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    The paper examines the economic and policy implications of transformational changes.
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    The regional CGE model demonstrates cost to the regional economy.
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    Relocation of some rice production to the northern Australia could offset potential impact.
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    Market incentives for the expansion of rice production in the northern Queensland are limited.
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    Strong government support would be crucial to implement any possible relocation.

Abstract

The development or expansion of existing land use, agricultural industries are seen a way to manage global food security in the face climate change and reduced water availability in the traditional cropping regions. This paper examines economic and policy implications of incremental and transformational changes in production location by considering the net effects of shifting rice production from a southern area to the sugar dominated Burdekin area in northern Queensland, using a dynamic regional computable general 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 real income, although adopting a rice-sugarcane rotation in Burdekin could partly offset some of the negative impact. The displacement of sugar would result in a much larger net national loss and consequent net reduction in gross regional product (GRP). The study findings suggest that there is unlikely to be a rapid and spontaneous increase in rice production in the north, because of a lack of infrastructure, wariness in relation 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 more rapid expansion would need access to government assistance.

Keywords

  • Computable general equilibrium model
  • Rice
  • Sugarcane
  • Water
  • Regional climate change
  • Land use policy