Mowanjum Irrigation Business Plan 8 PDF

Mowanjum Irrigation Business Plan Commercial in Confidence
Page 1 of 32

Mowanjum Irrigation
Business Plan for Irrigation Development for
intensification of Mowanjums Pastoral Lease
Version 1

13 May 2014

Prepared for Mowanjum Aboriginal Corporation
by Richard Smith, BSc(Agric), Dip Agric Econ, Ph. D.
(richard.c.g.smith@gmail.com, 08 9384 3308)

Mowanjum Pastoral
Mowanjum Irrigation
Page 2 of 32

Methodology and Assumptions
This first version of the Business Plan was developed for the Mowanjum Aboriginal
Corporation (MAC) in response to an initiative of the Department of Regional
Development (DRD) to sponsor the development of intensive agriculture in the Derby
area.
Department of Water Resource will bear the initial cost of developing the ground water
resources to support irrigated agriculture based on centre pivot irrigation technology
DRD will fund the first centre pivot of 38ha at Mowanjum to evaluate the economic
potential of irrigated perennial tropical pasture to fatten weaners for the live export
market.
Gross Margin Analysis of fattening cattle for live export from irrigated fodder crops or
pasture will be used to assess the economic potential for MAC to improve its economic
independence.
Gross Margin (gross income less direct production costs) is the amount generated will be
used to determine the ability of the irrigation enterprise to contribute to the overhead or
fixed costs.
Growth of perennial pasture based on intensively irrigated and fertilised perennial
tropical grass will be the most cost efficient irrigation enterprise for Mowanjum.
The most efficient utilisation of the pasture will be by grazing of 200kg steers for
fattening to a market weight of 300kg along with the strategic cutting of the pasture for
hay or baled silage by a contractor for feeding to the breeding herd to improve their
calving percentage, thereby producing more weaners for fattening.
The development will improve the social and economic conditions of the indigenous
people through employment and stimulate education of younger members for the jobs
that will become available from the regional development of irrigation.
Irrigation, Agronomic and Economic Consultants will be necessary to ensure a high level
of technical and economic efficiency. Six monthly acquittal reporting of Government
fund contributed to the project will be critical.
Water and nutrients will be the major limiting factors to pasture growth and irrigation
with high nitrogen input will be required year round to achieve optimum production.
The irrigated pasture will be harvested by strip grazing and baling to achieve 80%
utilization of the grown feed.
Fattening of weaners to optimum weight for the live cattle trade is limited to the 3-4
month wet season and is severely limited during the 8-9 month dry season. However it is
anticipated that irrigation and nitrogen fertilisation will be required year round.
Nutritive value of pasture is limited throughout the year due to limited protein content.
This limitation will be overcome through application of liquid nitrogen through the
irrigation system to both maximise pasture growth but also to boost protein content.
Frequent grazing or cutting to maintain the perennial pasture in the vegetative growth
stage will be important. Digestibility and protein content declines rapidly when pastures
move into the flowering stage o phonological development.
Risk will be minimised by maximising cash flow from the fattening of cattle or cutting
hay to increase the calving percentage.
Many of the assumptions have yet to be verified and further updates of this Buisness Plan
will be needed as further information comes to hand.

Page 3 of 32
TABLE OF CONTENTS
Executive Summary .............................................................................................................................................. 5
1 Background ................................................................................................................................................ 7
1.1 Mowanjum .............................................................................................................................................. 7
1.2 Property Location ................................................................................................................................ 8
1.3 Irrigation Assessment ........................................................................................................................ 9
2 Proposal .................................................................................................................................................... 12
2.1 Mission Statement, Vision and Objectives .............................................................................. 12
2.2 Irrigation Infrastructure ................................................................................................................ 12
2.3 Establish a 38 hectare Centre Pivot ........................................................................................... 12
2.4 Costs of implementing the proposed Irrigation System .................................................... 14
2.5 Capital Cost of Site Works (GWW) ............................................................................................. 14
2.6 Research, Development and Advisory Costs (GWW).......................................................... 14
2.7 Direct Production and Leasing Costs ........................................................................................ 15
3 Sources of Funding ............................................................................................................................... 16
3.2 Stakeholders ....................................................................................................................................... 16
3.3 Business Structure & Management ........................................................................................ 17
4 SWOT Analysis ...................................................................................................................................... 21
5 Competitive Analysis .......................................................................................................................... 23
5.1 Competitors ....................................................................................................................................... 23
5.2 Competitive Advantages ............................................................................................................. 23
6 Research Results for Irrigated Beef Production ........................................................................ 24
7 Modelling the Mowanjum Irrigation Enterprise ....................................................................... 26
7.1 Assumptions ....................................................................................................................................... 26
7.2 Meteorological Data and estimate of Soil Water Deficit .................................................... 27
7.3 Herbage to Liveweight Gain Conversion ................................................................................. 28
7.4 Irrigation Scheduling ....................................................................................................................... 28
7.5 Summary of Costs from Section 2 ............................................................................................... 29
7.6 Financial Sensitivity Analysis ....................................................................................................... 30
7.7 Discussion of Economics of Mowanjum Irrigation Enterprise ....................................... 31
8 References ................................................................................................................................................ 32
TABLE OF TABLES
Table 1: Summary of Costs for establishing and annual running a 38ha Centre Pivot .............. 5
Table 2: Economics of the first centre pivot for optimal conditions ................................................. 6
Table 3: Economics of the first centre pivot for sub-optimal conditions ........................................ 6
Table 4: Capital Cost of Establishing the First Centre Pivot .............................................................. 14
Page 4 of 32
Table 5: Research, Development and Advisory Costs .......................................................................... 14
Table 6: Direct Production Costs .................................................................................................................. 15
Table 7: Leasing Costs for Pivot, Pump and Power ............................................................................... 15
Table 8: Training Plan ...................................................................................................................................... 20
Table 8: Model Assumptions .......................................................................................................................... 26
Table 9: Meteorological Data ......................................................................................................................... 27
Table 10: Herbage to Liveweight Gain (at $2.2/kg) ............................................................................. 28
Table 11: Irrigation Scheduling Requirements ...................................................................................... 28
Table 12: Sensitivity to variations in price of LWG, for optimal feed conversion efficiency and
pasture production ............................................................................................................................................ 30
Table 13: Sensitivity to variations in price of LWG, for sub-optimal feed conversion efficiency
and pasture production ................................................................................................................................... 30
TABLE OF FIGURES
Figure 1: Mowanjum Station Location .......................................................................................................... 8
Figure 2: Hay and Silage Making .................................................................................................................. 10
Figure 3: Mowanjum Station .......................................................................................................................... 11
Figure 4 Diagram of First Centre Pivot ...................................................................................................... 12
Figure 5: Overall Centre Pivot Layout Design ......................................................................................... 13
Figure 6: Mowanjum Corporate Structure ............................................................................................... 19

Page 5 of 32
Executive Summary
The Mowanjum Aboriginal Corporation (MAC) holds a Pastoral lease over 55,000 hectares
of good quality grazing land situated just outside Derby in the West Kimberley. This lease,
underutilized for the last 40 years, is now in production following a $1m investment. The
current herd is 500 breeding cows, 350 weaners and 150 calves. Potential carrying capacity
is 3,000 breeders with only half of the lease developed with paddocks and watering points.
Therefore when fully developed the Mowanjums Pastoral lease could carry a 5,000 head
breeding herd.
Intensification of Mowanjums cattle enterprise by irrigation would enable Mowanjum
Pastoral Inc. to reach its potential carrying and fattening capacity. In so doing it would boost
the economy, training, and employment of local Indigenous people. Indigenous communities
with viable cattle enterprises progress better, socially and economically, than those without
(Shaw, 2012).
The objective is to fattening weaners year round for live export from their breeding herd.
The long term plan is for five Centre Pivots of 38 ha each providing from groundwater over
190 ha of irrigated land.
Summary of the estimated costs of establishing the first centre pivot of 38 hectares and
operating for the first year estimated by GGW to be:

Summary of Costs (from Section 2)
DIRECT PRODUCTION EXPENSES per year including Mowanjums labour cost of
$50,000 pa
329,200
LEASING COSTS FOR PIVOT, PUMP and POWER SOURCE per year
159,506
RESEARCH, DEVELOPMENT and ADVISORY COST per year 122,300
CAPITAL COST OF ESTABLISHING the FIRST 38ha CENTRE PIVOT
1,127,301
TOTAL COST in Year One
1,738,307

Estimated Cost of adding each additional centre pivot $382,046
Table 1: Summary of Costs for establishing and annual running a 38ha Centre Pivot

The economics of a single 38 ha centre pivot irrigation system was evaluated on the
assumption that 80% of irrigated pasture grown would be eaten by fattening steers of 200kg
weight growing to a weight of 300kg at a weight gain of 1.2kg/day. Two possible outcomes
were predicted for optimum conditions of 1) A Feed Conversion Efficiency of 1:7 from 36
tonnes/year of pasture production (GGW estimates) and suboptimal conditions of 2) A Feed
Conversion Efficiency of 1:14 or pasture production on only 18 tonnes/ha. Periodically
when steers are not available for fattening surplus grass will be baled as hay or silage by
contract to supplement the breeding herd to increase their calving percentage. It is assumed
that these calves or sale of the hay will produce an equivalent economic return to that from
fattening cattle.

Page 6 of 32
Production under Optimal Conditions GGW predictions
Feed Conversion Efficiency of 1:7 from Pasture Production of 36 tonnes/ha/year
Price/kg LWG $1.0/kg $1.5/kg $2.0/kg $2.5/kg $3.0/kg $3.5/kg
Gross Return 38ha pivot
$194,727 $292,090 $389,454 $486,817 $584,181 $681,544
Gross Margin (Gross
Return Direct Costs)
-$134,473 -$37,110 $60,254 $157,617 $254,981 $352,344
Gross Margin - Leasing
Costs
-$293,979 -$196,615 -$99,252 -$1,888 $95,475 $192,839
Gross Margin - R&D Cost
-$416,279 -$318,915 $221,552 $124,188 -$26,825 $70,539
Gross Margin - 20%
Capital Cost
-$641,739 -$544,376 $447,012 $349,649 $252,285 $154,922
Table 2: Economics of the first centre pivot for optimal conditions
Production under Sub-Optimal Condition 50% of GGW predictions
Feed Conversion Efficiency of 1:14 or Pasture Production of 18 tonnes/ha/year
Gross Return 38ha pivot $97,363 $146,045 $194,727 $243,409 $292,090 $340,772
Gross Margin (Gross
Return less Direct Costs)
-$231,837 -$183,155 $134,473 -$85,791 -$37,110 $11,572
Gross Margin less Leasing
Costs
-$391,342 -$342,661 $293,979 $245,297 $196,615 $147,934
Gross Margin less R,D&A
Costs
-$513,642 -$464,961 $416,279 $367,597 $318,915 $270,234
Gross Margin less 20%
Capital Cost
-$739,102 -$690,421 $641,739 $593,057 $544,376 $495,694
Table 3: Economics of the first centre pivot under sub-optimal conditions
Conclusions
Under optimum conditions Mowanjums Gross Return will only cover the direct costs of
production of $329,000 if liveweight cattle prices are above $2/kg (Table 1). To cover the
leasing cost would require that cattle prices to be above $3/kg.
Under sub-optimal conditions there would be no positive Gross Margin therefore achieving
the potential of this sub-tropical environment through state of the art agronomy, irrigation,
nutrient and grazing management is paramount for the success of this project.
The annual Research, Development and Advisory cost of $122,300 will yield up valuable technical
and economic data for future investors in such irrigation enterprises in the region. This cost has
traditionally been borne by Government for the public good. Government has traditionally made the
Intellectual Property gained freely available to potential investors. Therefore it is assumed that this
cost will be borne by the Government as part of their commitment to regional development in the
Derby West Kimberley Shire.
Page 7 of 32
1 Background
1.1 Mowanjum
The Mowanjum Community was established as a working pastoral station near Derby in the
mid-1950s by the Presbyterian Church as part of their Mission. This was a natural way to
respond to the needs of an Aboriginal community displaced from country. The community
has suffered significant dislocation similar to other Aboriginal communities in remote areas.
The aims of establishing Mowanjum Irrigation is to increase the benefits of their pastoral
lease by expanding the:
Fattening of weaners year-round for the live export market
Training of younger members of the community through building on a long and
successful tradition of their elders in the pastoral industry
To maximizes the benefits from their pastoral lease and overcome their welfare
dependence, alcohol, poor health and high incarceration and suicide rates.
To create a viable path to economic self-management at a low cost to government in
support of Aboriginal aspirations of sovereignty, management of land in their care
and economic independence.
Most MAC members reside in the Mowanjum Community. The community is composed of
the Ngarinyin, Worora and Wunambul clans who have no traditional ties to the Mowanjum
Irrigation lease are, but have family ties that extend north and east. Over 100 young people
in the community will benefit over the first 10 years from enhanced training and
employment opportunities provided by development of Mowanjums irrigation enterprise.
Mowanjum community is on Reserve R1326/1434 vested with the Aboriginal Lands Trust.
There are currently between 290-350 people living full-time in the Mowanjum community.
The actual figure changes according to the season (e.g., muster time, festive season,
ceremonial periods).
MAC was registered with the Office of Registrar of Aboriginal Corporations (ORAC) in 1981
under the Aboriginal and Torres Strait Islander Act 2006 (CATSI Act). MAC is made up of
members of family groups which live and work in the Mowanjum community. MAC has an
operating governing structure. All governance and financial details of MAC are internet
accessible (ORAC, 2012).
Mowanjum Aboriginal Corporation (MAC) controls various tracts of land, including a
pastoral lease, unencumbered freehold land, crown land grazing licence and reserve. The
majority of these various tracts have been amalgamated into the one pastoral lease. Cattle
were run by local indigenous people on Mowanjum property from the 1960s until the early
1980s when the mission era ended. Subsequently social problems developed associated with
unregulated access to alcohol, passive welfare and government policy failures. The
Mowanjum community is determined to reverse this trend by developing its human and non-
human assets.
Establishment of Mowanjum Irrigation as a commercially viable enterprise of MAC is central
to Mowanjums strategic plan to overcome its social problems by becoming an economically
self-sustaining community. MACs aspiration for Mowanjum Irrigation is to build the
business to provide training and employment as well as community development and
cultural opportunities for the people of Mowanjum. The irrigation enterprise will
significantly expand the productive capacity of Mowanjums pastoral lease enabling a
doubling of carrying capacity from 1,500 to 3,000 breeding cows and number of fattened
cattle from 1,000 to over 2,000 each year.
Page 8 of 32
Mowanjum Irrigation forms part of a portfolio of MAC businesses which include Derby
Workforce, Mowanjum Driving Academy, and the King Sound Gravel joint venture. Other
businesses such as fuel distribution and a Caravan Park with Service Station on Mowanjums
road frontage on the Derby-Broome road are being investigated with assistance of the
Indigenous Business Association.
1.1.1 Property Size
Mowanjums 55,000ha compares with a typical pastoral lease of 320,000ha (DAFWA, 2009).
Thus longer term profitability of Mowanjum Pastoral depends on intensification of its
production through use of irrigation.
The economic viability of this strategy has been verified by modelling and financial analysis
(section 7). The diversity of MACs income sources based on an expanding portfolio of
businesses, gives MAC the ability to withstand a downturn in the live cattle export industry.
Employing Russ Contracting provides the expertise and the economies of sub-contracting.
1.2 Property Location
Mowanjum Pastoral Lease 3114/1008 is located about 10 kilometres south of Derby, along
the main Derby road. As shown in Figure 1, the property is in the Shire of DerbyWest
Kimberley, within the West Kimberley Land Conservation District. It neighbours are the
Meda, Yeeda and Debesa stations, the Derby town reserve and Derby RAAF facility.

Figure 1: Mowanjum Station Location
Mowanjum property incorporates the Pastoral Lease, which occupies approximately 55,000
hectares.
Grazing Lease 295/109 runs on both sides of the Derby-Broome road in the northern end of
the Pastoral Lease (see Map). There, freehold are blocks ranging in size from 50-90ha
designated in 1925 as the Knowsley Agricultural Area.
The above areas offer economic opportunities on the Highway for a Caravan Park and/or
Page 9 of 32
Service Station which MAC is currently exploring with Indigenous Business Australia. In
addition MAC is negotiating a Fuel Delivery joint venture partnership for the Derby area.
MAC also has two freehold housing blocks with houses in the township of Derby that
provides valuable collateral for borrowing from Westpac.
1.3 Irrigation Assessment
1.3.1 Infrastructure
Basic infrastructure of handling stock exists with the Trucking yards at 8 km from the Gibb
River turnoff. The proposed site for the irrigation pivots is about 14km along the Gibb River
Road.
1.3.2 Climate
Mowanjums climate is similar to Derby with an average rainfall of approximately 800mm.
The usual growing season for pasture is between December and March with periodic dry
spells where irrigation would be beneficial. Irrigation would be essential during the
extended dry season from April to November.
1.3.3 Soil and Pastures
The main soil types are Pindan sands, marine plains and sand dunes, with a roughly even
mix of the three. The irrigation enterprise will be on Pindan soils.
1.3.4 Carrying Capacity
Under current land and pasture conditions, the estimated carrying capacity of the Pastoral
property by DAFWA is 2,000 Large Cattle Units with potential to expand to 2,400 cattle units
when fully improved (Jeffery, 2007). This carrying capacity would be further expanded with
access to irrigated pastures. The Pastoral Property would provide a source of Weaners for
the Irrigation Enterprise. In addition weaners could be purchase opportunistically for
fattening. Similarly the irrigated pasture could be opportunistically harvested for hay for the
breeding herd.
1.3.5 Hydrology
There are numerous creeks and tributaries. The river and creek systems only flow after
significant rainfall. There are also numerous natural lakes and springs on the property.
The quality and quantity of waterways on the property are dependent on the seasonal
conditions and surrounding land-uses.
In addition to natural surface water, there are numerous bores on the property which have
proven to be very reliable water sources in both quality and quantity for previous Irrigation
enterprises.
The specific groundwater resources of the property and the region in general are unknown.
Derby Township acquires its water from shallow aquifers that underlie the area, therefore it
is anticipated that adequate ground water exists to support the development of irrigated
pasture for fattening to maximise prices for fattened stock and a fodder supply through hay
production.
1.3.6 Weeds
Identified weeds on the property are Parkinsonia and Rubber Bush, which have been
classified for control. This is an environmental management issue and therefore, an
operational management consideration.
1.3.7 Feral Animals
Cats are the main feral animal on Mowanjum station. There are no donkeys, pigs or other
Page 10 of 32
feral animals on the property. While not feral, the native agile wallaby would be attracted to
the irrigated past and enclosure fencing would be required.
1.3.8 Cattle Breeds
Markets in Southeast Asia prefer Bos indicus cattle, or those with better than 50% content
of Brahman, Droughtmaster or Santa Gertrudis. As a rule the more dominant the traits of
these breeds in a beast, the more highly it will be favoured by exporters. Shorthorn (Bos
tuarus) are periodically discounted $0.20/kg below the equivalent Bos indicus price
(DAFWA, 2009).

Figure 2: Hay and Silage Making

Page 11 of 32

DERB
Y
Mowanjum
Community
Gibb River Road
Curtin Air Force Base
To
Broome
Mud Flats
Gibb River Road
Curtin Air
Base
Derby
Figure 3: Mowanjum Station
Approximate Pivot 1 Location
Page 12 of 32
2 Proposal
2.1 Mission Statement, Vision and Objectives
Mission Statement
Within 5 years, build a commercially viable Irrigation business that will provide
employment and training opportunities for indigenous people, using state of the art
irrigation management practices to ensure maximum forage and meat production.
Members of the Mowanjum community aspire to self-determination, self-sufficiency, and
financial independence. MACs vision is an Irrigation business that will provide employment
and training for young people of the Mowanjum community to prepare them for work in the
Irrigation industry.
2.2 Irrigation Infrastructure
To enable increased stock of high quality to be carried, existing infrastructure needs to be
improved, additional construction undertaken, and improved fire management and animal
husbandry practices put in place.
2.3 Establish a 38 hectare Centre Pivot
To irrigate 40 hectares the length of the Centre Pivot is 350 metres.
The land where the Centre Pivot is situated will require clearing and fencing to enclose the
Centre Pivot area and provide a laneway from the Central yards. Initially the Pindan Fence line
from the Central Yards to the Gibb River Road to the east of Mowanjum will provide the laneway
to the Central Pivot area. There will need to be a boundary fence around each pivot with a
gateway for cattle access. In addition an circular inner fence may be needed to exclude the agile
wallabies that predominates in this area. Movable electrical fencing will be used for strip grazing
with cattle being confined to the central yard with a watering trough while fencing is being
moved.

Gate
Electric Fence for Strip Grazing
Pivot Irrigation Pipe
Fencing
Figure 4 Diagram of First Centre Pivot

Page 13 of 32

Figure 5: Overall Centre Pivot Layout Design
Page 14 of 32
2.4 Costs of implementing the proposed Irrigation System
2.5 Capital Cost of Site Works (GWW)
Capital cost of site works for Pivot 1 estimated by GWW (Richard Nixon, 2014)
CAPITAL COST OF ESTABLISHING FIRST 38HA CENTRE PIVOT - GWW $
Planning, Design and Supervision 160,000
Baseline Data Acquisition & Training 54,000
Clearing - Jason Russ 25,000
Roads - Jason Russ 100,000
Fencing - Jason Russ 12,000
Donga 22,000
Pumping - Bore Pump 48,720
Piping - from Bore to Pivot 138,671
Power Supply and electrical - Solar Hybrid
111,200
Instrumentation and control 100,000
Site Development - Earth Works, Pumps, Pipes etc.
210,228
Irrigation system 61,866
Field prep and seeding - Jason Russ 53,616
Commissioning
30,000
Total $ 1,127,301
Table 4: Capital Cost of Establishing the First Centre Pivot
The Centre Pivot will be sown Rhodes grass with a base fertilizer rich in phosphate. These
capital costs are the estimates of Richard Nixon, GGW and still have to be verified for the actual
situation at Mowanjum.
2.6 Research, Development and Advisory Costs (GWW)
Annual Research, Development and Advisory Costs were estimated by Richard Nixon, GWW as:
RESEARCH, DEVELOPMENT and ADVISORY COSTS GGW (Annual) $
Daily Scheduling - Soil Moisture and Met data 18,720
Weekly Monitoring/ Off Site 9,360
Monthly Monitoring - water, nutrient, production 25,920
Monthly Review -Water and Nutrients 10,560
Quarterly Agronomics - Weeds, Leaf Tissue, Water, Hay, Soil 3,600
Quarterly Agronomy Review and Reporting 20,800
Travel and Accommodation 12,000
Monitoring Equipment & IP Licenses 9,500
Analysis Costs - Plants, soil, water, hay 11,840
Total 122,300
Table 5: Research, Development and Advisory Costs
These services will be provided by a specialist hydrologist and agronomist from Global
Groundwater (Australian Bore Consultants Pty Ltd: Hydrology Division. Services will provide:
Remote Telemetry of soil water level and meteorological conditions for precision
scheduling of irrigations (frequency and amount) to optimise pasture growth.
Remote operation of the Centre Pivot when soil water status indicates.
Tissues testing of the pasture for nutrient status and supply of liquid nitrogen for
fertilisation.
Page 15 of 32
Analysis of Hay, Silage and Pasture for digestibility and protein content.
Review of pasture production and animal production.
These estimated costs are based on the experience of GGW with Centre Pivot systems in the
Pilbara which are used by the Mining Industry to dispose of water from the dewatering of mines.
2.7 Direct Production and Leasing Costs
The annual direct production and leasing costs estimate by Richard Nixon, GGW (2014) are:
DIRECT PRODUCTION COSTS - GWW costings plus Mowanjums Labour cost $
Nitrogen Inputs for 38 hectares 76,000
Chemigation Unit Rental 12,000
Fuel for 38 hectares 21,600
Maintenance, services and repairs 10,000
Water delivery 136,800
Fodder Production Contractor 22,800
Mowanjum's Labour Cost 50,000
Total 329,200
Table 6: Direct Production Costs
The costs are the estimate of Richard Nixon, GGW to which has been added Mowanjums cost of
employing Jason Russ to run the operations. It is not clear what the high water delivery charge
relates to. It is assumed that much of the additional labour will be employed under the
Australian Governments new Remote Jobs and Communities Program (RJCP) which is designed to
provide a more streamlined and flexible approach to employment, participation and community-
development services in 60 remote regions across Australia. This will provide Mowanjums Irrigation
Enterprise a ready source of indigenous labour. The Managers costs will be covered by his existing
contract with Mowanjum Aboriginal Corporation but will be a pro rata rate based on each animal
sold but would probably add another $50,000 to the Direct Cost per annum.
The cutting of hay or baling of silage will be done by a contractor. This will avoid the investment in
expensive equipment.

LEASING COSTS FOR PIVOT, PUMP and POWER - GWW costings $
Centre Pivot 70,115
Irrigation Pump & Control Gear 19,360
Hybrid power system 70,030
Total 159,506
Table 7: Leasing Costs for Pivot, Pump and Power
These estimates of Leasing are from Richard Nixon, GGW and have not been verified.
Page 16 of 32
3 Sources of Funding
Mowanjum Aboriginal Corporation has extremely limited sources of funding and much of it
comes via short term Government grants for specific purposes.
3.1.1 WA Department of Housing
Annual grants support the CBT (community building team) who make there money from
department of housing from repairs and maintenance and also refurbishment of housing. Last
2 tenders for refurbishment were for $1.2 million to be completed by May. These funds maintain
a well equipped workshop and body of skilled persons for periodic repairs.
3.1.2 Mowanjum Aboriginal Corporation
3.1.3 Mowanjum Driving Academy (a business of MAC)
MDA will provide access to its two dual control cars for driving lessons for licensed instructors.
A drivers license it essentially mandatory in order for Trainees to be employable.
3.1.4 Mowanjum Community Resource Centre (a business of MAC)
With funding from RDLs Royalties for Regions, Mowanjum CRC provides access to computers
with free access to Government Web Sites for Mowanjum Irrigation Trainees to undertake
theoretical driver training. Access will also be provided to computers and internet to facilitate
work towards TAFE Certificate II in Business Administration and Rural Operations.
For Certificate II Rural Operations, a new module could be introduced on use of near real-time
satellite data for assessing stock carrying capacity (Vegetation Watch, 2012) and for prescribed
burning for fire management (FireWatch, 2012), with training sourced from Satellite Remote
Sensing Services, Landgate.
3.1.5 King Sound Gravel (a joint venture with MAC)
King Sound Gravel provides an ancillary source of income to ensure MACs financial viability in
the event of a downturn in the cattle export market.
3.1.6 Derby TAFE (training possibilities).
Jason Russ has previously run courses for Derby TAFE in pastoral management. Proximity to
Derby of only 12Km makes Mowanjum Pastoral Lease easily accessible for training in all aspects
of Pastoral Management. With the irrigation enterprise the possibly of training in intensive
agriculture exist once the enterprise is establish with emphasis of pasture establishment,
irrigation scheduling, plant nutrition, and intensive grazing management.
3.2 Stakeholders
3.2.1 Mowanjum Aboriginal Corporation (MAC)
MAC was officially incorporated under the provision of the Association Act 1976, and was
officially granted its Certificate of Incorporation and Rules of Association in 1981 (MOW, June
2006). It now operates under the Aboriginal and Torres Strait Islander Act 2006 (CATSI Act).
MAC controls various tracts of land, including a pastoral lease, unencumbered freehold land,
crown land grazing licence and reserve. One of MACs aims is to support the development of
community members through providing opportunities of mainstream employment and the
support of income generating projects.
3.2.2 WA Department of Regional Department of Development (DRD)
DRD with funds from Royalties of Regions available (one billon dollars per year) seeks to
promote regional development. The regional groundwater resources around Derby provide one
such opportunity to diversify the local economy.
Page 17 of 32
3.2.3 WA Department of Water
Exploration of groundwater, establishment of bores capable of supporting irrigation flow rates
of 30 l/s for centre pivot operation and monitoring of water tables.
3.2.4 WA Department of Agriculture and Food WA (DAFWA)
DAFWA assists the State's Agriculture be sustainable and profitable, with a clear focus on
export-led growth. Kimberley Indigenous Management Support Service (KIMMS) is an
initiative funded by DAFWA and ILC. They will provide updated maps of the lease.
3.2.5 Indigenous Land Corporation (ILC)
ILC is an Australian Government authority that assists Indigenous Australians acquire land
and manage Indigenous-held land in a sustainable way to provide cultural, social, economic
and/or environmental benefits for themselves and future generations.
3.2.6 Technical and Further Education (TAFE)
TAFE in Derby will provide training courses and certification.
3.2.7 Winun Ngari Aboriginal Corporation (WNAC)
WNAC in Derby is a training and RJCP provider. From 1 July 2013 the Australian Governments
new Remote Jobs and Communities Program (RJCP) will provide a more streamlined and flexible
approach to employment, participation and community-development services in 60 remote regions
across Australia. This will provide Mowanjums Irrigation Enterprise a ready source of indigenous
labour.
3.2.8 Pastoral Lands Board
The PLB establishes grazing lease requirements of Crown Land and will be enacting the 2015
review.
3.2.9 Russ Contracting Pty Ltd
Russ Contracting Pty Ltd will be contracted to run the irrigation enterprise covering all
operating costs at a cost of $110 per head compared with $120 per head for large standalone
Kimberley Irrigation Leases (DAFWA, 2009). Jason Russ has a significant mustering and
maintenance contract with Christmas Creek with 14,000 head of cattle and has been
approached to provide mustering for Mt Barnett. For these contracts Jason Russ employs
Mowanjum Trainees as part of his contract team.
3.2.10 Department of Corrective Services WA
An MOU is being negotiated by Steve Austin, CEO to provide training services to the new
Derby Prison who will also be a source of TAFE trainees.
3.2.11 Shire of Derby West Kimberley
Mowanjum is a member of and significant rate payer of the Shire of Derby West Kimberley. The
Shire of Derby/West Kimberley covers a vast area of 118,560 square kilometres and is located
more than 2,000 kilometres north of Perth. In the Shire there are numerous Aboriginal
communities and two main towns: Derby and Fitzroy Crossing.
3.3 Business Structure & Management
Mowanjum Irrigation will be run as a business enterprise of MAC under the direction of CEO
Steve Austin and the Mowanjum Council. Trusts are being investigated to isolate each from the
collapse of any one enterprise.
Management will be contracted to Russ Contracting Pty Ltd, for a fee of $110/head per year of
livestock purchased for weaner fattening by Mowanjum Irrigation. Contract will include all
Page 18 of 32
livestock operating costs. All administrative services will be provided by MAC who already pay
the insurance, Derby Shire rates and Irrigation Board rent and asset replacement associated
with the Irrigation lease.
3.3.1 Future Administrative Structure and Succession Plan
Mowanjum Irrigation increases MACs business enterprises and number of government grants
and training being undertaken ideally requires an Administrative Officer for efficient
management of all these enterprises, grants and community Services (Morgan, 2012).
The administrative structure recommended is:
1. Board
2. CEO-Business Manager (Steve Austin)
3. Senior Administrative Officer (new position)
4. Senior Financial Officer (Nardia Gerrard)
5. Junior Financial Officer (new position) for off-site business enterprises
These positions and other administrative costs would be funded by a 10% administrative levy
on all grants, turnover of business enterprises and community services. Positions 3 and 5
provide the basis of a succession plan for when either the CEO or SFO depart MAC.
3.3.2 Corporate Structure
The proposed corporate structure for Mowanjum Irrigation is depicted in

was recommended in a recent review of MACs business activities (Marin, 2012) for
establishing a joint venture for fuel distribution. The proposed structure minimises the financial
risk of any one enterprise compromising MACs financial viability. For Mowanjum Irrigation
this would minimise the risk of MACs Directors compromising its financial viability. The latter
is achieved by putting MAC at arms length through a separate (Pty Ltd) governance structure
and appointment of independent Directors with a commercial focus. Ultimately, MAC is the
parent organisation but within the structure profits can be retained within Mowanjum
Irrigation for further development of the Irrigation enterprise or distributed to its shareholder
which is Mowanjum Enterprises.
This structure has been adopted for Mowanjum Pastoral and is of particular relevance to the
WA Governments 2015 Pastoral Lease review where one of the criteria will be the soundness
and stability of the Governance structure to ensure compliance with the terms of the lease
(Brian Lloyd, 2012 Personal Communication). PLBs preference is for a sub-lease, but such an
arrangement could compromise MACs objective of providing employment and training.
Therefore the proposed corporate structure should meet the objectives of PLB and MAC.
Mowanjum Irrigation could operate as an enterprise of Mowanjum Pastoral or be incorporated
as a separate Pty Ltd company. MAG will need to decide the best course of action in the light of
the administrative cost of running two separate Pty Ltd companies.

Page 19 of 32

Figure 6: Mowanjum Corporate Structure

Mowanjum Aboriginal Corporation
(Public Benevolent Institution)
Mowanjum Enterprises Pty Ltd
(Trustee)
Mowanjum Enterprises
Charitable Trust
Mowanjum Irrigation Pty Ltd
Or
Mowanjum Pastoral and Irrigation
Pty Ltd
Community Level
Already in place
Enterprise Level
Currently being implemented
Business Level
To be implemented
Page 20 of 32

3.3.3 Training
Per Table 8: Training Plan, Mowanjum Pastoral will train its employees and ensure training is
provided on an ongoing basis, to maintain a high level of job performance and employability.
This training will include Mowanjum Irrigation expanding the range of skills.
Table 8: Training Plan

Course/Certificate Name Training provider Number of Participants
Yr 1 Yr 2 Yr 3 Total
Certificate II in Rural Operations TAFE 10 10 10 30
Governance Training OIC 5 5 10
Business Administration ENAC 4 4 5 13
Automotive Servicing ENAC 5 6 7 18
Drivers License Mowanjum Driving Academy 7 7 6 20
Total 31 32 28 91
Page 21 of 32
4 SWOT Analysis
4.1.1 Strengths
Availability of suitable soils, groundwater and access to power suitable for Centre Pivot
irrigation.
The property can easily be accessed throughout the year (on horseback during the wet
season), meaning that cattle can be moved along the laneway to the Centre Pivots.
Close proximity to Mowanjum Community, which allows staff to arrive at work daily.
Steve Austin, CEO, has good business experience in the trucking industry and with
managing other Aboriginal Corporations.
Russ Contracting Pty Ltd has a mustering and maintenance contract of 10 weeks per
year with Christmas Creek which runs 14,000 head on over 200,000ha. Russ
Contracting Pty Ltd will be contracted to run the Irrigation Enterprise.
Mowanjum community members are highly motivated to be involved in the business,
evidenced by the number of people who engaged with the TAFE training.
4.1.2 Weaknesses and Mitigations
Lack of capital for infrastructure and cattle to realize productive potential.
o Grants from DRD, ILC and finance from Westpac.
Profitability of grazing systems sensitive to stocking rate
o Investment in more paddocks, bores, trap yards and pasture improvements to
maximize carrying capacity.
Lease will be run directly by MAC to minimize overhead costs, to capitalize on its
freehold assets to access seasonal finance and to provide diversification to minimise risk.
Lack of Irrigation Management expertise contract GGW Consultant Richard Nixon to
provide technical advice.
Lack of administrative capacity and succession plan,
o Appoint an administrative officer.
4.1.3 Opportunities
Development of irrigation enterprise for year round fattening and supplement of
breeding herd..
To provide meaningful work for Mowanjum people and training and skills to become
employable in Kimberley Pastoral industry.
Through intensive grazing provide a service to other stations that require their cattle to
be fattened before sale.
To attract funding for training Rural Traineeships
Become Derby regional TAFE training centre for indigenous people to enter into full time
employment in the Irrigation industry.
Develop a new administrative structure for MAC with a Senior Administrative Officer
and basis for future succession.
Include in the existing primary and secondary education curriculum the effective use of
land incorporating a Historic centre for the involvement of Aboriginal people in the
Page 22 of 32
Kimberley Irrigation industry
4.1.4 Threats and Mitigations
Low cattle prices due to market fluctuations
o Sales projections use average cattle prices over the past few years, to
demonstrate financial viability even in an unfavourable market
o Weight gains of cattle are modelled as below average.
o The market will be monitored to ensure planning is in place to counter low prices.
Politics and jealousy among Mowanjum groups
o Maintain a professional approach; employ workers from outside Mowanjum if
necessary.
Mowanjum people thinking they own the station, so trespass for killers whenever they
like
o Communicate with Mowanjum Council to ensure the agreement is honoured by
the community members, enforce trespassing policy, and provide the agreed
number of killers per year.
Vandalism through cutting fences and lighting fires
o Again work with the Mowanjum Council as above.
o Develop community activities for young people such as the Community Resource
Centre and sports activities to reinforce positive values and respect for property
belonging to others.
Level of commitment to training displayed by employees
o Talk to them to find out what problems there may be, make the training fun and
interesting to ensure high level of participation.
Contracting Irrigation Management
Success of Russ Contracting Pty Ltd demonstrates Jasons competence in cattle, business
and Aboriginal management, and commitment to development of Mowanjums lease into
a profitable cattle and Indigenous training enterprise.
Jason Russ is an Indigenous pastoral contractor keen to pass on his extensive skills in a
collaborative relationship with Mowanjum and TAFE. His pastoral contracting business
provides a unique opportunity for Aboriginal people to learn his skills. He is already as
source of contact and employer for future employment of trainees.
Proximity to Derby makes Mowanjum Irrigation an attractive working proposition for
Jason Russ compared to larger more remote Pastoral leases.
Jason Russ (8th July, 2012) has quoted $110 per head per year for running Mowanjum
Irrigation.
Benefits of a long-term Sub-Contract business model for Management of Mowanjum
Irrigation are:
This contractual business model conforms with the central importance of Aboriginal land
development and control, essential for providing a sustainable economic base for Aboriginal
economic independence as an alternative to passive welfare (Gary Folley, 2011).

Page 23 of 32
5 Competitive Analysis
5.1 Competitors
Competition will come mainly from local Kimberley stations, primarily supplying cattle for the
live export market in Broome.
These same stations are also a source of income from sale of agistment, unbranded stock,
lease of yards and source of stock to purchase to fatten.
5.2 Competitive Advantages
High productivity of coastal flood plains, suitable for successful cattle production and
fattening own stock and stock from neighbouring properties. Suitable for pasture
improvement with legumes and more productive species using grazing cattle as seed
distributors.
High quality of underground water, ensuring ongoing supply of freshwater.
Water accessibility ( from 10 below the surface) the depth of the water allows
for very cost effective methods of accessing water. Also the possibility of developing
irrigated pasture for fattening in the dry season and for forage and seed production.
There is no permanent surface water on Mowanjum, which means that cattle will
naturally come in to drink from available water points (bores) that will be fenced (cattle
traps). Therefore, the cattle will muster themselves, resulting in easier management
and reduced mustering costs.
The property has the ability to move cattle quickly off the property, which makes
room for other, younger cows, and therefore increases the turn off rate on the property
and the level of sales, while maintaining the carrying capacity over the year.
The cattles peak condition is in the wet season, and most other properties are unable to
transport them off the property in the wet, missing the high prices of the early market.
The majority of cattle sold out of the Kimberley region are not sold in prime condition,
due to wet season access problems. Mowanjum landscape and access to the Derby
highway and flood plain soils means that it can muster from March and sell cattle in
prime condition, achieving significantly higher income and turnover of stock.
Close proximity to the Derby highway, high water quality and feed availability present
an opportunity to develop intensive grazing to allow Mowanjum to increase numbers by
almost 50% within a short period of time. Providing a service to other properties
that require their stock to be fattened is a lucrative option for Mowanjum. It can
then decide whether to purchase the stock and finish them off (fatten them before
shipping) or sell agistment.
The Irrigation Enterprise will increase these competitive advantages and provide the
added opportunity of selling high quality hay in the dry season or baled silage in the wet
season.

Page 24 of 32
6 Research Results for Irrigated Beef Production

With high nitrogen inputs of about 800 kg N/ha and adequate soil water grass yields of over
20 tonnes per hectare can be produced (Teitzel et al. 1991). This is rain fed, therefore with
irrigation it is expected that this level of production would be exceeded. Projections by GGW
are that levels of production of 36 tonnes/ha/year should be achievable.

Livestock of 200kg weight can gain 1 kg/ha on a high quality intake of 17 Mcal/day of
Metabolizable Energy (Figure ) and field trials on tropical pastures both rainfed and irrigated
indicate that live weight gain of 1000kg/ha/year could be produced. Thus for a 38 hectare
Centre Pivot this would translate into a potential income of $80,000 per year of production.

These assumptions were used in the following forecasts.
Page 25 of 32

Page 26 of 32
7 Modelling the Mowanjum Irrigation Enterprise
An analysis was done using a simplified model of irrigation water demand, pasture growth,
animal feed intake and conversion of pasture to meat based on a set of scientific assumptions.
This modelling was done independently of GGW then compared later and calibrated against
their results to predict the best case scenario. The initial assumptions made in the model were:
7.1 Assumptions
Assumptions
Solar Irradiance of 1 cal cm
-2
day
-1
= 41.868 kJ m
-2
day
-1

Temperature is non limiting for pasture or forage growth
Leaf Area Index of pasture 2
Grazing feed utilization efficiency 0.8
Nutrient limitation multiplier 0.8
Digestibility of pasture or fodder 0.8
Metabolisable Energy/kg of Digestible Feed 3.6
Metabolisable Energy/kg of Feed in Mcal 2.88
kg/McalME/day - intake of Cattle 16.3
Market value $/kg of Live Weight Gain 2.2
Centre Pivot area (ha) 38
Live Weight Gain per day per beast kg/beast 1.2
Table 9: Model Assumptions

Page 27 of 32

7.2 Meteorological Data and estimate of Soil Water Deficit
The data in Table 10 is drawn from the Bureau of Meteorology.
Meteorological Data - Derby Airport Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Mean maximum temperature (C) 35.2 34.3 35.1 35.5 32.7 30.4 30.6 32.6 35.3 37 38.1 37.2 34.5
Mean minimum temperature (C) 25.7 25.4 25 22.7 18.8 15.6 14.8 16 19.5 23 25.5 26.3 21.5
Mean rainfall (mm) 198.8 201.1 135.3 25.7 19.5 8.5 7.5 0.8 1.1 2.6 12.8 71.6 690.7
Median monthly rainfall (mm) 168.2 178.8 86.8 10.2 0.2 0 0 0 0 0 5.1 47.6 706.2
Pan Evaporation (mm) 250 240 230 200 200 180 180 200 210 250 290 300 2730
Actual Evaporation (mm) 80 90 75 30 25 20 18 15 15 20 30 75 493
Soils water deficit (0.8 pan evap - rain) (mm) -1.2 9.1 -48.7 -134 -141 -136 -137 -159 -167 -197 -219 -168 -1498.7
Daily Solar Exposure Mean MJ m
-2
23.2 22.6 22.9 21.8 18.9 17.3 18.6 21.6 24.7 26.8 27.4 25.3 22.6
Daily Solar Irradiance (1 cal cm
-2
day
-1
) 554 540 547 521 451 413 444 516 590 640 654 604 540
Table 10: Meteorological Data

Page 28 of 32
7.3 Herbage to Liveweight Gain Conversion

Herbage-to-LiveWeight Gain at $2.2/kg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Potential Herbage Growth Rate( kg/ha/day) 194 192 193 189 176 168 175 188 199 206 207 201 68,620
Actual Herbage Growth Rate LAI of 2 (kg/ha/day) 102 101 102 100 93 89 92 99 105 109 110 106 36,253
Forage production (kg/ha) 3075 3040 3058 2991 2791 2664 2768 2978 3157 3259 3285 3187 36,253
Metab. Energy Mcal/kg/ha (3.6*Digestability) 7084 7004 7045 6891 6431 6138 6378 6862 7273 7508 7570 7343
LWG of 200kg Cattle kg/Month/ha. Sell at 300kg 435 430 432 423 395 377 391 421 446 461 464 451 5,124
Pivot Total /yr
Stocking Rate per Pivot for LWG of 1.2 kg LWG/day 362

358 360 352 329 314 326 351 372 384 387 375 971
Gross Return at $2.2/kg LWG per month/ ha 956 945 951 930 868 828 861 926 982 1013 1022 991 $428,399
Gross Margin (Gross Return less Direct Costs)/ha 344 333 339 318 256 216 249 314 369 401 409 379 $149,199
Table 11: Herbage to Liveweight Gain (at $2.2/kg)
Total forage production is predicted at 36 tonnes/ha/year. This compares with GWWs estimate of 35 tonnes/ha/year. Feed conversion
efficiency was 7.07 kg of meat for each 1kg of pasture grown. This compares with 1 kg of meat for each 6 kg of pasture assumed by GWW.
These high levels of pasture production depends on precision management of water and nitrogen inputs. The high level of and feed
conversion efficiency depends on high protein pasture and precision grazing management using a strip method that ensures a high level
of feed utilization by the animals.
What is actually achieved will probably be less that was is predicted above and this needs to be accounted for in the economic analysis.
7.4 Irrigation Scheduling
Perennial Pasture Irrigation Scheduling Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Irrig. Reqn (0.8*Pan Evap less Median Rainfall) mm 31.8 13.2 97.2 149.8 159.8 144 144 160 168 200 226.9 192.4 1,687
Irrig. Water Megalitres/hectare per Month 0.318 0.132 0.972 1.498 1.598 1.44 1.44 1.6 1.68 2 2.269 1.924 17
Watering at 35 l/sec - days/month 4 2 12 19 20 18 18 20 21 25 29 24
Table 12: Irrigation Scheduling Requirements

Page 29 of 32
7.5 Summary of Costs from Section 2

SUMMARY OF COSTS - GWW estimate
RESEARCH, DEVELOPMENT and ADVISORY COSTS - Annual 122,300
DIRECT PRODUCTION EXPENSES plus Mowanjums Labour cost of 50,000 Annual 329,200
LEASING COSTS FOR PIVOT, PUMP and POWER Annual 159,506
CAPITAL COST OF ESTABLISHING FIRST 38HA CENTRE PIVOT 1,127,301
Total Cost of establishing and operating the first Centre Pivot in the first year $1,738,307

Cost of adding an additional Pivot GWW estimate $382,046
Table 13: Cost of developing and operating the first Centre Pivot

To assess the ability of the Mowanjum Irrigation enterprise to service the costs of the proposed development the following economic
parameters were calculated:
1. The Gross Margin as the Gross Income less the Direct production expenses without the Leasing Cost
The Gross Margin is the amount of income to service the fixed or unavoidable costs of Leasing, Research, Development and Advisory
and Capital Development. Thus the following are also computed to determine how much of these costs the Mowanjum Irrigation
Enterprise could support. Conversely to indicate the level of external financial support by the Government or Investor that would
be needed.
2. The Gross Margin less the Leasing Cost
3. The Gross Margin less the Leasing and Research, Development and Advisory cost
4. The Gross Margin less the Leasing, and Research, Development and Advisory cost and 20% of the Capital Cost.
5. These Margins are calculated for market values of the meat on the hoof from $1.0 to $3.5/kg of Live Weight

Page 30 of 32
7.6 Financial Sensitivity Analysis
The financial results were analysed for sensitivity at three different levels of production.
Feed Conversion Efficiency of 1:7 and Pasture Production of 36 tonnes/ha
Price/kg Liveweight Gain $1.0/kg $1.5/kg $2.0/kg $2.5/kg $3.0/kg $3.5/kg
Gross Return from 38ha Pivot $194,727 $292,090 $389,454 $486,817 $584,181 $681,544
Gross Margin (Gross Return-Direct Costs) -$134,473 -$37,110 $60,254 $157,617 $254,981 $352,344
Gross Margin - Leasing Cost -$293,979 -$196,615 -$99,252 -$1,888 $95,475 $192,839
Gross Margin - R&D Cost -$416,279 -$318,915 -$221,552 -$124,188 -$26,825 $70,539
Gross Margin - 20% Capital Cost -$641,739 -$544,376 -$447,012 -$349,649 -$252,285 -$154,922
Table 14: Sensitivity to variations in price of LWG, for optimal feed conversion efficiency and pasture production
Feed Conversion Efficiency of 1:14
Gross Return from 38ha pivot $97,363 $146,045 $194,727 $243,409 $292,090 $340,772
Gross Margin (Gross Return Direct Costs) -$231,837 -$183,155 -$134,473 -$85,791 -$37,110 $11,572
Gross Margin - Leasing Cost -$391,342 -$342,661 -$293,979 -$245,297 -$196,615 -$147,934
Gross Margin - R&D Cost -$513,642 -$464,961 -$416,279 -$367,597 -$318,915 -$270,234
Gross Margin - 20% Capital Cost -$739,102 -$690,421 -$641,739 -$593,057 -$544,376 -$495,694
Table 15: Sensitivity to variations in price of LWG, for sub-optimal feed conversion efficiency and pasture production
From the above analysis it is evident that profitability is highly dependant on achieving a high level of pasture production of high protein
quality to ensure a feed conversion efficiency of at least 1:7 by grazing cattle (Table 13). Therefore a high level of technical advice and
support along with the skilled management of Jason Russ will be needed to achieve this.
The lower level of production and feed conversion efficiency (Table 14) is not a viable option.
The potential value of hay or silage again will depend on the quality. The value of $36tonnes/ha converted to high quality hay at
$300/tonne would be over $400,000 for the 38 ha Centre Pivot. Low quality hay at $60/tonne would only produce $82,000 return.

Page 31 of 32
7.7 Discussion of Economics of Mowanjum Irrigation Enterprise
The proposed Irrigation development would be an exciting complement to Mowanjums
Pastoral enterprise and would enable the full potential of their 55,000ha pastoral lease to be
realised. It would offer immense social and economic benefits to Government in overcoming
indigenous disadvantage. This alone would be worth $ millions to Government in reduced
health, incarceration and policing costs. However the sustainability of this exciting initiative
ultimately depends on the enterprise being profitable for Mowanjum.
The profitability of the irrigation enterprise is sensitive to the market value of the livestock gain
of the weaners, the level of forage production and feed conversion efficiency. Grazed tropical
perennial pasture heavily fertilized with nitrogen is the most profitable option.
Mowanjum should be and must be able to cover the direct costs of the irrigation enterprise.
The Government would need to cover the Capital Cost of site preparation, the Research,
Development and Advisory Costs of GGW and the leasing cost in at least the first two years.
Under optimum conditions Mowanjums Gross Return will only be able to cover the direct costs
of production of $329,000 if Liveweight cattle prices are above $2/kg (Table 1). To cover the
leasing cost would require that cattle prices to be above $3/kg or the direct costs to be reduced
by about $100,000 per year.
Under sub-optimal conditions there would be no positive Gross Margin therefore achieving the
potential of this sub-tropical environment through state of the art irrigation, nutrient and
grazing management becomes critical for the success of this project.
The annual Research, Development and Advisory cost of $122,300 will yield up valuable
technical and economic data for future investors in such irrigation enterprises in the region.
This cost has traditionally been borne by Government for the public good. They have
traditionally made the Intellectual Property gained freely available to potential investors.
Therefore it is assumed that this cost will be borne by the Government. However in this situation
Government would be sub-contracting their R&D&A role to GGW, who would subsequently
need to charge for access to their IP.

Page 32 of 32
8 References
CRC, 2012. On the Mowanjum Community Resource Centre:
http://www.mowanjum.crc.net.au/
Marin, P. 2012, Recommended Mowanjum Corporate Structure. MLCS Corporate Pty. Ltd.
Morgan, 2012. P. Morgan, Mowanjum Aboriginal Corporation Strategic Plan 2012-22. Betterlink
Group: Business Consultancy and Training Services. Suite 17, 133 Kewdale Road, Kewdale WA
6105.
ORIC, 2012, Mowanjum Aboriginal Corporations Governance and Financial records at the Office
of the Registrar of Aboriginal Corporations:
http://www.orac.gov.au/document.aspx?concernID=100090
Shaw, 2012. Private communications from Russell Shaw, WA Department of Agriculture and
Food.
VegetationWatch, 2012:
http://www.landgate.wa.gov.au/corporate.nsf/web/Vegetation+Watch
The Nutrient Requirements of Farm Livestock. ARC 1965. Figure 6.2 page 235
Smith, RCG and Williams, WA. 1973, Model Development for a Deferred Grazing System. J
Range Management 26:464-460
Teitzel, JK, Gilbert, MA and Cowan, RT 1991. Sustaining productive pastures in the tropics, 6,
Nitrogen fertilised grass pastures
Nixon, R. (2014) Global Groundwater, personal communication and spreadsheet.

Mowanjum Irrigation Business Plan 8 PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mowanjum Irrigation Business Plan 8 PDF

Uploaded by

Copyright:

Available Formats

Mowanjum Irrigation Business Plan Commercial in Confidence

You might also like