publishes working papers to provide its research teams with the opportunity for external peer review of ongoing research projects.
These papers are technical in nature and written in the style of a journal paper. Some of these working papers may be submitted to and accepted by a journal, or they may continue development as part of a research report intended for formal publication as an ABARES product.
Current working papers
This paper presents an economic model of water markets and irrigated agriculture within the Australian southern Murray-Darling Basin (sMDB). A unique data set, detailing irrigation activity, water supply and prices over the period 2000-01 to 2018-19, is used to estimate a set of water demand functions by catchment region and irrigation activity. The resulting model can realistically simulate the market prices of water, carryover volumes and trade flows across the sMDB along with irrigation water use and area planted by region and activity.
The model is applied to simulate distributions for water prices in the sMDB, and to estimate the economic benefits of interregional water trading and carryover. Water markets are estimated to generate benefits to water users in the sMDB of $117m per year on average (around 12 per cent of the market value of water rights in the region). The benefits of water markets are reduced by around half in the absence of carryover.
The Defining drought from the perspective of Australian farmers working paper presents a new drought indicator as an alternative to traditional rainfall measures.
The new indicator is found to more accurately reflect the effects of drought on farm profits than simple rainfall measures, accounting for the unique circumstances of each farm and the effects of movements in domestic commodity prices (i.e. high grain and hay prices).
The Defining drought risk report also presents data on farmer self-assessments of drought. These data show differences in farmer perception of drought once variation in climate conditions has been controlled for. This includes a tendency for farmers in New South Wales and Queensland to be more likely to self-assess as ‘in-drought’ than farmers in Western Australia. There is also a trend for current farmers to be less likely to assess as in-drought than farmers in the past.
ABARES has developed a new model, farmpredict which can simulate the effects of price and climate variability on the production and profitability of Australian broadacre farms. farmpredict simulates the production of outputs, the use of inputs and changes in farm stocks at a farm level, given information on farm fixed inputs, input and output prices and prevailing climate conditions.
This paper presents a new farm level microsimulation model of irrigation activity within the southern Murray-Darling Basin (sMDB), developed by ABARES on behalf of the Department of Agriculture and Water Resources.
ABARES working papers are available for your use under a Creative Commons Attribution 4.0 International Licence except content supplied by third parties, logos and the Commonwealth Coat of Arms.
Inquiries about the licence and any use of this document should be emailed to Copyright.
Use of ABARES material under a Creative Commons Attribution 4.0 International Licence requires you to attribute the work (but not in any way that suggests that ABARES endorses you or your use of the work).
ABARES material used 'as supplied'
Provided you have not modified or transformed ABARES material in any way including, for example, by changing the ABARES text; calculating percentage changes; graphing or charting data; or deriving new statistics from published ABARES statistics — then ABARES prefers the following attribution:
Source: Australian Bureau of Agricultural and Resource Economics and Sciences
If you have modified or transformed ABARES material, or derived new material from those of ABARES in any way, then ABARES prefers the following attribution:
Based on Australian Bureau of Agricultural and Resource Economics and Sciences data