In a recent opinion piece, the minister for resources and northern Australia, Senator Matt Canavan, blamed opposition to massive irrigation schemes on greenies who “often have not set foot north of Gympie” and perpetrate “a myth that we can’t grow food in our north”.

As a graduate of the University of Queensland School of Economics and former director at the Productivity Commission, Senator Canavan might perhaps have directed his vitriol closer to home. For nearly 60 years, economists, notably including those at both UQ and the Productivity Commission, have been the most consistent and determined critics of the idea that expanded irrigation is the solution to the problems of agriculture in Australia, and particularly in northern Australia.

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Agricultural economists recognised long ago that the environment in northern Australia was not good for irrigated agriculture. The converse recognition, that irrigation schemes are often disastrous for the environment, came much later.

The struggle began in the early 1960s, when Bruce Davidson, who was to become one of Australia’s most respected agricultural economists, resigned from CSIRO in protest at the slipshod economic analysis being undertaken in support of the proposed Ord River scheme. It was obvious that, even if the projections on crop yield were met, the project would be a boondoggle, with no prospect of an economic return on the public funds invested. Transport costs alone were crippling.

Despite the criticisms of agricultural economists, including the Bureau of Agricultural Economics, the project went ahead, with disastrous results. Insects destroyed the first rice and cotton crops, and the returns on those crops that survived were so low that most farmers abandoned their land.

Meanwhile, the extraction of water from the Murray-Darling system grew apace, to the point where more than the median annual flow was allocated to extractive uses. A variety of environmental problems, including salinity and toxic algal blooms began to draw public attention.

The Ord disaster, and increasing awareness of the environmental impacts of irrigation, turned the tide of debate for a while. The pace of dam construction slowed down after the 1970s and extraction of water from the Murray–Darling system was capped in the 1990s. The “Water for the Future” plan, introduced under the Rudd government, allocated substantial sums to buy back overallocated water from farmers who could invest the proceeds more productively in their enterprises.

But those who do not remember history are condemned to repeat it. In a triumph of hope over experience, the Western Australian government pushed forward a second stage of the Ord River scheme in 2010. The result was another disaster.

A scathing report by the WA auditor general noted cost overruns and the failure of proposals to develop small-scale farming and sustainable Indigenous employment, concluding, in the understated fashion of such reports that:

The sustained social and economic benefits underpinning the decision to proceed with this $529 million investment have not been realised.

Undeterred, the federal and WA governments pushed forward the idea of a stage three, but a combination of Indigenous opposition and economic absurdity seem to have killed this idea for the moment.

But the mirage of irrigation-based development can never be dispelled. Senator Canavan’s spray was prompted by a report from CSIRO, making the case for a string of new dams, notably including one on the Fitzroy river in WA, a river that has been listed as National Heritage for its outstanding environmental and Indigenous cultural values. Headline reports on CSIRO focused on the potential for agricultural output and job creation, but said little about the economic viability of the proposal.

CSIRO assembled a huge team to produce this report, but, as far as I can tell, the team did not include any agricultural economists, let alone specialists in the economics of irrigation. As a result, the analysis included some serious errors, such as reliance on the discredited “regional input-output multiplier” technique, which routinely overstates employment benefits. Using this magical technique, CSIRO concludes that the Fitzroy could support more than 5,000 jobs. By contrast, the billion dollars or more spent on the Ord over the years currently supports around 200 jobs.

It’s hard to make a silk purse out of a sow’s ear, and the report quietly concedes that none of these projects are likely to yield economic benefits commensurate with their costs. The key conclusion of the Fitzroy report (tucked away on in a dot point on p xvi) is that “farm revenue from broadacre agriculture is unlikely to cover the cost of infrastructure for an irrigation scheme under current farming systems”.

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The report trots out the usual suggestions to make an uneconomic proposal look good, including value-adding, a so-far hypothetical plan for double cropping and the inevitable regional multipliers. Serious input from real experts would have refuted these suggestions.

Meanwhile, in the Murray-Darling, the decision by Senator Canavan’s immediate previous employer, Barnaby Joyce, to kill off water buybacks, is having the predictably disastrous effects. Canavan’s earlier employer, the Productivity Commission, has released a report noting that the result has been to more than double the cost of water savings. The commission concluded that the current progress on implementing water efficiency measures “gives little confidence” they would be completed by 2024, as planned.

It may give Senator Canavan a warm glow to suggest that avocado-eating urbanites are the only obstacle to a massive expansion in irrigated agriculture. His real enemy, however, is economic reality.