Economics and risk of adaptation options in the Australian cotton industry

Economic impact and the cost and risk of adaptation from future climate change (CC) are the key concern of primary industries including the Australian cotton industry. Utilising outputs from biophysical modelling studies, this study quantifies the economic impact of future CC on irrigated and rain-fed cotton production systems and evaluates the effectiveness of adaptation options in dealing with the projected negative impacts or in capturing the opportunity of future CC for the period centred on 2030. For irrigated cotton, three key cotton production areas in eastern Australia were considered: Dalby, Narrabri and Hillston with rain-fed cotton is also analysed at the first two sites. Adaptation options considered included changing planting time, row configurations, irrigation scheduling triggers and rotation patterns. For irrigated cotton under CC, results indicated that (1) gross margin (GM) would increase or decrease depending on location and across irrigation triggers when associated with normal planting times; (2) later plantings, especially +15d, would have positive impacts on GMs across all locations when compared with normal planting times; (3) overall, rotations of cotton three years in and one year out would perform the best in terms of GMs when compared with other rotation patterns across all locations; (4) the least negatively affected rotation strategy would be cotton 2years in and 1year out in terms of profitability and risk; and (5) later planting at +30d would increase whole farm profitability compared with normal planting across all irrigation triggers. It was found that the positive impacts of late plantings on GM and whole farm profitability could not offset the negative impacts of CC at Narrabri and Hillston, indicating that other adaptation options are maybe needed in order to maintain current profitability.