
SEA Working Paper 02/05
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National Economic and Policy Issues in the Productive Use of Salinised Resources
David J. Pannell
School of Agricultural and
Resource Economics, University of WA
CRC for Plant-Based Management of Dryland Salinity
INTRODUCTION
Prevention might be better than cure, but it is not necessarily better than living with the disease. The side effects of preventative medicine might do more damage than the disease itself. Tradeoffs of this type are an everyday reality in medicine. However some people are still not willing to consider that such tradeoffs are necessary in relation to salinity.
Even with massive intervention, continuing salinisation of resources in Australia is inevitable and unpreventable. For example, hydrologists in Western Australia have estimated that radical large-scale changes to farming practices would not prevent the area of saline land from increasing, perhaps by an additional 2.0 to 2.5 million ha, before stabilising (State Salinity Council 2000). (This particularly applies in low-to-medium rainfall regions of WA.) Without such radical changes the area would increase by approximately four million ha.
Some people view approaches for adapting to or living with salt as defeatist and for use as a last resort when preventative measures fail. This is an unrealistic attitude which, if not countered, will cost the community dearly by leaving us unprepared for the salinity that is inevitably coming.
Living with salinity can take a wide range of forms in different situations, as outlined in the following sections. One of my points in this paper is that we need to broaden the topic beyond agriculture, particularly from the point of view of having an influence in policy circles.
AGRICULTURE
Farmers with large areas of salt-affected land are trialling and implementing farming systems based on salt-tolerant species (e.g. salt bush, blue bush, tall wheat grass). In suitable circumstances, this can be a profitable strategy (O’Connell and Young, 2002).
Many farmers with salinised land in Western Australia are installing deep, open drains, intending to lower watertables locally and to allow a continuation or resumption of traditional agricultural practices between the drains. Although expensive to implement and maintain, many farmers feel that such drains offer their best option in response to salinisation of land.
Salt-tolerant plants and deep drains each have strong and enthusiastic advocates backing them. So who is right? It seems clear to me that there is no simple answer to the question of which of the two approaches is best. Both clearly do "work" in some situations and not in others, although what "work" means is open to discussion.
In WA wheatbelt valley floors, with essentially one-dimensional groundwater systems (i.e. minimal lateral water movement), it appears that salt bush plantations can lower water tables and freshen the soil surface sufficiently to allow annual plants to survive and provide useful livestock feed. Michael Lloyd’s farm is a great example of this system working in action. Analyses conducted by Ferdowsian et al. (2002) show the impressive effect of Michael’s saltbush on groundwater (Figure 1). They also reveal limits to the depth of that effectiveness. Water uptake appears to be limited to depths less than about two metres due to highly saline groundwaters at that depth. Michael’s system seems sustainable, in the sense that he will be able to maintain it in the long term (provided the plants are not droughted out), but in some other locations where saline groundwater is moving laterally towards the saltbush plantation, saltbush will probably have a limited life due to slow by steady accumulation of salt in the root zone. This does not imply that saltbush would not play a useful role in those locations until the point of excessive salinity is eventually reached.

Figure 1: Hydrograph for bore ML 8 on Michael Lloyd’s property, showing the net effect of saltbush on groundwater levels. (Final effect was a drop of 0.9m). During a number of months groundwater dropped below the bore’s maximum depth of 2.08m. (Source: Ferdowsian et al., 2002).
Deep drains have raised controversy, firstly because the disposal of saline waters collected in these drains can harm downstream resources, and secondly because of different views about their effectiveness. Early analyses by hydrologists (e.g. Speed and Simons 1992; Ferdowsian et al. 1997) reached negative conclusions. Nevertheless, the enthusiasm of some farmers has continued, and scientific evidence is now emerging that in some circumstances deep drains are technically effective at remediating saline land.
These brief comments highlight the great diversity that exists on and between farms in relation to salt land. Relevant sources of variation include:
Given the tremendous diversity in all these variables, there really should be no simplistic claims that one approach works and the other does not. There are no doubt locations where one is clearly favoured over the other, locations where they are both good options, and locations where neither is viable.
An issue that I have not raised in the above discussion is the on-farm economics of the options. Technical effectiveness of the options is clearly not sufficient; they must earn income for the farmer. This reduces the number of situations where either of them is attractive. Evaluating the economics of saltbush is rather complex for a range of reasons, but particularly because the value of feed is hard to determine and varies widely during the year. O’Connell and Young (2002) and John (2002) provide insights into the main complexities of this. Evaluating the economics of drains is complicated by the prominence of downstream concerns, particularly if those concerns relate to intangibles like environmental impacts.
Another option that is available to landholders is to allow salinity to occur unchecked and make do with smaller productive areas, perhaps with some intensification of production. In situations where treatments are expensive and/or slow to show benefits, and the assets at risk are not sufficiently valuable, such an option may conceivably be the most efficient course of action, not just for the farmer but also for society more generally.
SALINE WATER AS A RESOURCE
There is growing interest in economic uses for saline water (e.g. aquaculture, electricity generation, irrigation with brackish water, algae [e.g. for agar, b -carotene, pigments, fish food], seaweed) and the potential to extract valuable salts and minerals (e.g. magnesium, bromine, potassium chloride) The OPUS database http://www.ndsp.gov.au/opus/menu.htm contains information on these and many more options.
Where water resources are salinised, adaptation in the form of desalination is another option that appears to warrant further investigation (Winter et al., 2001). There have been steady improvements in desalination technology over the past few decades, and it appears to be on the verge of a major increase in usage. The economics of desalination are more likely to be favoured if the water can be desalinated locally and substitute for water piped over long distances. Further, if prevention of salinisation of a water resource catchment involves very high costs, desalination may again be a cheaper method to obtain fresh water. I suggest that this option deserves serious consideration and investigation for Adelaide’s water supply. Desalination may well form part of an integrated strategy for providing fresh water to the city.
INFRASTRUCTURE AND FLOODING
Even when it comes to high-value infrastructure and high impact events like flooding, some form of adaptation can be preferable to very expensive measures for prevention.
The impacts of salinity on built infrastructure have received increasing attention. According to the National Land and Water Resources Audit (2001), assets across the country at high risk from shallow saline watertables by 2050 include 67,000 km of road, 5,100 km of rail and 220 towns.
Rural towns
Effective groundwater management in rural towns often involves much more localised efforts than previously appreciated. In Western Australia, hydrologists recommend that the most important and effective treatment for preventing salinity damage within town sites is reducing recharge within the town site, and/or enhancing discharge in and around the town by engineering treatments, such as pumping (Dames and Moore – NRM 2001). It is believed that, in most cases, benefits from revegetation of surrounding farmland will be insufficient and/or too slow to prevent major damage to town infrastructure.
For towns such as Merredin, which have fresh water piped to them for domestic use, the problem is exacerbated by release of this imported water into the ground from garden irrigation systems or septic tanks. For some towns in Western Australia (e.g. Cranbrook, Tambellup), imported water and runoff from roofs and roads accounts for a substantial part of the groundwater rise within the town.
The Rural Towns Program is concerned with 42 WA towns facing salinity impacts. A number of these towns have been subjected to hydrological studies to identify systems of intervention which would be needed to reduce the impacts of salinity, and for six of them, detailed economic analyses conducted of these interventions have been conducted. These are very important studies and they have major implications for the management of salinity in the towns. Some of the common findings from the six towns are listed below, drawn from the report by Dames and Moore – NRM (2001).
Some of the actions recommended by the consultants are cheap and could be taken up immediately (e.g. appointment of "Water Wise" coordinators to provide advice to householders, businesses and builders). Nevertheless, managing rising groundwaters effectively in most of the towns will require expensive engineering works. In some of the towns, the cost of the recommended works is so high that it outweighs the potential salinity damage costs that would be avoided, implying that living with the salinity damage may be more economically efficient than attempting to prevent it. This is apparent in Table 1, which shows a summary of the economic analysis for each town. The costs shown are total costs over 30 or 60 years, discounted to present values using a 7% discount rate.
Table 1. Summary of economic analyses of salinity management for six towns in the Rural Towns Program
| Town | Timing of onset of major costs | Damage costs from salinity if no works undertaken | Total cost of possible works to control rising groundwater | Potential gain from engineering works |
| (time scale of estimates) | (years) | ($ million) | ($ million) | ($ million) |
| Brookton (60 years) |
4 | 0.62 | 0.28 | 0.34 |
| Corrigin (60 years) |
2 | 0.21 | -0.10 | 0.31 |
| Cranbrook (60 years) |
22 | 0.61 | 2.3 to 5.7 | -1.6 to -5.1 |
| Katanning (30 years) |
1 | 6.9 | 7.6 | -0.74 |
| Merredin (60 years) |
26 | 0.38 | 1.8 to 4.6 | -1.4 to –4.2 |
| Morawa (30 years) |
1 | 0.25 | 0.90 | -0.65 |
The final column shows an estimate of the net benefits of strong intervention in the towns, based on an assumption that it would result in prevention of all costs listed in the third column. It is striking that in four of the six towns, the economics of the engineering interventions studied appear adverse. The two positive results, Brookton and Corrigin, have the advantage of being able to make some valuable use of the pumped water. Even in Katanning, which is probably the most salt-threatened town in Australia, the cost estimated for disposal of pumped saline water into lined evaporation ponds is so high that it roughly cancels out all the benefits from salinity prevention. If it is difficult to economically justify lined evaporation basins to protect the extreme example of Katanning, it seems unlikely that this approach could pay off in any less extreme cases.
Care is needed in interpreting the result that engineering works for salinity prevention are not economically viable in several of the towns. It does not imply that the town’s infrastructure should be left to deteriorate without any response. Rather it implies that it is cheaper to allow groundwaters to rise and then to repair the damage caused, than to attempt to prevent that damage. Money would be spent on repairs, but in three of the towns, the cost of repairs would be approximately 25 percent (or less) of the costs of preventing the damage. In this way, the towns would be adapting to the presence of salinity, rather than preventing it.
Flood risk
Increased flood risks have been studied for only a small number of case studies (e.g. Bowman and Ruprecht 2000). Extrapolating from these, George et al. (1999) concluded that, with the predicted two- to four-fold increase in area of wheatbelt land with shallow watertables, there will be at least a two-fold increase in flood flows.
There has been no economic analysis of this additional flood risk or its management. One question is whether the costs of floods will be sufficient to justify major revegetation of catchments. Based on a consideration of the large areas over which flood waters can be collected in wheatbelt catchments, and the occasional nature of floods, my hypothesis would be that flood risk will provide only small to modest additional incentives for establishment of perennials. It may be more efficient to construct engineering works near to flood prone assets (i.e. to adapt to the increased risk of flooding). Further economic studies to examine this issue would be useful.
EAST-WEST DIFFERENCES
In presenting talks about salinity on both sides of the country, I am struck by some important differences – attitudinal and technical – and these have major implications for PUR$L. Before I comment on some of the specific differences, I will note their overall impact: in the west the importance of options for living with salinity is well accepted by most, whereas in the east it is still viewed as an unacceptable or irrelevant option by many, including in policy spheres. The differences that lie behind this overall difference are explored below. In this discussion, those parts of agricultural South Australia that lie outside the Murray-Darling Basin are usually (but not always) best considered as part of "the west".
Different types of resources under threat
In the west, the key salinity concerns relate to salinisation of land, with resultant impacts on agricultural production, infrastructure, biodiversity, and flood risk. In the east, all of these issues are relevant, but the over-riding concern is with the salinisation of waterways that are part of the Murray-Darling system. In WA, there are a number of water resource catchments, but the areas of agricultural land they contain are tiny on a state scale, whereas the catchments of the Murray-Darling system contain most of the extensive agricultural land east of Adelaide.
Implication: options to live with salinised land are unacceptable in the east because they do not help deal with the issue of highest concern - water resources.
Different current and predicted extents of salinised land
First-time visitors from WA to rural areas of eastern Australia are astonished at how little salinity is visible. In stark contrast to the situation in WA, in many areas of the east one has to search to find significant areas of saline land. The National Land and Water Resources Audit (2001) estimates that the area of land in Australia with "a high potential to develop dryland salinity"* is currently 5.7 million ha and will reach 17 million ha by 2050. Western Australia has by far the greatest affected area, with 80 per cent of current national total, and 50 per cent of the 2050 forecast area. There are a number of concerns about the way that the published estimates of the audit were made, and when these are accounted for the true dominance of Western Australia in saline area is almost certainly even greater than those numbers indicate.
Implication: living with large areas of salinity is a pressing need for many western farmers, but not for very many in the east. This difference will persist.
Different current rates of land clearing
Rates of new clearing in WA have been very low for some years and will be almost non-existent in future following recent policy changes. In the east, clearing is still a very significant issue, particularly in New South Wales and Queensland.
Implication: the pressing need for policy makers to deal with clearing distracts them from considering options for living with salinity. Indeed options for living with salinity would seem to conflict with the policy agenda to end clearing, given that "living with salinity" might be viewed as condoning or accepting further clearing.
Different groundwater flow systems
One difference that has been publicised in the results of the National Land and Water Resources Audit (2001) is that the west has a greater proportion of "local" groundwater flow systems, whereas in the east there are more "intermediate" and "regional" flow systems. It has been claimed that salinity is easier to prevent and manage in locations with local flow systems. However, the significance of this difference has been overstated. In reality, the difficulty of preventing salinity is very great in both regions. Even in WA with its supposedly local systems, getting groundwater systems back into balance is a century-long project in most of the wheatbelt. Only in relatively undulating landscapes to the west and south of the WA wheatbelt are the flow systems sufficiently localised to be manageable on time scales that are relevant to small businesses (like farms). Conversely, there are regions in the east where systems are similarly localised, and similarly manageable.
Implication: little difference between east and west in the relevance of PUR$L in this regard.
Different levels of experience with management of salinity
Compared to most of their eastern peers, most farmers in the west have much greater experience at managing salinity on their own property. They are much more aware of the extreme difficulty of preventing salinity, because they and their neighbours have tried and they can all observe directly that many attempts have failed. They know all too well that small to moderate-scale planting of perennials achieves little or nothing in the way of salinity prevention, and this knowledge has also reached most professionals supporting agriculture in WA. The attitude of many WA farmers towards small scale subsidies for planting non-commercial trees (as in NHT) is decidedly negative, because they now know that it will draw in their own resources of time and money without helping to prevent salinity. By contrast, eastern farmers are somewhat less aware of these realities, and many professionals supporting agriculture in the east are very much less aware of them.
Implication: The politics of salinity is different in east and west. In the east, governments can get away with policies based on partial subsidies that will achieve little in the way of salinity prevention (i.e. NHT and NAP), because it is not yet widely-enough appreciated that this is the case. Such policies are far less accepted in the west.
Different distances from Canberra
Despite its dominance of most salinity statistics, the situation in WA is not well appreciated by policy makers and politicians outside the state. Indeed, very reasonable resistance to the design of the NAP by the WA government has been met with great suspicion and misinterpreted in Canberra.
Implication: the policy imbalance against options for living with salinity is not likely to be redressed quickly.
THE EVOLVING ATTITUDES OF POLICY MAKERS
Robertson (2002) noted that the importance of options for living with salinity has been well understood and argued at PUR$L conferences starting in 1993. The observations in the previous section go some way towards explaining the historical neglect of this knowledge by policy makers, particularly those responsible for NHT and the first round of the National Dryland Salinity Program.
Nevertheless, there has been a slowly growing recognition of PUR$L and related issues:
The remaining dominoes to fall are, unfortunately, important ones: the federal government, and state governments in NSW, Victoria and South Australia. Their resistance is somewhat understandable, given the issues outlined in the previous section, but it surely cannot be maintained for very much longer.
POLICY QUESTIONS
To finish, I will highlight a number of questions that will be important influences on the way that productive use of salinised resources is treated in policy spheres in future. The answers to each of these questions are, I believe, important in determining the future direction of policy in Australia.
1. What are the magnitudes of community-wide benefits from managing saltland on farms? Some of the resistance to policy support for management of saltland arises from a view that the benefits of that management accrue only to private land managers. There is some anecdotal evidence that well managed saltland provides improved habitat for native animals of various types, but to my knowledge, no scientifically defensible evidence has been collected to test this. Similarly there are claims that saltbush plantations will reduce flood risk and stabilise soils that would otherwise have eroded and contributed sediment and nutrients into waterways. Scientific evidence on each of these issues would help clarify the policy debate and may be highly influential, particularly among those policy makers and policy advisors who emphasise the pre-eminence of public benefits over private benefits as a justification for government support.
2. In what situations, and to what extent, are the private benefits of systems for managing saltland sufficient to justify uptake of those systems, without requiring public intervention. In other situations, how great is the profit gap? Information about this would help to clarify the extent of policy support that would be needed in different situations to ensure uptake of saltland management options. Policy makers could then weigh this up against the answers to question 1 to judge whether financial support may be beneficial.
3. To what extent can R&D bridge the profit gap? If R&D can substantially improve the economic performance of PUR$L options, it may be the most effective way to enhance the uptake of those options over large areas. Channeling policy funds into subsidies means that they can only affect relatively small areas if they are set at levels high enough to really influence farmers’ decisions.
CONCLUSION
In recent years there has been an increasing recognition of the importance of options for living with salinity. Many now realise that we really don’t have a choice between salinity and no salinity, but that we do have a choice between being prepared and unprepared for salinity. The early acceptance of this reality will help the community in a range of ways, including: support for development and testing of improved systems for making productive use of salinised resources; private and public benefits from productive use of resources that are already salinised; and savings in spending on fruitless attempts to prevent salinity in situations where it is not practically preventable.
ACKNOWLEDGMENTS
Thanks to the generous colleagues and collaborators who have contributed in various ways to my salinity research over the past five years. I thank Grains Research and Development Corporation for funding support.
REFERENCES
Bowman, S. and Ruprecht, J.K. (2000). Blackwood River Catchment Flood Risk Study, Water and Rivers Commission Report No. SWH 29, Western Australian Government, East Perth, WA.
Dames and Moore – NRM (2001). ‘The Economics of Predicted Rising Groundwater and Salinity in Rural Towns’, Dames and Moore – NRM, East Perth.
Ferdowsian, R., Ryder, A. and Kelly, J. (1997). ‘Evaluation of Deep Open Drains in the North Stirlings Area’, Resource Management Technical Report 161, April 1997, Agriculture Western Australia, South Perth.
Ferdowsian, R., Pannell, D.J., and Lloyd, M. (2002). Explaining groundwater depths in saltland: impacts of saltbush, rainfall, and time trends, PUR$L 2002, Productive Use and Rehabilitation of Saline Lands, 8th National Conference, Fremantle, 16-20 September 2002.
Frost, F.M., Hamilton, B., Lloyd, M. and Pannell, D.J. 2001, Salinity: A New Balance, The report of the Salinity Taskforce established to review salinity management in Western Australia, Perth.
George, R., Clarke, C., Hatton, T., Reggiani, P., Herbert, A., Ruprecht, J., Bowman, S. and Keighery, G. (1999). ‘The effect of recharge management on the extent of dryland salinity, flood risk and biodiversity in Western Australia. Preliminary computer modelling, assessment and financial analysis’, Unpublished report to State Salinity Council of Western Australia.
John, M. (2002). PUR$L 2002, Economics of salinity management in low rainfall environments. Productive Use and Rehabilitation of Saline Lands, 8th National Conference, Fremantle, 16-20 September 2002.
National Land and Water Resources Audit (2001). Australian Dryland Salinity Assessment 2000, National Land and Water Resources Audit, Canberra.
O’Connell, M. and Young, J. (2002). The role of saltland pastures in the farming system - a whole-farm bio-economic analysis, PUR$L 2002, Productive Use and Rehabilitation of Saline Lands, 8th National Conference, Fremantle, 16-20 September 2002.
Robertson, G. (2002). Saltland in Australia: Opportunities and goals for action. PUR$L 2002, Productive Use and Rehabilitation of Saline Lands, 8th National Conference, Fremantle, 16-20 September 2002.
Speed, R.J. and Simons, J.A.S. (1992). Deep Drains – A Case Study and Discussion, Division of Resource Management Technical Report 133. Department of Agriculture Western Australia, South Perth.
State Salinity Council (2000). Natural Resource Management in Western Australia: The Salinity Strategy, Government of Western Australia, Perth.
Winter, T., Pannell, D.J. and McCann, L. (2001). The economics of desalination and its potential application in Australia, SEA Working Paper 00/12, Agricultural and Resource Economics, University of Western Australia.
Citation: Pannell, D.J. (2002). National Economic and Policy Issues in the Productive Use of Salinised Resources, SEA Working Paper 02/05, School of Agricultural and Resource Economics, University of Western Australia, Crawley, Australia. http://www.general.uwa.edu.au/u/dpannell/dpap0205.htm
Presented at the 8th National Conference and Workshop on the Productive Use and Rehabilitation of Saline Land (PUR$L), Fremantle, 16-20 September 2002.
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