In a tiny pocket of farmland in outback Western Australia you’ll find the stamp of the southern hemisphere’s largest cotton farm, a record-holding wheat grower and a rich-listed cattle baron, all within a 50-kilometre radius.
Chequebooks in hand, they’ve all set their sights on Kununurra’s Ord Valley.
Skyrocketing land values here indicate farmers are heeding the warnings of climate scientists — or their financial advisors — and re-thinking where cotton is best grown.
Traditional cotton country
For the past century, the majority of Australian cotton has been grown along the upper Murray-Darling Basin system in southern Queensland and north-west NSW, and not without water-usage concerns.
It’s a drought-prone part of the nation, a fact weighing heavily on local farmers as many chose not to plant a winter crop due to this year’s lack of rainfall.
But when the rain does fall, the productivity of the soil makes it some of the most expensive in the country.
“Around the border rivers system we are talking anywhere between $25,000 to $30,000 per irrigated hectare when you take into account water licences,” Darling Downs-based property valuer Bart Bowen says.
“And there is that slow and steady strengthening trend, with some market drivers from commercial and industrial purchases, pushing up water values.”
Farmland without the access to irrigation water is also highly valuable at about $13,000 per hectare.
Yet some of the region’s largest farmers are choosing to part with their property here in favour of the Ord Valley, in WA’s remote Kimberley.
The reason? Water.
A resource in abundance
While irrigated farmers in NSW and Queensland rely heavily on river levels being above a certain point to pump water onto their crops, the Ord Valley works very differently.
That’s because the Ord River Irrigation Scheme is fed by Lake Argyle, the largest water storage facility in mainland Australia, holding more than 20 times more water than Sydney Harbour.
It means farmers in the region have access to 17 megalitres of water per hectare per year, 95 per cent of the time.
For Bart Bowen, who’s used to seeing cotton farmers in eastern Australia irrigate with only 5 megalitres to the hectare, it’s an astounding figure.
“Seventeen megs [per year, included in the sale of the land] is pretty hard to walk away from,” he says.
“That’s the power of water to support cropping, and that’s at a scale that’s difficult to access or even find on the market [in eastern Australia], let alone have the cash to buy.”
Land values more than double
In the past five years, Kimberley valuer Frank Peacocke has seen plenty of new faces looking for land in the Ord Valley.
“There’s been an influx of buyers from NSW and Queensland, which has put a bit of competitive tension into the market,” Mr Peacocke says.
In 2018, blocks of 200 hectares were selling for roughly $9,000 per hectare, now that figure is closer to $19,000.
It’s a price the likes of cattle baron Sterling Buntine and wheat king Ron Greentree are willing to pay, as proven by their recent acquisitions of sandalwood plantations they plan to bulldoze in favour of irrigated crops.
“There’s a risk in what it’s going to cost to remove that sandalwood, but you’ve got a reasonable idea that the country is going to perform well when it’s gone, and you’ve definitely got the water,” Mr Peacocke says.
“The water aspect reduces the risk, particularly for those blokes coming from the east who don’t have that luxury.”
Climate researchers hopeful
The decisions behind growing certain crops in certain areas is something Marcus Randall studies at length.
“Our research shows, within the next 50 or 60 years, given that it will be hotter and drier and water availability will become more scarce, we should rethink how much of crops like cotton and canola we grow,” Professor Randall, a Bond University researcher, says.
But when he heard that broadacre farmers in the eastern states were buying land to grow cotton in the Ord, he was hopeful.
“I think that’s potentially a very sensible idea,” he says.
“The thing is that climate change is a reality and adaptation for water-hungry crops like crop like cotton is incredibly essential.
“And looking at [a place] where there is better water availability, while still having very similar conditions, is a good thing to consider, and might actually yield better results into the future.”
Additional market competition
Getting an industry running in the remote Kimberley requires years of perseverance — including absorbing potentially crippling losses — from those at the forefront.
These include local farmers who began growing cotton in the Ord seven years ago and have been influential in securing a Kununurra cotton processing gin to make the crop profitable.
But, with only 28,000 hectares of land currently available for use in the Ord River Irrigation Area, the room for expansion is extremely limited.
It’s part of the reason 517 hectares of Quintis sandalwood plantation recently sold privately to Ron Greentree, a large-scale grain grower from north-west NSW, for the impressive sum of $7.6 million.
Fritz Bolten grows cotton on the neighbouring block and didn’t even know the Quintis land was for sale.
“I’d been talking with Quintis for 20 years and had expressed a desire to have an option to buy that block,” Mr Bolten says.
“It certainly makes it hard for little businesses like ours to expand.”
An opportunity for traditional owners?
Traditional owner group MG Corporation, which represents the Miriwoong and Gajirrabeng people in the region, owns close to 800 hectares of farmland in the Ord Valley.
Currently one block of that land is yet to be developed, while 240 hectares is leased to southern Queensland cotton giant Cubbie Farming in what the company refers to as a “joint venture”.
“Probably 99 per cent of it is the Cubbie side of things, so having their person on the ground doing what he’s doing,” MG Corporation CEO Lawford Benning says.
But Mr Benning wants to see native title holders more involved in the cotton grown on their land.
“We need to really apply ourselves to this model differently, and really get involved with this whole crop of cotton, understanding the soil, understanding the water, understanding the planting.
“We need more jobs out of it, more understanding of the business as a whole, a more hands-on approach.”
The lease agreement between MG Corporation and Cubbie Farming is to be reassessed at the completion of this year’s cotton harvest only weeks away.
Cubbie Farming declined to comment.
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