The $2-billion Ord Irrigation Scheme has been defended in the wake of a scathing report that found it had returned just 17 cents for every investment dollar.

The Australia Institute completed a cost-benefit analysis of the private and public money spent trying to develop a food bowl in the East Kimberley.

It found the project had performed poorly in relation to investment return and job creation.

But chairman of the Ord Irrigation Cooperative David Menzel defended the scheme, saying it was still delivering benefits to people in the region.

He also rejected the invested return figure of 17 cents in the dollar.

"I would be very surprised if it was that small," he said.

"The figure quoted was $2 billion and then suddenly a quarter of that was private investment. I think that there's a fairly grey area about where that is.

"There's no doubt the Ord has been an expensive project and I think a lot of the cause of that lays at the length of time it's taken to deliver, and there's a huge piece of infrastructure and some additional bits and it's never got to its design capacity.

"Obviously that's going to make it a lower than optimum return on the capital investment."

The scheme is said to be "still delivering benefits to people in the region". ( ABC Rural: Matt Brann )

The Ord Valley has often been touted as a potential food bowl for Australia, and for South-East Asia and China.

The Australia Institute's paper said that after more than 50 years and $2 billion, there were only 260 people working in agriculture.

The institute's Rod Campbell said this meant each job virtually cost more than $5 million, and he asserted that large-scale, capital-intensive irrigation projects should be avoided.

But Mr Menzel said the seasonal nature of the work needed to be taken into consideration.

"I think it's very hard to narrow it down to absolute jobs, whether they're the people that are employed by the farmers, whether they're talking full-time jobs or part-time jobs," he said.

"There's definitely more than 260 people out on the farms at this time of the year but then there are very few out there in the wet season.

"You can do a lot of funny things with figures."

Industry expansion underway

State Agriculture Minister Alannah MacTiernan said a $20-million output was expected across all the horticultural types in the area, and it was believed this could increase by a factor of five over the next five years.

Mr Menzel said the sector was undergoing a period of expansion.

"The community now is at the stage where we can consider secondary-type processing facilities and value-adding to some of the product, for instance there's talk of a small seeds cleaning and packaging plant being built fairly soon," he said.

"And there's talk of a cotton gin. We've just about got enough land to justify that, if everything else stacks up with the crop."

He said the sugar industry, which has been the subject of much media coverage in recent years, failed to take off because it was never economically viable and there was not enough land.

While cotton required around 10,000 hectares to justify it, sugar cane needed more than 20,000, plus investment in a mill.

He said there was a "reasonably diversified" economic base in the region, with mining, agriculture, tourism and services, and claimed the town Kununurra would not even exist without the Ord Irrigation Scheme.

Australia Institute report contained 'big lesson'

But Mr Menzel conceded that critics had made some valid points.

"The big learning lesson is that if you're going to build something of a scale, you need to build it and get it to that scale," he said.

"You can't have a 50-to-60-year time frame from when you install a dam to when you start to get the land available to utilise the water.

"It's taken such a long time, for a variety of reasons. You don't build an office block and then sell 10 per cent of it, you try and get the whole thing earning money as soon as possible."

Yet Mr Menzel called on critics to remember there was generally a low return on capital in agriculture and it required long-term commitments.