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Agriculture, Fisheries and Forestry in the Outback region of the Northern Territory, 2015

Research by the Australian Bureau of Agriculturaland Resource Economics and Sciences

About my region 15.48April 2015

Agriculture, Fisheries and Forestry in the Outback region of the Northern Territory, 2015 ABARES

© Commonwealth of Australia 2015

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ABARES 2015, Agriculture, Fisheries and Forestry in the Outback region of the Northern Territory, 2015, About my region 15.48, Canberra, April. CC BY 3.0.

ISBN 978-1-74323-092-3ABARES project 43009

Internet

Agriculture, Fisheries and Forestry in the Outback region of the Northern Territory 2015 is available at agriculture.gov.au/abares.

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Postal address GPO Box 858 Canberra ACT 2601Switchboard +61 2 6272 3933Facsimile +61 2 6272 2001Email [email protected] agriculture.gov.au/abares

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The Australian Government acting through the Department of Agriculture, represented by the Australian Bureau of Agricultural and Resource Economics and Sciences, has exercised due care and skill in preparing and compiling the information and data in this publication. Notwithstanding, the Department of Agriculture, ABARES, its employees and advisers disclaim all liability, including for negligence and for any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying upon information or data in this publication to the maximum extent permitted by law.

Acknowledgements

ABARES relies on the voluntary cooperation of farmers participating in the annual Australian Agricultural and Grazing Industries Survey, Australian Dairy Industry Survey, and Australian Vegetable Growing Farms Survey to provide data used in the preparation of this report. Without their help, these surveys would not be possible. ABARES farm survey staff collected most of the information presented in this report through on-farm interviews with farmers.

This regional profile was updated by Therese Thompson, Peter Martin,Timothy Connolly, Lucy Randall, Kasia Mazur and Sharan Singh.

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Contents1 Regional overview.................................................................................................................................. 1

Employment.............................................................................................................................................. 22 Agriculture sector................................................................................................................................... 4

Value of agricultural production......................................................................................................4Number and type of farms.................................................................................................................. 4Farm financial performance—Northern Territory..................................................................6

3 Fisheries sector..................................................................................................................................... 10

4 Forestry sector.......................................................................................................................................12

References........................................................................................................................................................... 13

TablesTable 1 Number of farms, by industry classification, 2012–13......................................................5

Table 2 Financial performance, Northern Territory beef industry, 2012–13 to 2014–15, average per farm..................................................................................................................................... 8

Table 3 Farm cash income of Northern Territory broadacre farms, by region, 2013–14 to 2014–15, average per farm.................................................................................................................9

FiguresFigure 1 Employment profile, Northern Territory – Outback region, November 2014......3

Figure 2 Value of agricultural production, Northern Territory – Outback region, 2012–13......................................................................................................................................................................... 4

Figure 3 Distribution of farms by estimated value of agricultural operations, Northern Territory – Outback region, 2012–13............................................................................................5

Figure 4 Real farm cash income, beef industry, average per farm................................................7

Figure 5 Farm cash income Northern Territory beef industry farms with greater than 10000 head of cattle, average per farm.........................................................................................7

Figure 6 Farm cash income Northern Territory beef industry farms with less than 10000 head of cattle, average per farm.........................................................................................8

Figure 7 Area of native forest, by tenure...............................................................................................12

MapsMap 1 Broad agricultural land use of the Northern Territory – Outback region...................1

Map 2 Agricultural industries of the Northern Territory – Outback region.............................2

Map 3 ABARES Australian broadacre zones and regions.................................................................9


1 Regional overviewThe Northern Territory – Outback region covers the whole of the Northern Territory excluding the Darwin greater capital city region. It includes the towns of Alice Springs and Katherine (Map 1). The region comprises the twelve local government areas of Alice Springs, Barkly, Belyuen, Central Desert, Coomalie, East Arnhem, Katherine, MacDonnell, Roper Gulf, Tiwi Islands, Victoria-Daly and West Arnhem. The region covers a total area of around 1 345 000 square kilometres or 99.7 per cent of the Northern Territory’s total area and is home to approximately 89 400 people (ABS 2011).

Agricultural land in the Northern Territory – Outback region occupies 670 180 square kilometres, or 50 per cent of the region. Areas classified as conservation and natural environments (nature conservation, protected areas and minimal use) occupy 658 850 square kilometres, or 49 per cent of the region. The most common land use by area is grazing natural vegetation, which occupies 670 02q square kilometres or 50 per cent of the Northern Territory – Outback region.

Map 1 Broad agricultural land use of the Northern Territory – Outback region

Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)

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Map 2 Agricultural industries of the Northern Territory – Outback region

Source: Catchment scale land use of Australia – update March 2014 (ABARES, 2014)

EmploymentAustralian Bureau of Statistics (ABS) data from the 2014 Labour Force Survey indicate that around 53 500 people were employed in the Northern Territory – Outback region. The Northern Territory – Outback region accounts for 40 per cent of total employment in the Northern Territory and 40 per cent of all people employed in the Northern Territory’s agriculture, forestry and fishing sector.

Public administration and safety was the largest employment sector in the region, with 10 000 people (Figure 1), followed by health care and social assistance with 8100 people and education and training, and retail trade with 4300 people. Other important employment sectors in the region were construction (3900 people), construction (3700 people) and other services (3300 people). The agriculture, forestry and fishing sector employed 800 people, representing 1 per cent of the region’s workforce.

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Figure 1 Employment profile, Northern Territory – Outback region, November 2014

- 5 10 15

Financial and Insurance ServicesInformation Media and Telecommunications

Agriculture, Forestry and FishingWholesale Trade

Rental, Hiring and Real Estate ServicesElectricity, Gas, Water and Waste Services

ManufacturingArts and Recreation Services

Administrative and Support ServicesTransport, Postal and Warehousing

Professional, Scientific and Technical ServicesAccommodation and Food Services

MiningOther Services

ConstructionEducation and Training

Retail TradeHealth Care and Social AssistancePublic Administration and Safety

Employed total ('000 )

Note: Annual average of the preceding 4 quarters.Source: Australian Bureau of Statistics, cat. no. 6291.0, Labour Force, Australia

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2 Agriculture sectorValue of agricultural productionIn 2012–13, the gross value of agricultural production (GVAP) in the Northern Territory – Outback region was $397 million, which was 83 per cent of the total gross value of agricultural production in the Northern Territory ($479 million). This is the most recent year for which ABS data are available.

The Northern Territory – Outback region has an important agricultural sector, dominated by the cattle industry. In 2012–13, cattle and calves contributed 80 per cent ($318 million) to the value of agricultural production in the region. Melons accounted for 10 per cent ($41 million), mangoes ($16 million) and hay ($9 million).

Figure 2 Value of agricultural production, Northern Territory – Outback region, 2012–13

$m 50 100 150 200 250 300 350

Other

Hay

Managoes

Melons

Cattle and calves

Source: Australian Bureau of Statistics, cat. no. 7503.0, Value of agricultural commodities produced, Australia

Number and type of farmsABS data indicate that in 2012–13 there were 288 farms in the Northern Territory - Outback region with an estimated value of agricultural operations of more than $5000 (Table 1). The region contains 62 per cent of all farm businesses in the Northern Territory.

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Table 1 Number of farms, by industry classification, 2012–13Industry Classification Northern Territory - Outback

regionNorthern Territory

no. % no. %

Beef Cattle 172 60 176 38

Fruit and nuts 32 11 127 27

Vegetable 25 9 44 9

Other Crop growing 9 3 14 3

Other livestock 6 2 11 2

Other 44 15 91 20

Total Agriculture 288 100 463 100

Note: Estimated value of agricultural operations greater than $5000.Source: Australian Bureau of Statistics

Farms are classified in Table 1 according to the activities that generate most of their value of production. Beef cattle farms (172 farms) were the most common, accounting for 60 per cent of all farms in the Northern Territory-Outback region, and 98 per cent of all beef cattle farms in the Northern Territory.

There is a large percentage of small farms in the region in terms of their value of agricultural output. Estimated value of agricultural operations (EVAO) is a measure of the value of production from farms and a measure of their business size. Around 48 per cent of farms in the Northern Territory-Outback region had an EVAO of less than $350 000 (Figure 3). These farms accounted for only 5 per cent of the total value of agricultural operations in 2012–13. In comparison, 29 per cent of farms in the region had an EVAO of more than $1 million and accounted for an estimated 79 per cent of the total value of agricultural operations in the region in 2012–13.

Figure 3 Distribution of farms by estimated value of agricultural operations, Northern Territory – Outback region, 2012–13

%

10

20

30

40

50

60

70

80

< $50k $50k to $150k $150k to $350k $350k to $500k $500k to $1 m > $1 m

Share of farms Share of value of agricultural operations

Source: Australian Bureau of Statistics

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Farm financial performance—Northern TerritoryEach year, ABARES interviews Australian broadacre producers as part of its annual survey program. Broadacre industries covered in this survey include the grains, grains–livestock, sheep, beef and sheep–beef industries. The information collected provides a basis for analysing the current financial position of farms in these industries and expected changes in the short term. This paper uses data from the ABARES Australian agricultural and grazing industries survey (AAGIS) to provide estimates of financial performance of Northern Territory beef industry farm businesses (Box 1).

Box 1 DefinitionsMajor financial performance indicators Total cash receipts: total revenues received by the business during the financial year. Total cash costs: payments made by the business for materials and services and for permanent and casual hired

labour (excluding owner manager, partner and family labour). Farm cash income: total cash receipts – total cash costs Farm business profit: farm cash income + changes in trading stocks – depreciation – imputed labour costs Profit at full equity: return produced by all the resources used in the business, farm business profit + rent +

interest + finance lease payments – depreciation on leased items Rate of return: return to all capital used, profit at full equity * 100 / total opening capital Equity ratio: Farm capital minus farm debt expressed as a percentage of farm capital Beef: farms mainly engaged in running beef cattle.

Performance of beef industry farms— Northern TerritoryMany farm businesses in the upper Northern Territory derive a large share of their total cash receipts from selling cattle for live export, particularly to Indonesia. Numbers of cattle sold for live export declined between 2009–10 and 2012–13, before rebounding strongly in 2013–14. They are expected to remain high in 2014–15. As a result of the expansion of the live export trade in 2013–14 and 2014–15, cattle for this market are now also being sourced from a much expanded area of northern Australia.

In 2013–14 farm cash income increased to average $382 100 a farm (Figure 4 and Table 2). While turn-off of cattle increased slightly, average prices received were lower than in 2012–13. Total cash receipts declined slightly as a result, but total farm cash costs declined by much more—mainly as a result of reduced purchases of cattle and transfer of cattle on to Northern Territory properties by farm businesses with properties interstate.

In 2014–15 total farm cash receipts are expected to rise by around 30 per cent, resulting from an estimated increase in turn-off of cattle and higher average prices received per head sold. Average total cash costs are projected to increase by around 20 per cent, partly offsetting higher farm receipts—with higher expenditure on fodder, hired labour and beef cattle purchases. With increased cattle turn-off, expenditure on freight and marketing is also expected to rise. The high turn-off is projected to result in a reduction in herd size.

Farm cash income is projected to increase in all Northern Territory regions in 2014–15, with the largest increases in the Victoria River District–Katherine and the Top End (Table 3).

Overall, Northern Territory farm cash incomes are projected to increase to average $680 000 a farm in 2014–15, well above the 10-year average to 2013–14 of $312 000 a farm.

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Figure 4 Real farm cash income, beef industry, average per farm

–500

2014–15 $’000

500

1000

1500

Australia Northern Territory

p Preliminary estimate. y Provisional estimate.Source: ABARES Australian Agricultural and Grazing Industries Survey

The average financial performance of beef industry farms in the Northern Territory is heavily influenced by the performance of very large herd size, mostly corporate farms. These farms are found in all Northern Territory Regions, but predominantly in the Barkly and Victoria River-Katherine districts. These businesses dominate cattle turn-off and financial performance estimates for the Northern Territory and typically have financial performance that is well above the average for other smaller herd size businesses in the region as well as performance that is very variable from year to year.

Farm cash income for businesses with greater than 10 000 head of cattle averaged $1.2 million over the 10 years ending 2013–14 with substantial variability between years (Figure 5).

Figure 5 Farm cash income Northern Territory beef industry farms with greater than 10000 head of cattle, average per farm

–2000

2014–15 $’000

2000

4000

6000

7



In contrast, farm cash income for businesses with less than 10 000 head of beef cattle averaged just $71 000 per farm over the same period and has generally trended downwards since 2004–05 (Figure 6).

Figure 6 Farm cash income Northern Territory beef industry farms with less than 10000 head of cattle, average per farm

–200

–100

2014–15 $’000

100

200

300


Table 2 Financial performance, Northern Territory beef industry, 2012–13 to 2014–15, average per farm

Performance indicator units 2012–13 2013–14p RSE 2014–15yTotal cash receipts $ 1 754 990 1 580 900 (11) 2 067 000Total cash costs $ 1 390 010 1 198 800 (11) 1 387 000Farm cash income $ 364 980 382 100 (24) 680 000Farms with negative farm cash income % 63 54 (20) 17Farm business profit $ 524 360 429 200 (18) 422 000Profit at full equity excluding capital appreciation $ 598 120 500 200 (15) 492 000Farm capital at 30 June a $ 16 358 900 17 825 700 (8) naFarm debt at 30 June b $ 1 074 970 1 070 200 (24) 980 000Equity ratio bd % 84 85 (4) naRate of return excluding capital appreciation e % 3.5 2.9 (14) 2.8Off-farm income of owner manager and spouse b $ 56 310 74 700 (43) na

a Excludes leased plant and equipment. b Average per responding farm. c Farm capital minus farm debt. d Equity expressed as a percentage of farm capital. e Rate of return to farm capital at 1 July. p Preliminary estimates. y Provisional estimates. na Not Available. Figures in parentheses are standard errors expressed as a percentage of the estimate providedSource: ABARES Australian Agricultural and Grazing Industries Survey

The average farm cash income of beef industry farms in 2013–14 and 2014–15 varies across regions, partly as a consequence of the differences in average herd size within the regions. Farm

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cash income in the Barkly region where large herd size farms predominate is estimated to have averaged $2.6 million in 2013–14 and is projected increase to $3.3 million 2014–15 (Table 3). Farm cash income is projected to increase in all regions, not just those traditionally most reliant on live cattle exports, such the Victoria River District-Katherine and Top End Darwin and the Gulf, but also the Alice Springs District which has low reliance on live cattle exports.

Table 3 Farm cash income of Northern Territory broadacre farms, by region, 2013–14 to 2014–15, average per farm

Regionunit

s 2013–14p RSE 2014–15y

711: NT Alice Springs District $ 117 300(122

) 242 000712: NT Barkly Tablelands $ 2 555 700 (19) 3 348 000

713: NT Victoria River District - Katherine $ –27 500(345

) 264 000

714: NT Top End Darwin and the Gulf $ 22 700(263

) 129 000p ABARES preliminary estimates. y ABARES provisional estimates. na Not available. Figures in parentheses are standard errors, expressed as a percentage of the estimate provided.Source: ABARES Australian Agricultural and Grazing Industries Survey

Map 3 ABARES Australian broadacre zones and regions

Note: Each region is identified by a unique code of three digits. The first digit identifies the state or territory, the second digit identifies the zone and the third digit identifies the region.Source: ABARES

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3 Fisheries sectorIn 2012–13 the gross value of the Northern Territory’s fisheries production (both aquaculture and wild-catch) was $58 million, an increase of 13 per cent ($7 million) from 2011–12. The Northern Territory contributed 2 per cent of the total value of Australian fisheries production in 2012–13. In value terms, the wild-catch sector accounted for 59 per cent ($34 million) of the territory’s total production and the aquaculture sector accounted for the remaining 41 per cent ($24 million).

The Northern Territory’s wild-catch fisheries sector provide a range of fisheries products with the highest contribution being from crabs (primarily mud crabs), which account for 19 per cent of the total value of wild-catch fisheries with a value of $6.4 million. Other important wild-catch fisheries products are gold band snapper (15 per cent; $5.1 million), mackerel (12 per cent; $4.1 million) and barramundi (11 per cent; $3.6 million) and. Over the last decade the value of the Northern Territory’s wild-catch fisheries products has decreased by 21 per cent to $34 million in 2012–13. The products for which the real value of production declined most over the past decade are shark and mackerel, falling by $7 million and $2.5 million respectively between 2002–03 and 2012–13. In 2012–13 the value of the Northern Territory’s aquaculture production is estimated to have increased by 39 per cent from $17 million in 2011–12 to $24 million in 2012–13.

The Commonwealth Northern Prawn Fishery was the most valuable fishery in the Northern Territory region, with a gross value of production in 2012–13 of $71 million, across the entire fishery. In 2012–13, the gross value of production for the Northern Prawn Fishery increased by 10 per cent due to a 38 per cent increase in average prices and 55 per cent increase in catches of tiger prawns but despite 38 per cent decrease in catches of banana prawns. Darwin is a major landing site for the Northern Prawn Fishery.

In 2012–13, the Northern Territory’s seafood product exports were valued at around $0.1 million. The main export products include live and fresh, chilled or frozen fish, and crabs with Japan and Hong Kong being the main export markets. The main non-edible fisheries product produced for the export market in the Northern Territory were pearls.

It is estimated that Northern Territory residents and visitors spend nearly $51 million annually on recreational fishing, with the purchase of vessels and vehicles and their associated running costs making up the bulk of the expenditure (West et. al. 2012). According to the most recent survey of recreational fishing activity in the Northern Territory (West et. al. 2012), the main target fish species are barramundi, followed by golden snapper, small bait fish, catfish, saddletail and crimson snapper, and mullet. Mud crabs dominates the crustacean catch, followed by cherabin, the giant freshwater prawn.

The Northern Territory also has a significant indigenous customary fish sector. The 2000–01 National Recreational and Indigenous Fishing Survey (NRIFS) aimed to better understand the level of fishing undertaken by the Indigenous fishing sector (Henry and Lyle 2003). The survey collected fisheries catch statistics from Indigenous people aged five years and older, living in coastal communities across the north of Australia, from Broome in Western Australia to Cairns in Queensland (excluding those living in the Torres Strait). The survey showed that an estimated 37 000 Indigenous people living in the north of Australia fished at least once during the survey year. This was equivalent to 92 per cent of the Indigenous population in the region.

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The survey indicated that Indigenous fishers in northern Australia harvested approximately 900 000 finfish, 1 million molluscs, 660 000 prawns and yabbies, 180 000 crabs and rock lobsters and smaller numbers of other species during 2000–01. The most prominent finfish species groups were mullet, catfish, tropical snapper, bream and barramundi. The most prominent non-finfish species groups were mussels, freshwater prawn, mud crabs, prawns and oysters.

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Leasehold forest (5 169 600 ha—34.4%)

Multiple-use public forest (0 ha—0.0%)

Nature conservation reserve (1600 ha—0.01%)

Other Crown land (254 500 ha—1.7%)

Private land (including Indigenous) (9 571 000 ha—63.7%)

Unresolved tenure (25 700 ha—0.2%)


4 Forestry sectorIn 2010–11, the total plantation area in the Outback region of the Northern Territory was approximately 15 900 hectares,hardwood . The main hardwood species planted are mangium (Acacia mangium) and African mahogany (Khaya senegalensis).

In 2011, there were approximately 15.0 million hectares of native forests in the Outback region of the Northern Territory, comprised mainly of Eucalypt medium woodland (5.8 million hectares), Eucalypt medium open (5.0 million hectares), Acacia (975 500 hectares), Melaleuca (891 500 hectares), Eucalypt low woodland (855 300 hectares), Eucalypt low open (472 700 hectares), Mangrove (305 600 hectares) and Rainforest (251 000 hectares) forest types. Approximately 9.6 million hectares of the native forests are privately owned and 5.2 million hectares are leased forests (Figure 7). There are no major timber processing industries in the Outback region of the Northern Territory.

Figure 7 Area of native forest, by tenure

Source: ABARES Australia’s State of the Forests Report 2013

Total sales and service income in the Northern Territory’s forest and wood product industry is estimated at approximately $69 million in 2010–11. Sales and service income from the wood product industry in 2010-11 was valued at approximately $45 million, and $24 million was derived from paper and paper product sales. In 2012–13, wood products generated $22 million, but data for income from paper and paper products were not available for this period. Woodchips are not exported from the Northern Territory. In 2011, the Northern Territory forestry sector employed 244 people (0.3 per cent of the total employed workforce in the Northern Territory) compared with 197 (0.3 per cent) in 2006 (number of people employed includes forestry support services and timber wholesaling).

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ReferencesABS 2011, Census of Population and Housing, Australian Bureau of Statistics, Canberra.

ABS 2014a, Agricultural Commodities, Australia, 2012–2013, cat. no. 7121.0, Australian Bureau Statistics, Canberra.

ABS 2014b, Labour Force, Australia, Detailed, Quarterly, Nov 2014, cat. no. 6291.0.55.003, Australian Bureau Statistics, Canberra.

ABS 2014c, Value of Agricultural Commodities Produced, Australia, 2012–13, cat. no. 7503.0, Australian Bureau Statistics, Canberra.

Australian Bureau of Agricultural and Resource Economics-Bureau of Rural Sciences 2010, Land use of Australia 2005-06, Version 4, Department of Agriculture, Fisheries and Forestry, Canberra.

ABARES 2014, Catchment scale land use of Australia – update March 2014. Department of Agriculture. http://data.daff.gov.au/anrdl/metadata_files/pb_luausg9abll20140506_11a.xml

Australian Bureau of Agricultural and Resource Economics and Sciences 2014, Australian forest and wood products statistics: March and June quarters 2014, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

Henry G.W. and Lyle J.M. 2003, The National Recreational and Indigenous Fishing Survey, FRDC Project No. 99/158.

Montreal Process Implementation Group for Australia and National Forest Inventory Steering Committee 2013, Australia’s State of the Forests Report 2013, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

West, L. D., Lyle, J. M., Matthews, S. R., Stark, K. E. and Steffe, A. S. (2012). Survey of Recreational Fishing in the Northern Territory, 2009–10. Northern Territory Government, Australia. Fishery Report No. 109, available at http://www.nt.gov.au/d/Content/File/p/Fish_Rep/FR109.pdf.

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http://data.daff.gov.au/anrdl/metadata_files/pb_luausg9abll20140506_11a.xml

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Regional overview - Australian Natural Resources Data Librarydata.daff.gov.au/data/warehouse/9aa/regionalReports/... · Web viewIn 2013–14 farm cash income increased to average