An investigation of the potential economic and environmental … · 2017-07-11 · Parts of this...
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An investigation of the potential economic and environmental
benefits of expanding prawn aquaculture in Queensland and
reassessment of anomalies in the existing regulatory framework
STUDENT: SALIZA MOHD NAZRI (41557815)
COURSE CODE: BIOT 8004 (BIOTECHNOLOGY THESIS)
SUPERVISORS: PROF ROSS BARNARD
DR BRIAN PATERSON
HELEN JENKINS
A thesis submitted for the degree of Doctor of Biotechnology at
The University of Queensland in 2017
School of Chemistry and Molecular Biosciences
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ABSTRACT
Being one of the seven natural wonders of the world, the Great Barrier Reef (GBR) possesses
outstanding and universal value, so the protection of its biodiversity is imperative. However, the
condition of the GBR has worsened markedly in recent years. One of the major threats to the GBR is
crown-of-thorn-starfish (COTS) outbreaks which are due to an elevated level of dissolved inorganic
nitrogen (DIN). The major source of DIN load originates from the use of fertiliser from sugarcane
farming, particularly from the Wet Tropics region. In order to see the much sought after improvement
in the health of the reef in the GBR, it will be crucial that the Wet Tropics region is effectively
managed, because this relatively small proportion of land contributes to almost half of the total DIN
load in the GBR.
This thesis investigates the potential benefits of converting a certain proportion of sugarcane farms
to prawn aquaculture, by exploring the environmental impact and financial returns of both industries.
The findings show that the conversion of marginal sugarcane land in Ingham, Wet Tropics, into prawn
aquaculture would generate positive net present values (NPVs) even when discount rates of 7%, 10%,
12% and 15% were used. The transition of management practices for sugarcane farming in the Wet
Tropics from class D (dated) to class C (common) and from class C to class B (best) generates positive
NPVs but the transition from class B to class A (aspirational) generates negative NPVs, based on the
7% discount rate. This suggests that sugarcane farmers will most likely adopt the transition to class B
management practice, but not class A due to reduced profitability. Moreover, complete adoption to
best management practice by the sugarcane farmers would still be insufficient to meet the GBR
Water Quality Guidelines, which advocate a 70-80% reduction in DIN in the Wet Tropics region. The
National Environmental Science Program (NESP) is also exploring alternative land uses for marginal
cane lands, that have the capacity to reduce nitrogen loads. These alternatives include aquaculture.
For the analysis of the environmental impact of prawn aquaculture versus sugarcane farming, the
difference in the nature of the pollution must be acknowledged first. This has not been done in
previous analyses. Prawn aquaculture has a point source discharge that allows it to be easily
monitored compared to monitoring the discharge from diffuse source pollution such as sugarcane
farming. In Australia, prawn aquaculture is highly regulated compared to the voluntary best
management practices (BMPs) of sugarcane farming. Therefore, the prawn aquaculture industry has
had to innovate in order to operate sustainably and it has improved its water treatment system
remarkably by the use of settlement ponds, sand filtration and the latest algal bioremediation
system, for example on the prawn farm under development in Guthalungra.
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The requirement of zero net nutrient discharge imposed on prawn aquaculture farm under
development at Guthalungra has also encouraged its collaboration with other organizations such as
MBD Energy Ltd and James Cook University to innovate and to test the viability of the algal
bioremediation system. The algal bioremediation water treatment system potentially allows ‘cleaner’
water to be discharged than the water input from its surrounding environment. This suggests that
the stringent regulation placed on prawn aquaculture adjacent to the GBR has encouraged
innovation that promotes sustainability.
This thesis also discovered errors in the Jacobs SKM benchmark study and suggests other more
appropriate methods (e.g. bioindicators) for comparing environmental impacts of the industries
which have a different “nature” of pollution (diffuse versus point source). The approach used by
Jacobs SKM benchmark study, using the same parameter ‘nutrient per hectare’ to compare the
sugarcane industry with prawn aquaculture, is not the best way to correctly conclude which industry
poses a higher environmental risk to the GBR.
In summary, the recommendations proposed for protecting the GBR, by strengthening its resilience are:
(i) To convert marginal cane land to a potentially more sustainable and profitable industry, such as prawn aquaculture.
(ii) To retire certain cropping lands for conservation and restoration.
(iii) To impose a more scientifically based regulatory framework for aquaculture and conventional agriculture.
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DECLARATION BY AUTHOR
This thesis is composed of my original work and contains no material previously published or written
by another person except where due reference has been made in the text. I have clearly stated the
contribution by others to jointly authored works that are included in this thesis.
I have also clearly stated the contribution of others to my thesis as a whole, including statistical
assistance, survey design, data analysis, significant technical procedures, professional editorial
advice, and any other original research work used or reported in this thesis. Its content results from
work I have undertaken since my research higher degree candidature commenced and does not
include any substantial amount of work submitted to qualify for the award of any other degree or
diploma in any other university or tertiary institution. BIOL 8001 was used as the basis for my
literature review. The purpose of this course (BIOL 8001) is for students to prepare literature review
for the thesis.
I acknowledge that an electronic copy of my thesis must be lodged with the University Library and,
subject to the policy and procedures of The University of Queensland, the thesis will be made
available for research and study in accordance with the Copyright Act 1968 unless a period of
embargo has been approved by the Dean of the Graduate School.
I acknowledge that the copyright of all material contained in this thesis resides with the copyright
holder(s) of that material. Where appropriate I have obtained copyright permission from the
copyright holder to reproduce material in this thesis.
Saliza MOHD NAZRI
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PRESENTATION AND PUBLICATION
Presentation
Parts of this thesis have been presented at the Ridley Aqua feed Australian Prawn and Barramundi
Farmers Symposium in 2015. The Ridley Prawn and Barramundi Farmers Symposium Program was
held from 30th-31st July 2015 in Gold Coast.
Publications
No publications.
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ACKNOWLEDGEMENTS
‘Shared joy is double the joy, shared sorrow is half the sorrow’. I am grateful that God has given me
the chance to complete this thesis with the support from the best people that I could have.
Firstly, I would like to thank my supervisors, Prof Ross Barnard, Dr Brian Paterson and Helen Jenkins,
who have been there for me throughout this thesis writing journey. I could not have completed this
thesis without their guidance and support. Although we may not see each other as often anymore, I
hope that they know they will always be remembered and appreciated. I will not forget the late nights
you have spent reading and commenting on my thesis in order for me to succeed.
I would also like to express my gratitude to my mom, Asiah, and my dad, Nazri, for their unconditional
love and prayers for me to succeed. They have given me more than I could have ever asked and I
hope that they are blessed with good health and happiness. I apologize to have made you worry a lot
about me especially the past few months. I hope I can make you both happy and relieved with this
thesis completion.
I would also like to thank my ex-husband, Fazren, for his support. It was challenging for both of us to
complete our thesis while taking care of our precious little boy, Mikhael, who loved to receive our
full attention when we were still together. Although we recently ended up going separate ways, I will
treasure the happy moments we had together and I will always pray for your happiness.
To my little boy, Mikhael, mommy wants to thank you too for generously giving me your cheeky
smiles every day that can brighten up my day any time. And thank you for being mommy’s pillar of
strength when I needed it to complete this thesis.
To my former mother-in-law, thank you very much for coming all the way from Malaysia to Australia
to take turns with my mom to take care of our little boy for months when I needed to complete my
thesis. I really appreciate it and am utterly grateful.
To my twin sister, Salina, please do remember that although I was very busy and did not spend much
time with you, I really appreciate your understanding and your unconditional love for me.
I would also like to thank the examiners who have given comments and feedback that allow me to
improve my thesis.
Last but not least, I would like to thank my friends and others who have contributed to this thesis
completion either directly or indirectly. And thank you God for giving me the strength to finally
complete this thesis.
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CONTENTS CHAPTER 1 Literature Review ............................................................................................................. 13
1.1 The Great Barrier Reef .............................................................................................................. 13
1.2 The Main Threats to the Great Barrier Reef.............................................................................. 14
1.2.1 Crown-of-thorn starfish (COTS) outbreak .......................................................................... 14
1.2.2 Cyclone damage & Climate change .................................................................................... 16
1.2.3 Coral bleaching ................................................................................................................... 16
1.2.4 Coral disease....................................................................................................................... 18
1.3 Addressing these major threats to the Great Barrier Reef ....................................................... 19
1.4 Targeting the region which is highly associated with the highest pollutant load to the GBR .. 20
1.5 Conclusions ................................................................................................................................ 23
1.5.1 Research objectives ................................................................................................................ 23
1.5.2 Scope of the research ............................................................................................................. 25
CHAPTER 2 Review on the Regulatory Environment of the Great Barrier Reef and the Primary
Industries Operating Adjacent to the Area ......................................................................................... 26
2.1 Overview of regulatory environment in Great Barrier Reef ..................................................... 26
2.2 Point source pollutant ............................................................................................................... 27
2.2.1 Regulations specifically aimed at aquaculture operation .................................................. 27
2.2.2 Zero net nutrient discharge requirement .......................................................................... 30
2.2.3 Operational Policy for Marine Prawn Aquaculture in Queensland .................................... 30
2.3 Diffuse source pollutants .......................................................................................................... 31
2.3.1 Regulations imposed on cattle grazing and sugarcane farming for reef protection ......... 31
2.3.2 Reef Plan and GBRMPA Water Quality Guidelines............................................................. 31
2.4 Review on the Current Monitoring System and Agricultural Industries in the Great Barrier
Reef ................................................................................................................................................. 33
2.4.1 Reef Plan 2003 .................................................................................................................... 33
2.4.2 First Report Card 2009 Baseline ......................................................................................... 33
2.4.3 Report Card 2013 – Reef Water Quality Protection Plan ................................................... 36
2.5 Effluent loads ............................................................................................................................. 37
2.5.1 Effluent loads from diffuse source pollutants .................................................................... 37
2.5.2 Effluent loads of point source pollutant............................................................................. 41
CHAPTER 3 Investigation on the environmental impacts of the nutrient emission from sugarcane
farming and prawn aquaculture and assessment of the current regulatory system in Queensland . 43
3.1 Introduction ............................................................................................................................... 43
3.2 Data and Methods ..................................................................................................................... 44
3.3 Results ....................................................................................................................................... 45
3.3.1 Industry Status Quo ................................................................................................................ 45
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3.3.1.1 Advances in sugarcane industry to operate sustainably ................................................. 45
3.3.1.2 Breakthrough in the prawn aquaculture industry in the effort to operate more
sustainably ................................................................................................................................... 51
3.3.2 Critical Analysis of the Jacobs SKM’s benchmark study on effluent emissions from shrimp
aquaculture and sugarcane farms ................................................................................................... 58
3.3.2.1 Prawn farm effluent data from Jacobs SKM benchmark study........................................... 60
3.3.2.2 Sugarcane farm effluent data from Jacobs SKM benchmark study .................................... 65
3.3.2.2.2 Sugarcane farm nitrogen effluent load ........................................................................ 67
3.3.3 Investigation on the main challenge faced in achieving the water quality targets as specified
in the Reef Plan. .............................................................................................................................. 70
3.3.3.1 The voluntary approach imposed on diffuse source polluters appears to be ineffective
in protecting the Great Barrier Reef ........................................................................................... 71
3.4 Discussion .................................................................................................................................. 78
3.5 Conclusions ................................................................................................................................ 81
CHAPTER 4 Economic Analyses of the Industries operating adjacent to the Great Barrier Reef ....... 85
4.1 Introduction ............................................................................................................................... 85
4.2 Data and Methods ..................................................................................................................... 86
..................................................................................................................................................... 86
4.3 Results ....................................................................................................................................... 87
4.3.1 Gross Value Production (GVP) per hectare ........................................................................ 87
4.3.2 NPV Analysis ....................................................................................................................... 89
4.4 Discussion and Conclusion ...................................................................................................... 102
CHAPTER 5 Conclusions ..................................................................................................................... 104
5.1 Introduction ............................................................................................................................. 104
5.2 Recommendations .................................................................................................................. 105
5.3 Limitations and Future Directions ........................................................................................... 106
REFERENCES ...................................................................................................................................... 108
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LIST OF ABBREVIATIONS
ABARES Australian Bureau of Agricultural and Resource Economics and Sciences
AIMS Australian Institute of Marine Science
BMP Best Management Practice
CCS Commercial content of sugar
COTS Crown-of-thorns starfish
CRC Cooperative Research Centre for Aquaculture
CSIRO Commonwealth Scientific and Industrial Research Organisation
DAFF Department of Agriculture, Fisheries and Forestry
DEHP Department of Environment and Heritage Protection
DIN Dissolved inorganic nitrogen
ENSO El Nino Southern Oscillation
EPBC Environment Protection and Biodiversity Conservation
FAO Food and Agriculture Organization of United Nations
FTE Full-time equivalents
GAV Gill-associated virus
GBR Great Barrier Reef
GBRMPA Great Barrier Reef Marine Park Authority
GVP Gross Value Production
INFFER Investment Framework for Environmental Resources
IRR Internal Rate of Return
N Nitrogen
NESP National Environmental Science Program
NPV Net Present Value
NRM Natural Resource Management
PRF Pacific Reef Fisheries
QAO Queensland Audit Office
QCA Queensland Competition Authority
QLUMP Queensland Land Use Mapping Program
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LIST OF FIGURES
Figure 1. The causes of coral mortality in the Great Barrier Reef (Osborne et al., 2011). The main threats to
the coral reefs in the Great Barrier Reef are crown of thorn starfish outbreak and the damage caused by
cyclone/storm. .................................................................................................................................................... 14
Figure 2. Crown-of-thorn starfish feeding on reef-building corals (AIMS, 2017). ............................................... 15
Figure 3. An illustration of coral bleaching (GBRMPA, 2016a). ......................................................................... 17
Figure 4. The impact of white syndrome on a coral colony in the Great Barrier Reef. Image from Australian
Institute of Marine Science (Hoff, 2007). ............................................................................................................ 18
Figure 5. Main summary of the findings from Report Card 2013 which illustrates the target set to be achieved
in 2013 and the actual achievements (Reef Plan, 2014b). The highlight is on the minimal nitrogen reduction of
10% in comparison to the aim set at 50%. .......................................................................................................... 36
Figure 6. The catchment regions in Great Barrier Reef (Australian Government, 2009). ................................... 39
Figure 7. The land use proportion in each catchment of Great Barrier Reef (Australian Government, 2009). .. 39
Figure 8. The production of NovacqTM.(Preston and Fitzgerald, 2013). .............................................................. 53
Figure 9. The process of water treatment system for the proposed Guthalungra prawn farm (Pacific Reef
Fisheries, 2014). .................................................................................................................................................. 55
Figure 10. The water quality data from the water treatment system proposed in the Guthalungra prawn farm.
This shows that the water discharged from Guthalungra prawn farm is potentially cleaner than the water
input even with 80.7 kg ha-1 yr-1nitrogen emission (Pacific Reef Fisheries, 2014). ............................................. 56
Figure 11. Cumulative loss of nitrogen emission (N kg/ha) based on conventional nitrogen application (Nfarm)
and nitrogen replacement strategy (Nrepl) (Webster et al., 2012) . .................................................................. 66
Figure 12. The percentage of the landholders' involvement with the voluntary sustainability and conservation
schemes (Lockie and Rockloff, 2005). ................................................................................................................. 74
Figure 13. Economic analysis of prawn aquaculture and sugarcane farming in QLD. ........................................ 86
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LIST OF TABLES
Table 1. The contribution of the GBR to the Australian economy (Deloitte Access Economics, 2013). The
tourism industry is the main component in the GBR contribution to the Australian economy. .......................... 13
Table 2. The regions identified for management priorities in GBR due to the high level of pollutant loads
(Queensland Government, 2015b). ..................................................................................................................... 20
Table 3. The total area and the nutrient total loads for the six NRM regions in the Great Barrier Reef (Hateley,
2014). As seen below, DIN load is highest in the Wet Tropics region. ................................................................ 21
Table 4. The total percentage of area and pollutant loads from each NRM region in the Great Barrier Reef
(Hateley, 2014). .................................................................................................................................................. 21
Table 5. The percentage of land area under sugarcane farms in the intensive agriculture of the GBR regions by
calculation from the data available in the Reef Plan report (First Report Card, 2009). ...................................... 22
Table 6. The development-related approval requirements before starting an aquaculture operation in
Queensland (Queensland Government, 2017). ................................................................................................... 28
Table 7. The non-development approval requirements before starting an aquaculture operation in Queensland
(Queensland Government, 2017). ....................................................................................................................... 29
Table 8.Guideline trigger values for water clarity and chlorophyll a targeted for diffuse pollutants. ................ 32
Table 9.Guideline trigger values for suspended solid (SS), particulate nitrogen (PN) and particulate phosphorus
(PP) targeted at diffuse pollutants. ..................................................................................................................... 32
Table 10. The collated data of pollutant loads onto the GBR regions from the 2009 baseline report (Reef Plan,
2015). Note the large dissolved nitrogen signature arising from the Wet Tropics region. ................................. 34
Table 11. The breakdown of diffuse-pollutant loads from each agricultural user in GBR regions based on the
2009 baseline report (Reef Plan, 2015). .............................................................................................................. 35
Table 12. The priority regions for reducing pollution in the GBR region (Brodie et al., 2013). ........................... 40
Table 13. The effluent discharge data from prawn aquaculture farms (ACIL, 2002) (note: units have been
converted to the same unit used by Jacobs SKM for ease of comparison). ........................................................ 41
Table 14. The various nitrogen management strategies utilized in the sugarcane industry in Australia
(Shroeder et al., 2009). ....................................................................................................................................... 46
Table 15. The guidelines for nitrogen application rates established from the mineralisation index of nitrogen
for the zones with approximated district yield potential of 120 tonne of cane per hectare (Schroeder et al.,
2005). .................................................................................................................................................................. 48
Table 16. The productivity and profitability of sugarcane cultivated using different nitrogen treatment in Tully
at three different sites in the Wet Tropics (Skocaj et al., 2012). ......................................................................... 50
Table 17. The technology advances made in the prawn aquaculture water treatment system has the potential
to reduce the nutrient level from the intake water (Pacific Reef Fisheries, 2014). ............................................. 55
Table 18. Summary of effluent emissions sourced from Table 7 of the Jacobs SKM benchmark study
(Erftemeijer, 2014). ............................................................................................................................................. 59
Table 19. The effluent discharge data from prawn aquaculture farms (ACIL, 2002) (note: units have been
converted to the same unit used by Jacobs SKM for ease of comparison). ........................................................ 59
Table 20. The effluent load data of prawn farms in Queensland extracted from the Jacobs SKM study
(Erftemeijer, 2014) (shown in Table 2 of the Jacobs SKM benchmark study). .................................................... 60
Table 21. The proposed modification to the prawn aquaculture nitrogen emission reported in the Jacobs SKM
study. .................................................................................................................................................................. 63
Table 22. Nutrient emission from sugarcane runoff based on the Jacobs SKM benchmark study (Erftemeijer,
2014). .................................................................................................................................................................. 65
Table 23. The nitrogen surplus based on the Webster et al., 2012 study which used either normal N application
rate or N replacement strategy. ......................................................................................................................... 66
Table 24 The total amount of nitrogen load from sugarcane farms in various GBR regions and drainage basins
based on the ACTFR report in 2007 (Brodie et al., 2007). ................................................................................... 67
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Table 25. The summary of nitrogen emission. a) The nitrogen emission reported in Jacobs SKM benchmark
study. b) The proposed modified nitrogen emission rates in this thesis. ............................................................ 70
Table 26. The policy structure available to increase the adoption of BMP by the landholders (Harvey et al.,
2014). .................................................................................................................................................................. 71
Table 27. The policy structure to control the water quality entering the GBR for the last 25 years as adapted
from the Technical Report RRD039 (a Reef Rescue R&D project) (Harvey et al., 2014). Yellow box: The
legislation for tighter control over nutrient management. Green box: The voluntary implementation of BMP to
replace regulatory control. ................................................................................................................................. 73
Table 28. The components of Reef Rescue program through the investment by the Australian Government
from 2008 to 2013 (Reef & Rainforest Research Centre, 2015). ......................................................................... 77
Table 29. An extrapolation of the overall contribution of suspended solids and nutrients where prawn farming
expands while the other industries remain static (ACIL, 2002).The ‘present ‘load refers to the size of prawn
farm of 500 ha. ................................................................................................................................................... 80
Table 30. The GVP of sugarcane in Queensland (Queensland Treasury, 2015). ................................................. 87
Table 31. Gross value by aquaculture sector in QLD ($ million) (Heidenreich, 2015). ........................................ 88
Table 32. The classification of 'ABCD' management framework for sugarcane farms (Grieken et al., 2010a). . 89
Table 33. The assumptions for the economic analysis for the transition of sugarcane farms in the ‘ABCD'
framework in the Wet Tropics region (Grieken et al., 2010b). ............................................................................ 89
Table 34. The capital costs to implement changes for the transition of the sugarcane farms management class
(Grieken et al., 2010b). ....................................................................................................................................... 90
Table 35. The regional NPVs calculated for a 120-ha sugarcane farm in the Wet Tropics as analysed by using
7% discount rate in Grieken (2010b). .................................................................................................................. 91
Table 36. The regional NPVs per hectare calculated for the 120-ha sugarcane farm in the Wet Tropics. ......... 91
Table 37. The yields based on different farming class management in the Wet Tropics (Grieken et al., 2010a).
............................................................................................................................................................................ 91
Table 38. The capital costs based on a prawn farm in Bowen-Burdekin for a 100ha farm. Data adapted from
the report for the prawn farm proposed in Bowen-Burdekin (Queensland Department of Primary Industries
and Fisheries, 2008). ........................................................................................................................................... 95
Table 39. The breakdown of the costs for marketing and processing of Penaeus monodon (Queensland
Department of Primary Industries and Fisheries, 2008). .................................................................................... 97
Table 40. The summary of the operation costs of 150 ha prawn aquaculture pond (Queensland Department of
Primary Industries and Fisheries, 2008). ............................................................................................................. 98
Table 41. NPV analysis for prawn farm using different discount rates under the base case. ............................. 99
Table 42. NPV analysis for prawn farm using different discount rates if costs increase by 20%. .................... 100
Table 43. The comparison of NPV when the cane land is used for transition into better class management or by
converting it to prawn aquaculture. ................................................................................................................. 101
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CHAPTER 1 Literature Review
1.1 The Great Barrier Reef The outstanding universal value of the Great Barrier Reef (GBR) has been recognized
internationally and it was inscribed as World Heritage Area in 1981 (Piggott-McKellar and
McNamara, 2016, UNESCO, 2012). One of the outstanding features of the GBR is its biodiversity:
it sustains the survival of many species and is the world’s most extensive coral reef ecosystem
(GBRMPA, 2014). For example, the GBR is the habitat for 411 species of hard corals, 3000 species
of molluscs, 1625 species of fish, 39 mangrove species and dugong (GBRMPA, 2014).
As a consequence of its status as biodiversity reserve, the contribution of the GBR to the
Australian economy was $5.68 billion in 2011 – 2012, providing approximately 69,000 full-time
equivalent jobs (Deloitte Access Economics, 2013). This shows that the GBR returns notably to
the Australian economy and is a significant regional employer. The economic contribution of the
GBR encompasses tourism, commercial fishing, scientific research and recreation (See Table 1).
Table 1. The contribution of the GBR to the Australian economy (Deloitte Access Economics, 2013). The tourism industry is the main component in the GBR contribution to the Australian economy.
Direct expenditure
($m)
Value-added
($m)
Employment
(FTE)
Tourism 6,410.6 5,175.6 64,338
Recreation 332.4 243.9 2,785
Commercial Fishing 192.5 160.3 975
Scientific research &
management 106.1 98.0 881
Total 7,041.5 5,677.8 68,978
Source: Deloitte Access Economics estimates
The continuation of Australia’s huge economic return on ‘investment’ in the GBR assumes that
the vast GBR retains its cachet as a global tourist hub. Unfortunately, over 2000 surveys of 214
reefs in the period of 1985 to 2012, revealed that the coral cover in GBR has declined significantly
from 28% to 13.8% which is a 50.7% of coral loss in the 27-year period (De’ath et al., 2012). While
UNESCO has not yet listed the GBRWHA as ‘in danger’, it is clear from published information that
the GBRWHA faces significant threats (Clark et al., 2016). The main contributors to the
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degradation of the GBR are crown of thorns starfish (COTS) outbreak (37%) and cyclone/storm
damage (34%) (Osborne et al., 2011). On the face of it there does not seem much that a nation
can do about cyclones or plagues of starfish but closer analysis shows that these supposed
‘natural’ threats are being influenced by human activities, which means that some level of
intervention may be possible.
1.2 The Main Threats to the Great Barrier Reef
Figure 1. The causes of coral mortality in the Great Barrier Reef (Osborne et al., 2011). The main threats to the coral reefs in the Great Barrier Reef are crown of thorn starfish outbreak and the damage caused by cyclone/storm.
1.2.1 Crown-of-thorn starfish (COTS) outbreak
COTS are among the largest species of starfish, Asteroidea (Lucas, 2013). Physically, the arms
comprise of ‘thorns’ which are covered with saponin toxin that are harmful to coral reefs (Lucas,
2013, Wooldridge and Brodie, 2015).
Crown of thorns starfish (COTS), 37%
Cyclone/storm damage, 34%
Coral disease, 7%Coral bleaching, 6%
Causes of Coral Mortality in Great Barrier Reef
Crown of thorns starfish (COTS) Cyclone/storm damage Coral disease Coral bleaching
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Figure 2. Crown-of-thorn starfish feeding on reef-building corals (AIMS, 2017).
The main cause of COTS outbreaks is an elevated level of dissolved inorganic nitrogen (DIN) (Furnas
et al., 2005). Specifically, the larvae of coral-eating COTS, scientifically described as Acanthaster
planci prey on nanophytoplankton and microphytoplankton which exist in environments with high
nutrient levels (Okaji et al.). It is noteworthy that around 80% of the total anthropogenic DIN load
originates from the use of fertiliser (Waterhouse et al., 2012). Furthermore, a study published in 2015
concluded that a reduction of at least 20-40% terrestrial runoff would be necessary in order to avoid
potential future COTS outbreaks in GBR (Wooldridge and Brodie, 2015).
The frequency of COTS outbreak increases when there is an elevated level of runoff containing
sediments, fertilizers and pesticides from the industries operating adjacent to the GBR (Brodie et al.,
2005). This is because the increased level of nutrients become the primary driver for the excessive
growth of the Acanthaster planci larvae (Brodie et al., 2005). Moreover, in another study conducted
by Fabricus et al 2010, focussing on the rapid expansion of COTS, it was discovered through three
types of evidence that the outbreak of COTS is primarily dependent on the phytoplankton level
(Fabricius et al., 2010). The results of the experiment revealed that a doubling in chlorophyll
concentrations lead to an approximately 8-fold increase in the number of Acanthaster planci larvae
(Fabricius et al., 2010).
Moreover, one of the latest studies published in 2015 by Woolridge & Brodie indicated that the
environmental triggers for COTS outbreaks are also related to the El Niño-Southern Oscillation (ENSO)
in which the hydrodynamic conditions lead to further fragmentation of the larvae (Wooldridge and
Brodie, 2015).
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1.2.2 Cyclone damage & Climate change
• Tropical cyclones
Tropical cyclones can lead to severe damage to the ecosystem such as a major disturbance to the
coral reefs and it may require decades for extensive recovery (Beeden et al., 2015). The Great Barrier
Reef Marine Park has been hit by 44 tropical cyclones since 1985 in which the gale force winds were
equivalent or more than 17 metres per second (Carrigan and Puotinen, 2011). The most significant
tropical cyclone that hit the GBR was tropical cyclone Yasi that caused extensive damage to the coral
reefs in just one day (Beeden et al., 2015).
The loss of corals from 1985 to 2012 were also driven by the wave damage due to the tropical
cyclones (De’ath et al., 2012). The three factors that determine the severity of the damage that the
tropical cyclones can cause are the intensity, the size of circulation and the time-lapse of the extreme
gale winds at the reefs (the ‘persistence’) (Beeden et al., 2015). The increasing ocean temperatures
may also lead to more intense cyclones as it is projected that greenhouse warming may lead to 2-
11% higher intensity of tropical cyclones by 2100 (Knutson et al., 2010).
• Climate change
The issue of climate change has been lingering for years globally and even in Australia as a slight
increase in sea temperature above historical levels would lead to devastating effect to the marine
ecosystem as seen lately (Cressey, 2016). The main cause of increased temperature would primarily
be due to the escalating greenhouse gasses emitted and the demand for energy sourced from fossil
fuel and coals (Cressey, 2016).
1.2.3 Coral bleaching
Coral bleaching takes place when the symbiotic relationship between the coral host and the tiny
marine algae (zooxanthellae) is disrupted through the elevation of sea temperature (Rowan, 2004).
This is because zooxanthellae provide energy for the corals’ growth and reproduction (van Oppen
and Gates, 2006). In the absence of the algae, the coral will turn into bright white skeleton as the
bleaching process leads to the starvation of the coral as illustrated in the following figure (GBRMPA,
2016a).
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Figure 3. An illustration of coral bleaching (GBRMPA, 2016a).
Coral bleaching has become one of the most pressing threats to the GBR reef health especially in the
current changing climate as coral bleaching events have increased in frequency and severity (Great
Barrier Reef Marine Park, 2013). Moreover, the latest report from GBRMPA dated 15 April 2016
stated that the bleaching event that is currently taking place this year is the worst in relative to the
events that have occurred previously in 2002 and 1998 (GBRMPA, 2016a, Cressey, 2016). This is
primarily due to the rise in ocean temperature driven by the effect of El Nino and global warming
that have caused overheating to the live corals (Woodford, 2016). In the bleaching process that
occurs at elevated temperature, the tiny photosynthetic algae (zooxanthellae), which are vital for
coral health are expelled and die. As algae contributes to the vibrant colour of the corals, the corals
are bleached. They may recover if there is a decrease in the temperature but can otherwise die if the
high temperature is sustained (Woodford, 2016).
In response to the serious coral bleaching event, the GBRMPA has established an initial response plan
for coral bleaching in 2002—which is now called the Risk and Impact Assessment Plan (Great Barrier
Reef Marine Park, 2013). The recent mass coral bleaching in 2016 has triggered the GBRMPA to
execute its highest level of response plan to the coral bleaching event especially in the northern reefs
(Great Barrier Reef Foundation, 2016). Under normal circumstances, the corals would usually
undergo a gradual recovery phase but additional stressors such as nutrient pollution of the seawater
18
from adjacent operating industries and the issue of climate change worsened the condition (Grech
et al., 2015).
1.2.4 Coral disease
According to the researchers of Australian Institute of Marine Science (AIMS), coral diseases
represent 6.5% of coral deaths in the Great Barrier Reef from 1995 to 2009 (GBRMPA, 2016b).
There are seven diseases associated with corals in the GBR but the ones that can spread faster and
cause substantial mortality are the White syndromes, Black band disease and the Brown band disease
(GBRMPA, 2016b).
Lately, the association of the coral diseases such as White syndrome and Black band disease with
climate change is unavoidable as there have been many studies that associate the rise in temperature
with the increasing frequencies of coral diseases (Bruno et al., 2007, Hayes et al., 2001, Harvell et al.,
1999).
A study done in 2007 revealed that warm temperature anomalies are one of the factors linked to the
higher occurrences of coral disease seen in the GBR (Bruno et al., 2007). Through the utilization of
the high-resolution dataset of monitoring the temperature of the ocean and the use of annual
surveys of the 48 reefs, it was concluded that the increase in temperature aggravates the corals
susceptibility to White syndrome particularly at the location with high coral cover (Bruno et al., 2007,
Hoff, 2007).
Figure 4. The impact of white syndrome on a coral colony in the Great Barrier Reef. Image from Australian Institute of Marine Science (Hoff, 2007).
19
1.3 Addressing these major threats to the Great Barrier Reef
As aforementioned, the threats to the coral reefs are interconnected, with each factor increasing the
vulnerability of the GBR to the other factor. For example, the onset of warmer temperatures would
potentially lead to an increased frequency of coral diseases, a rise in the COTS spread, and also
triggers episodes of coral bleaching. However, I assert that the primary difference between all of the
aforementioned threats is the two categories into which they can be classified. The categories are
those caused by human activities or those due to natural calamities.
The threats which are primarily driven by human activities are basically the COTS outbreaks and
climate change—the increase in temperature being due to the elevation of greenhouse gas
emissions. COTS and climate change (elevated temperature) represent the top threats to the GBR
health and they are caused by human activities which can be directly monitored and controlled (albeit
in vastly different time frames) by proper regulations in place.
Unfortunately the research review entitled “Towards protecting the Great Barrier Reef from land-
based pollution” found that the current regulatory implementation for the protection of GBR is
insufficient to reach the goal set for reductions in water pollution by 2020 (Kroon et al., 2016). The
ineffectiveness of the current regulatory framework for the GBR agricultural industries was also
reflected in the findings obtained from the Report Card 2013 of the Reef Plan (Reef Plan, 2014b). For
example, the report results showed that the proportion of sugarcane growers, the major source of
DIN, that adopted best management practices (BMP) from 2009-2013 was approximately 50%, which
differs from the target set at 80% (Reef Plan, 2014b). In addition, even with half of the sugarcane
growers adopting the BMPs, the reduction of nitrogen was reported to be only 10% which was very
low relative to the goal set at 50% nitrogen reduction by 2013 (Reef Plan, 2014b).
The inability to construct a more comprehensive and effective regulatory framework for the main
pollutant contributors in the GBR has led the deterioration go unchecked, both in the percentage of
healthy coral coverage and in reduced resilience (ability to rebound from adverse events).
Furthermore, the cumulative impact of all the stressors to GBR has to be precisely analysed and a
simulation of the effect of all the stressors on the reef health condition should be carried out. It is
vital to ensure the cumulative stress is reduced as to build the resilience of the already ill coral reefs
such as through minimizing the pollutant runoff from agricultural industries (Nyström et al., 2008).
Following the exploration of the major threats to the GBR, it is crucially important from the point of
view of implementation of change, to investigate the source and location of the main ‘controllable’
20
threats to the health of the GBR corals, for example, the region with the most concentrated pollutant
load.
1.4 Targeting the region which is highly associated with the highest pollutant load to
the GBR
Based on the 2014 Reef Plan report card, the management priority remains to control the nitrogen
from sugarcane and the erosion issue from grazing (Reef Plan, 2014a). The highest overall relative
risk region is the Wet Tropics which covers 22,000 km2 and the primary issue for this region is the
nitrogen emission mainly from the sugarcane farming and fertiliser use (Reef Plan, 2014a).
Table 2. The regions identified for management priorities in GBR due to the high level of pollutant loads (Queensland Government, 2015b).
Furthermore, the largest single source of the total DIN loads released to the GBR are mostly sourced
from sugarcane farming which accounts for 42% whereas grazing accounts for 9% of DIN (Hateley,
2014).
To have an overview on the overall loads of DIN and the total area of NRM (Natural Resource
Management) regions, entails consideration of the following data sourced from the Technical Report
21
prepared by the Department of Natural Resource and Mines in 2014 as part of the Reef Water Quality
Protection Plan 2013 (Hateley, 2014).
Table 3. The total area and the nutrient total loads for the six NRM regions in the Great Barrier Reef (Hateley, 2014). As seen below, DIN load is highest in the Wet Tropics region.
Table 4. The total percentage of area and pollutant loads from each NRM region in the Great Barrier Reef (Hateley, 2014).
It is imperative to note that different NRM regions yield different loads of nutrient to the GBR. For
example, Table 3 above illustrates that the Wet Tropics region area is 21,722 km2 and contributes
4,437 tonne of DIN per year. As depicted in Table 4, this is equivalent to the enormous percentage of
42.1% of the total DIN loads to the GBR while only constituting 5.1% of the area in the GBR catchment
(Hateley, 2014).
22
This reveals that in order to see the much sought after improvement in the health of the reef in the
GBR, it will be crucial that the Wet Tropics region is effectively managed, because this relatively small
proportion of land contributes to almost half of the total DIN load in the GBR.
Therefore, it is critical to ensure the focus is directed to the major land use in the Wet Tropics such
as intensive agriculture that contributes to the majority of the DIN load to the GBR.
The data below provides a summary of land use (by area) of the Wet Tropics region in general
(Hateley, 2014).
• Nature conservation (also includes forestry) 51%
• Grazing 33%
• Intensive agriculture 10%
(88.6% of intensive agriculture covered by
sugarcane industry as shown in the following table)
The following table provides a further breakdown of the land use by sugarcane farming in the six
NRM regions adjacent to the GBR based on data collated from the Reef Plan report (First Report Card,
2009). The table below shows that the land area of intensive agriculture covered by sugarcane farms
equates to 88.6% in the Wet Tropics.
Table 5. The percentage of land area under sugarcane farms in the intensive agriculture of the GBR regions by calculation
from the data available in the Reef Plan report (First Report Card, 2009).
Region
Land farmed
(km²)
Land for sugarcane
(km²)
Sugarcane farm
percentage (%)
Cape York 30 0 0
Wet Tropics 2198 1947 88.6
Burdekin 129217 1061 0.82
Mackay Whitsunday 1686 1674 99.29
Fitzroy 123058 0 0
Burnett Mary 1159 968 83.52
Natural Decisions Pty Ltd was engaged by the Terrain NRM to develop a plan to improve the water
quality in the Wet Tropics. The plan development involved the use of the Investment Framework for
Environmental Resources (INFFER), which is one of the means available to assist decision makers on
23
environmental issues which encompasses water quality and land degradation (Park and Roberts,
2014). Significantly, the INFFER reported that sugarcane alone is a major contributor to the nutrient
loads from the agricultural runoff (Park and Roberts, 2014). Furthermore, a study completed in 2014
concluded that the total DIN load originates from sugarcane (41%) followed by grazing (9%) (Hateley,
2014). It was postulated that the river basins in the Wet Tropics region are the major contributors of
DIN load to the GBR (Brodie et al., 2014). Deductively, DIN is largely contributed by sugarcane farming
due to the use of fertiliser (Park and Roberts, 2014). The highlighted nutrient in this part of thesis is
DIN, as this pollutant is widely known for its primary contribution to the COTS outbreaks that cause
the reef degradation in the GBR (Webster et al., 2012, Furnas et al., 2005). This fact is also widely
acknowledged by the Department of the Environment of the Australian Government by linking the
elevated nutrient levels such as nitrogen with the growth of algae and the outbreaks of COTS
(Department of the Environment).
1.5 Conclusions
1.5.1 Research objectives
• To help strengthen the resilience of the GBR
The main aim of this research is to suggest a strategy to help GBR build its resilience to overcome
stressors as discussed previously. Since the Wet Tropics is the main region that contributes to the
massive nutrient loads on the GBR and the pollutant yield per area was the highest for Wet Tropics
and Whitsundays regions (that are farmed mainly for sugarcane and other intensive activities (Joo et
al., 2012, Kroon, 2012)), replacement of certain hectares of sugarcane farms in Wet Tropics with
another industry such as prawn aquaculture, is worthy of consideration.
• To explore the potential benefits of converting a certain proportion of sugarcane farms with
another industry, by investigating the environmental impact and financial returns of both
industries.
An innovative approach such as replacement of some of the sugarcane industry in certain regions
with a cleaner, more sustainable industry, with higher economic returns is worthy of consideration.
This is because it is evident that the transaction and opportunity costs are too expensive for the
adoption of BMP by the sugarcane landholders and the study has also illustrated that this is one of
the major reasons why the voluntary approach has failed so far (Pannell et al., 2006). Further
24
injections of monetary incentives to increase the uptake of BMP adoption is likely to be an inefficient
and relatively unproductive allocation of funds.
One of the factors that encourages the conversion of land use from sugar cane to prawn aquaculture
is that the type of land occupied by these two industries is similar which includes flat and low lying
coastal land (QCA, 2014). Furthermore, this is in accordance with the recommendation made by the
GBR Water Science Taskforce in its report in 2015 which suggests that there is a need for new
technology, innovation and diversification or transformation in land use. This is because it was
concluded that even if all the sugarcane landholders and the graziers adopted the class A of BMP, the
target set to achieve in the Reef Plan is still not achievable (Great Barrier Reef Water Science
Taskforce, 2015). On the other hand, any strategy involving disruptive change will be complicated by
the large number of individual landholders, start-up costs and the steep learning curve involved for
existing farmers which warrants a detailed study on the transaction costs involved.
• To investigate the current legislation passed that is relevant to both industries operating
adjacent to the GBR.
As seen from the Reef Plan report, the target set to be achieved in 2013 was not met, as the results
showed that the BMP adoption rate was not rapid enough. Furthermore, the nitrogen reduction rate
was very low (10%) compared to the target that had been set at 50% reduction by 2013 (Reef Plan,
2014b). A thorough evaluation on why such results were obtained is necessary before a further target
or plan is established in order to ensure there is a progressive improvement. I assert that this issue is
important to be investigated because it is essential to gauge the success, or lack of success, of the
current regulatory framework imposed on the sugarcane farming. Thus, this assists in projecting any
possibilities of failure of the BMP implementation and whether any other actions are necessary to
compensate the insufficient or ineffective regulatory system.
The benefits of this analysis will potentially shed light on whether the main strategy adopted in the
current Reef Plan is worth continuing, and whether other interventions are needed to produce more
desirable results.
• To investigate the obstacles faced by an emerging industry such as prawn aquaculture in
operating adjacent to GBR
One of the issues faced by the Queensland government is to decide on regulatory reform of
aquaculture in Queensland. In view of the absence of new prawn farm development approved in the
25
last decade (ABC, 2014), the Queensland Competition Authority (QCA) was instructed by the
government to investigate further on this issue. As GBR is a World’s Heritage Area, the location of
aquaculture adjacent to GBR is covered by Commonwealth legislation which leads to regulatory
complexities (CIE, 2014).
Therefore, this thesis is entitled ‘An investigation of the potential economic and environmental
benefits of expanding prawn aquaculture in Queensland and reassessment of anomalies in the
existing regulatory framework’ in order to contribute to filling in the current knowledge gaps and
proposing possible alternatives as to contribute in the effort of strengthening the resilience of the
GBR.
1.5.2 Scope of the research
The scope of this research encompasses analysis of the data released by government agencies, such as
reports from the Queensland Competition Authority (QCA), peer reviewed scientific journal articles on
various research projects completed involving the GBR and a close assessment of the legislation
currently applicable to aquaculture and other agricultural industries in Queensland. Several direct
inquiries were also made to the author of the Jacobs SKM benchmark study report, Dr Paul Erftemeijer,
in checking the validity of certain data used in this thesis. Another inquiry was also made to an
anonymous economist from Economic Research Service, Department of Agriculture, Government of
the United States, for further clarification on the environmental impact of different types of pollution;
point source and diffuse source pollution.
26
CHAPTER 2 Review on the Regulatory Environment of the Great Barrier
Reef and the Primary Industries Operating Adjacent to the Area
2.1 Overview of regulatory environment in Great Barrier Reef
The Great Barrier Reef Marine Park (GBRMP) is one of the world’s largest marine park heritage areas
and to ensure its effective protection, Australia has enacted strong legislation that render it one of
the most safeguarded marine areas in the world (Reef Water Quality Protection Plan, 2013). Hence,
any agricultural development adjacent to the GBR goes through more stringent regulatory review
and faces more impediments stemming from the laws associated with GBR protection than any other
regions in Australia (CIE, 2013, Queensland Government, 2016b).
One of the main acts concerning the protection of national heritage is the Environment Protection
and Biodiversity Conservation Act 1999 (EPBC Act) (Department of Environment, 2015). There was
an amendment made to the principal agreement in relation to the environment between the
Commonwealth and the state of Queensland under section 45 of the EPBC Act 1999. The amendment
was aimed at streamlining and to eliminate duplication of environmental evaluation and approvals.
Through this amendment, the assessment by the State of Queensland is accredited and this enables
the Commonwealth to rely on Queensland law for the environmental evaluation process
(Department of Environment, 2015).
Another piece of legislation specifically tailored to GBRMP protection is the Great Barrier Reef
Marine Park Act 1975 (GBRMPA, n.d.). This is the primary Act that allows the establishment of the
Commonwealth-level management authority, the Great Barrier Reef Marine Park Authority
(GBRMPA), for the purpose of managing the Marine Park. This act comprises an assessment regime
which includes the appointment of powers for the inspectors selected and in determining the
enforcement mechanisms (GBRMPA, n.d.). However, the implications of this act raised concerns from
several parties given the veto power held by the GBRMPA in determining the approval of a proposed
development such as aquaculture. Quoting Helen Jenkins in Australian Prawn Farmers Association
(APFA)’s additional comments to the Pivot North final paper in November 2014, “The ‘elephant in the
room’ that will inhibit aquaculture development in the North of Queensland will continue to be the
Commonwealth agencies GBRMPA/SEWPAC who can veto any decision granted for development
under state bilateral agreements and have the ability to turn on or off aquaculture regulations as
confirmed relevant State authorities” (Jenkins, 2014).
27
This shows that the GBRMPA is the final decider for any development proposed to be operated
adjacent to the GBR and the establishment of GBRMPA in 1975 was in the effort to safeguard the
GBR from further degradation. GBRMPA’s function and the Reef Plan establishment in managing the
GBR’s condition are undeniable but a question that may be raised is ‘Why has the GBR coral cover
reduced to an appalling 20-30% (Brodie and Waterhouse, 2012), even though the strong science-for-
management ethic by the GBRMPA and the highly-costed Reef Plan have been established to function
as the GBR’s guardians?’. This remains an area that this thesis aims to further analyse which involves
a case study of the management bodies in protecting and guarding the GBR.
2.2 Point source pollutant
2.2.1 Regulations specifically aimed at aquaculture operation
Under the Great Barrier Reef Marine Park Act 1975, a legislation explicitly aimed at aquaculture was
prepared, namely the Great Barrier Reef Marine Park (Aquaculture) Regulations 2000 (GBRMPA,
n.d.). This legislation contains the regulations pertaining to the waste discharge from aquaculture
activities that may have an adverse impact towards the flora and fauna in the Great Barrier Reef
Marine Park (GBRMPA, n.d.). Under this legislation, Queensland law may be accredited by the
Minister of Queensland only if there is a proposal for the law accreditation with sufficient information
on how the Queensland law is able to demonstrate essential protection towards the Marine Park
(GBRMPA, n.d.). In addition, this legislation requires permit application from the GBRMPA for prawn
farms proposed after 1st October 1999 that are bigger than 5 hectares (Department of Environment
and Heritage Protection, 2013).
According to the Queensland Department of Agriculture and Fisheries (DAF), aquaculture is regulated
at every level of government which includes the local council, state and federal government
(Department of Agriculture and Fisheries, 2015). Various approval applications are required in which
every approval is evaluated under the Fisheries Act 1994 by Fisheries Queensland (Department of
Agriculture and Fisheries, 2015). A summary of the regulatory framework is as shown in Tables 6 and
7.
28
Table 6. The development-related approval requirements before starting an aquaculture operation in Queensland (Queensland Government, 2017).
Activity Approval type Legislation Assessing agency
Development-related
Self-assessable aquaculture (complies with Code AQUA01)
None if it complies with the code
Sustainable Planning Act 2009
No assessment if complies with the code
Assessable aquaculture development (outside scope of Code AQUA01)
Development approval for material change of use for aquaculture
Sustainable Planning Act 2009
Fisheries Queensland
• Biosecurity
• Aquatic health
• Fish habitats
Assessable aquaculture development (outside scope of Code AQUA01)
Development approval for material change of use for aquaculture
Sustainable Planning Act 2009
Department of Environment and Heritage Protection (EHP)
• General environmental protection
• Effluent discharge
Assessable aquaculture development (outside scope of Code AQUA01)
Development approval for material change of use for aquaculture
Sustainable Planning Act 2009
EHP
• Water extraction in freshwater areas
Marine plant removal for farm maintenance (complies with Code MP03)
None if it complies with the code
Sustainable Planning Act 2009
No assessment if complies with the code
Marine plant removal (outside scope of Code MP03)
Development approval for operational works
Sustainable Planning Act 2009
Fisheries Queensland
• Fish habitats
Marine plant removal (outside scope of Code MP03)
Development approval for operational works
Sustainable Planning Act 2009
EHP
• General environmental protection
• Vegetation clearing
29
Table 7. The non-development approval requirements before starting an aquaculture operation in Queensland (Queensland Government, 2017).
Non-development related
Activity Approval type Legislation Assessing agency
Collection of regulated species from the wild
Fishing licence General fisheries permit (GFP)
Fisheries Act 1994 Fisheries Queensland
Collection of regulated species from the wild
Permit for take of protected species
Environmental Protection and Biodiversity Conservation Act 1999
Commonwealth Department of the Environment and Energy
Collection of regulated species from the wild
Permit for take of protected species
Great Barrier Reef Marine Park Act 1975
GBRMPA
Purchase of broodstock from licensed commercial fishers
Docket of sale Fisheries Act 1994 Fisheries Queensland
Translocation of aquatic animals into Queensland from other states
Translocation approval
Fisheries Act 1994 Fisheries Queensland
Importation of aquatic animals from outside Australia
Import permit Quarantine Act 1908 Department of Agriculture and Water Resources
Food safety (if product is for human consumption)
Compliance with Food Safety Program
Food Act 2006, Food Production (Safety) Act 2000
Safe Food Queensland Queensland Health
Stocking of public dams and impoundments
General fisheries permit (GFP)
Fisheries Act 1994 Fisheries Queensland
30
2.2.2 Zero net nutrient discharge requirement
The absence of new prawn farms approved in Queensland in the last decade is highly related to the
restrictive regulations associated with aquaculture (CIE, 2013). This is largely due to the ‘zero net
nutrient discharge’ requirement enforced in 2008 by SEWPAC/GBRMPA that indirectly bans any new
development of shrimp farms adjacent to the GBR (CIE, 2013). The net zero nutrient load
requirement by the Queensland Environmental Protection Agency (EPA) acts as the primary barrier
for any new prawn aquaculture project (Department of Infrastructure and Planning, 2008). Research
conducted by CSIRO illustrated that prawn aquaculture farms in Australia were already highly
regulated and on par with world best practice discharge water quality even prior to the enforcement
of this new requirement (CSIRO, 2002). Consultants have also reported that although this new
requirement can be met with the use of cutting edge technology, it is highly unlikely to be
economically achievable (CIE, 2013).
2.2.3 Operational Policy for Marine Prawn Aquaculture in Queensland
Under the Environmental Protection Act 1994, the Queensland Department of Environment and
Heritage Protection is the managing authority and it has established an operational policy for prawn
aquaculture in Queensland (Department of Environment and Heritage Protection, 2013). This policy
was first approved in May 2001 and the main objectives of this policy are to standardise the
wastewater discharge for existing prawn farms and to construct programs to monitor and evaluate
the performance of each farm. However, this policy is not applicable to facilities which have used
innovative management techniques or new implementation such as zero nutrient discharge and total
recycling (Department of Environment and Heritage Protection, 2013).
This policy is related to several other regulations namely the GBRMP (Aquaculture) Regulation 2000,
Fisheries Act 1994 and EPBC Act 1999. The Fisheries Act 1999 also requires farms to obtain permits
from DAF (Department of Environment and Heritage Protection, 2013).
The licensing criteria set in this policy pertaining to wastewater discharge were based on the work
done by Cooperative Research Centre for Aquaculture (CRC) (Department of Environment and
Heritage Protection, 2013). Based on this policy, the maximum net discharged values for total
suspended solids, nitrogen and phosphorus are 75 mg L-1, 3.0 mg L-1 and 0.40 mg L-1 respectively
(Department of Environment and Heritage Protection, 2013).
31
2.3 Diffuse source pollutants
2.3.1 Regulations imposed on cattle grazing and sugarcane farming for reef protection
The excessive use of fertiliser, pesticides and suspended solids from cattle grazing and sugarcane
farming have been reported to contribute significant amount of diffuse source pollutants into the
GBR lagoon (Queensland Government, 2015a). To safeguard the GBR, several pieces of legislation
including the Environmental Protection Act 1994 and the Chemical Usage Act 1988 were passed
(Queensland Government, 2015a). These regulations require the cane farmers in the Burdekin,
Mackay Whitsunday and Wet Tropics catchments to record their fertilisers use and manage the
nutrients released properly by calculating the required amount of fertiliser (nitrogen and
phosphorus) (Queensland Government, 2015a). Furthermore, specified qualifications are required
for the sugarcane growers and cattle graziers for the handling, preparing, applying, transporting and
storing of chemicals. The use of herbicides also subject to certain requirements for sugarcane
growers in Wet Tropics, Burdekin and Mackay Whitsunday catchments (Queensland Government,
2015a).
Sugarcane farmers and graziers are encouraged to adopt the voluntary Smartcane BMP and Grazing
BMP (Queensland Government, 2015a). Through the BMPs, consistent reporting in regard to the
industry progress towards the water quality targets outlined in the Reef Plan is expected. After the
execution of BMPs, the need for regulation enforcement will be considered by the Queensland
government (Queensland Audit Office, 2015). It is noteworthy that the BMP implementation is only
through voluntary code of practice.
2.3.2 Reef Plan and GBRMPA Water Quality Guidelines
Various studies revealed that cropping activity such as large-scale sugarcane cultivation leads to a
significant amount of nutrient runoff (Bainbridge et al., 2009, Webster et al., 2012). Furthermore, it
has been postulated that the high level of suspended solids are mainly contributed by grazing and
cropping (Packett et al., 2009). Realizing the increasing detrimental effect of poor quality water to
reef health, the Reef Plan was initiated in 2003 through Australian and Queensland collaboration to
help addressing this major concern by monitoring the runoffs from the land use types in reef
catchments. The long term objective of the Reef Plan development is to ensure that the water
entering the GBR to be of safe quality and harmless to reef resilience by 2020 through better
management practice of the land holders in reef catchments (Reef Plan, 2014a).
The Reef Plan is specifically targeted at controlling diffuse source pollution by agriculture activities
(Reef Plan, 2014a). One of the main targets set to be achieved by 2018 is to ensure that 90% of
32
sugarcane, grazing, horticulture and cropping are carried out with best management practices
(BMPs) in the prioritized areas (Reef Plan, 2014a).
Tables 8 and 9 depict the water quality guidelines set by the GBRMPA Water Quality Guidelines 2010
for diffuse pollutants (GBRMPA, 2010). The GBRMPA focuses on determining the allowable diffuse
pollutant loads toward to the GBR lagoon. According to the findings from the Reef Plan, the diffuse
pollutants are the main source of anthropogenic contaminants (GBRMPA, 2010). The allowable
diffuse pollutant loads into the GBR for chlorophyll a, suspended solids, particulate nitrogen and
particulate phosphorus are 0.45 µg L-1, 2.0 mg L-1 , 20 µg L-1 and 2.8 µg L-1 respectively in the open
coastal and midshelf sections of the reef as shown below (GBRMPA, 2010).
Table 8.Guideline trigger values for water clarity and chlorophyll a targeted for diffuse pollutants.
Sourced from GBRMPA Water Quality Guidelines 2010 (GBRMPA, 2010).
Table 9.Guideline trigger values for suspended solid (SS), particulate nitrogen (PN) and particulate phosphorus (PP) targeted at diffuse pollutants.
Sourced from GBRMPA Water Quality Guidelines 2010 (GBRMPA, 2010).
33
2.4 Review on the Current Monitoring System and Agricultural Industries in the Great
Barrier Reef
Progressive monitoring of the GBR condition
2.4.1 Reef Plan 2003
Although the GBRMPA was established in 1975, a more proactive initiative to start a plan for
protecting the GBR started in 2003 with the initial establishment of the Reef Water Quality Protection
Plan or also known as the Reef Plan. The objective of this plan was to address pollutants from diffuse
sources of broad scale land use (Queensland Government, 2003). Diffuse sources of pollution
generally enter the waterways from various sources which are not attributed to one point of dispersal
(e.g pipe). The Reef Plan was then updated in 2009 in order to produce a baseline record of the
pollutant loads (Reef Plan, 2015). The Reef Plan was again updated in 2013 to report on the findings
on the conditions of the GBR by making a comparison with the initial readings recorded in 2009
baseline report (Reef Plan, 2014b).
2.4.2 First Report Card 2009 Baseline
In order to monitor the water quality progress in the GBR waters, the First Report Card of baseline in
2009 was created to serve as the starting position of all the effluent targets to be achieved in the
Reef Plan (Reef Plan, 2015).
Overall, there were some improvements of GBR water quality in comparison to its condition in 2003.
However, some of the discoveries revealed that there were still some areas of concern and were
highlighted in the main findings. One of the main findings reported was that the amount of dissolved
nitrogen was found to be 31,000 tonnes which suggests excessive use of fertiliser (as shown in Table
10). Moreover, around 28 tonnes of pesticides was reported to enter the reef per year (Reef Plan,
2015).
34
Table 10. The collated data of pollutant loads onto the GBR regions from the 2009 baseline report (Reef Plan,
2015). Note the large dissolved nitrogen signature arising from the Wet Tropics region.
The detailed diffuse-pollutant loads from each agricultural user in GBR regions based on the 2009
baseline report are shown in Table 11 and the main agricultural user in the Wet Tropics region is the
sugarcane farming.
To achieve the targets set in the Reef Plan, a comparison of current reef condition with pre-European
conditions would be necessary to gauge the natural optimal level of the pollutants in order to proetct
the water quality. The estimation of pre-European conditions was done mainly through SedNet
modelling in a study by Brodie et al (2010) to approximate the mean annual contaminant loads.
Region
Catchment/
km² Landholders
Land farmed /
km²
Suspended solids
per
annum/tonnes
Total
Nitrogen/
tonnes
Dissolved
Nitrogen/
tonnes
Total
Phosphorus/
tonnes
Dissovled
Phosphorus
load/ tonnes
Photosystem
inhibiting (PSII)
pesticides kg's
Cape York 43,000 30 30 2,000,000 14,000 5,500 1,500
Wet Tropics 22,000 1857 2198 1,400,000 16,000 11,000 2,000 530 10,000
Burdekin 140,000 1676 129217 4,700,000 14,000 5,700 2,600 430 4,900
Mackay Whitsunday 9,000 1352 1686 1,500,000 8,100 3,300 2,200 370 10,000
Fitzroy 156,000 3697 123058 4,100,000 15,000 2,700 4,100 245 2,300
Burnett Mary 53,000 1027 1159 3,100,000 13,000 2,800 3,100 350 990
TOTALS 423,000 9639 257348 16,800,000 80,100 31,000 15,500 1,925 28,190(Data collected from GBR baseline
report 2009)
35
Table 11. The breakdown of diffuse-pollutant loads from each agricultural user in GBR regions based on the 2009 baseline report (Reef Plan, 2015).
Cape York Landholders
Land farmed
(km²)
Suspended solids per
annum Total nitrogen Dissolved Nitrogen Total Phosphorus Dissolved phosphorus load
Photosystem
inhibiting (PSII)
pesticide Pesticides include
Catchment covers:
43k km²
2.4 million tonnes (1.9
million tonnes are from
human activity)
14,000 tonnes (11,000
tonnes are from human
activity)
5,500 tonnes of which
2,700 tonnes is from
human activity
1,500 tonnes of which
1,100 tonnes are from
human activity
No info due to lack
of monitoring
Horticulture 30 30
Wet Tropics Landholders
Land farmed
(km²)
Suspended solids per
annum Total nitrogen Dissolved Nitrogen Total Phosphorus Dissolved phosphorus load
Photosystem
inhibiting (PSII)
pesticide Pesticides include
Catchment covers:
22k km²
1.4 million tonnes (1.1
million tonnes are from
human activity)
16,000 tonnes (11,000
tonnes are from human
activity)
11,000 tonnes of which
6,300 tonnes is from
human activity
2,000 tonnes per year
of which 1,500 tonees
is from human activity
530 tonnes of which 230
tonnes is from human
activity 10,000 kg per year
duiron, atrazine,
hexazinone,
simazine,
tebuthiuron
Sugarcane 1527 1947
Horticulture 330 251
Burdekin Landholders
Land farmed
(km²)
Suspended solids per
annum Total nitrogen Dissolved Nitrogen Total Phosphorus Dissolved phosphorus load
Photosystem
inhibiting (PSII)
pesticide Pesticides include
Catchment covers:
141k km²
4.7 million tonnes (4.1
million tonnes are from
human activity)
14,000 tonnes (11,000
tonnes are from human
activity)
5,700 tonnes of which
3,500 tonnes are from
human activity
2,600 tonnes of which
2,200 tonnes are from
human activity
430 tonnes of which 300
tonnes are from human
activity 4,900 kg per year
duiron, atrazine,
hexazinone,
ametryn
Sugarcane 657 1061
Grazing 827 128,000
Horticulture 192 156
Mackay W. Landholders
Land farmed
(km²)
Suspended solids per
annum Total nitrogen Dissolved Nitrogen Total Phosphorus Dissolved phosphorus load
Photosystem
inhibiting (PSII)
pesticide Pesticides include
Catchment covers:
9k km²
1.5 million tonnes (1.3
million tonnes are from
human activity)
8,100 tonnes (7,200
tonnes are from human
activity)
3,300 tonnes of which
2,500 tonnes are from
human activity
2,200 tonnes of which
2,000 tonnes are from
human activity
370 tonnes of which 310
tonnes are from human
activity 10,000 kg per year
duiron, atrazine,
hexazinone,
ametryn
Sugarcane 1320 1674
Horticulture 32 12
Fitzroy Landholders
Land farmed
(km²)
Suspended solids per
annum Total nitrogen Dissolved Nitrogen Total Phosphorus Dissolved phosphorus load
Photosystem
inhibiting (PSII)
pesticide Pesticides include
Catchment covers:
156k km²
4.1 million tonnes (2.9
million tonnes are from
human activity)
15,000 tonnes (13,000
tonnes are from human
activity) (particulate
nitrogen 12,000 tonnes)
2,700 tonnes of which
1,100 tonnes are from
human activity
4,100 tonnes of which
3,900 tonnes are from
human activity
245 tonnes of which 154
tonnes are from human
activity 2,300 kg per year
Sugarcane
Grazing 3591 123,000
Horticulture 106 58
Burnett Mary Landholders
Land farmed
(km²) Suspended solids per annumTotal nitrogen Dissolved Nitrogen Total Phosphorus Dissolved phosphorus load
Photosystem
inhibiting (PSII)
pesticide Pesticides include
Catchment covers:
53k km²
3.1 millin tonnes (2.8
million tonnes are from
human activities)
13,000 tonnes (12,000
tonnes are from human
activity)
2,800 tonnes of which
1,400 tonnes are from
human activity
3,100 tonnes of which
2,900 tonnes are from
human activity
350 tonnes of which 258
tonnes are from human
activity 990 kg per year
Sugarcane 747 968
Horticulture 280 191
36
2.4.3 Report Card 2013 – Reef Water Quality Protection Plan
To further evaluate the progress towards the targets set in the baseline Report Card in 2009, the
Report Card 2013 was published by the Reef Water Quality Protection Plan Secretariat (Queensland
Department of Heritage and Protection) to document changes in water quality. The main highlights
obtained from the Report Card 2013 were, firstly, that there was a reduction in the pollutant loads
flowing into the reef, and, secondly that high percentage of landholders were adopting improved
management practices, however, there were still some areas of concern regarding the level of
pollutant loads (Reef Plan, 2014b). The aim to reach a 50% reduction in nitrogen waste by the year
2013 was not met as there was only a 10% reduction reported, even though almost half of the total
sugarcane farmers in the GBR catchment had adopted the improved management practices shown in
Figure 4 below (Reef Plan, 2014b). It is important to note that a study done between 2006-2009 by
the then Department of Environment and Resource Management, Queensland, revealed that the
pollutant yield per area was the highest for Wet Tropics and Whitsundays region that were mainly
farmed for sugarcane and other intensive activities (Joo et al., 2012, Kroon, 2012).
Drawing from the aforementioned data, it remains an area of concern as a continuous adoption of
improved management practice by the sugarcane farmers may not reduce the level of nitrogen waste
as expected after a certain threshold point. This may present uncertainties in achieving the goals set
for the Reef Plan 2020 and in expecting significant reduction in nitrogen waste entering the reef as
the adoption of improved management practice by a large number of sugarcane farmers did not bring
about proportionate improvements in the pollutant release.
Figure 5. Main summary of the findings from Report Card 2013 which illustrates the target set to be achieved in 2013 and the actual achievements (Reef Plan, 2014b). The highlight is on the minimal nitrogen reduction of 10% in comparison to the aim set at 50%.
Furthermore, according to the Scientific Consensus Statement made by the key scientists
commissioned in 2013, although there is a reduction in the pollutant loads to GBR since the last
Consensus Statement in 2008, there is still poor quality of water discharged from the catchment areas
37
in multiple regions (Reef Plan, 2014b). Therefore, it is crucial to have an in-depth understanding of the
main land-based runoffs that contribute to the ill effect on the reef which will be discussed in the next
section of this review.
2.5 Effluent loads
2.5.1 Effluent loads from diffuse source pollutants
Diffuse sources of pollutants, such as from sugarcane farming, grazing and forestry are harder to
measure and evaluate in comparison to point sources of pollutants such as from shrimp aquaculture,
as pointed out by the benchmark study done by Jacobs SKM (Erftemeijer, 2014). This benchmark study
was completed as contracted by QCA in the effort of Queensland Government to decide on regulatory
reform for aquaculture in Queensland (Erftemeijer, 2014). Further analysis on this benchmark study
is discussed in next chapter of this thesis. Table 11 comprises the main agricultural users in GBR region
which produce diffuse source of pollutants based on GBR 2009 baseline report. However, the
contribution of each agricultural activity with the specific amount of each pollutant type is not
documented in the report as diffuse pollutants are harder to measure precisely. For example, in the
region of Wet Tropics of GBR, the main agricultural activities listed are sugarcane and horticulture.
However, the pollutant loads measured are recorded in a broad form, for instance, the amount of
total nitrogen from human activity are stated as 11,000 tonnes (from 1947 km² of sugarcane farms
and 251 km² of horticulture) from the contribution of both sugarcane and horticulture.
It was also noted that there is limited information on the specific nitrogen loss in runoff water from
sugarcane farms (Thorburn et al., 2011b, Bartley and Speirs, 2010). Although there are some values
reported by Bengtson et al (1998) and Kwong et al (2002) that range from a few kg ha-1 yr-1 to 20 kg
ha-1 yr-1 of nitrogen loss from sugarcane production, these studies focused on findings from other
locations; Louisiana and Mauritius respectively. Furthermore, the amount of nitrogen from land-based
runoff in these two studies was from different types of soil. Therefore, the data of these studies are
not highly comparable to GBR studies. This view is also supported by Bartley and Speirs (2010) who
emphasized that water quality data may be significantly different and variable depending on the type
of soil under study, the condition of the land and the pattern of rainfall in the region. Nevertheless, in
some of the studies done in Australia, the nitrogen loss has been measured to be less than 5 kg ha-1
yr-1 according to Prove et al (1997) and Thorburn et al (2011b). In addition, based on the report from
the Australian Centre for Tropical Freshwater Research (ACTFR) entitled, ‘Sources of Sediment and
Nutrient Exports to the Great Barrier Reef World Heritage Area’, the nitrogen emission rate from
sugarcane farming in Wet Tropics (Johnston basin) marks the highest nitrogen emission of 32.1 kg ha-
1 yr-1 (Brodie et al., 2007).
38
One of the primary threats to the GBR is the COTS outbreak that is associated with the high level of
DIN (Furnas et al., 2005). DIN mainly originates from the rivers located in the Wet Tropics and Burdekin
regions as reported by Brodie and Mitchell (2005) and Fabricius et al (2010). DIN is highly associated
with the degradation of coral cover in GBR in which the COTS outbreak equates to approximately 37%
of GBR coral mortality (Osborne et al., 2011). Hence it is not surprising that the year 1985 to 2012
witnessed the loss of more than half of the GBR coral cover (mean coral cover for surveyed reefs falling
from 28% to 13.8%) and COTS outbreak is one of the top two causes (De’ath et al., 2012).
I assert that this may also be aggravated by the rather lenient management strategy targeted to the
sugarcane farmers as the use of the voluntary BMPs as one of the parameters used in the Reef Plan.
As stated in Queensland Audit Office (QAO), only after the extension of BMPs, will the need for
regulation enforcement be considered by the Queensland government (Queensland Audit Office,
2015).
Based on the main findings summarised by the Scientific Consensus Statement 2013, the highest water
quality risk of all the regions in the GBR area is Wet Tropics, followed by Fitzroy, Mackay, Burdekin,
Cape York and Burnett Mary (Brodie et al., 2013). Figures 6 and 7 illustrate the catchment region is in
the GBR and the proportion of land use in each region. It is noteworthy that the Wet Tropics region
indicates the highest annual average rainfall with >2500mm in most parts of the region (Figure 6).
Moreover, the Wet Tropics and Mackay regions are also marked with higher proportion of sugarcane
farming in comparison with other regions (Figure 7).
39
Figure 6. The catchment regions in Great Barrier Reef (Australian Government, 2009).
Figure 7. The land use proportion in each catchment of Great Barrier Reef (Australian Government, 2009).
40
The experts in the Scientific Consensus Statement in 2013 (Brodie et al., 2013) also concluded that
the degraded water quality in Wet Tropics calls for priority management in terms of nitrogen control,
whereas Fitzroy and Burdekin are prioritised for the control of suspended sediment. In addition,
Mackay Whitsunday and lower Burdekin require stringent herbicide management (Brodie et al., 2013).
Furthermore, the findings from Source Catchments modelling illustrate that more than 90% of
photosystem II inhibiting herbicide load is due to sugarcane cultivation (Brodie et al., 2013). The main
crop in the GBR region is sugarcane and it has been reported that 43% of anthropogenic DIN comes
from the Wet Tropics (Brodie et al., 2013).
Table 12 summarises the main management priorities in order to improve the deteriorated water
quality of GBR. The first in rank for priortised management is the Wet Topics followed by Burdekin
and Mackay (Brodie et al., 2013).
Table 12. The priority regions for reducing pollution in the GBR region (Brodie et al., 2013).
In conclusion, it can be seen that the diffuse source of pollutants in GBR are mainly dominated by the
significant impact of the high DIN due to the intensive sugarcane cultivation in the Wet Tropics. This
41
calls for drastic management intervention to halt the escalating level of DIN and, thereby, further COTS
outbreak that would degrade the coral reef.
2.5.2 Effluent loads of point source pollutant
Point sources of pollution can be attributed to a point of dispersal (e.g pipe or waste outlet) which
include sewage and aqauculture (Queensland Government, 2003). Prawn aquaculture releases waste
water through end-of-pipe and is considered as point source pollution. A set of studies conducted
from 1995 to 2002 assessed the biggest prawn farms in Queensland and New South Wales by the
experts and scientists from distinguished institutions such as CSIRO, University of Queensland, AIMS,
University of Sydney, Queensland Department of Environment and Heritage and New South Wales
Environment Protection Authority (CSIRO, 2002). The studies took into account the different discharge
environment conditions and water management systems that comprised of both recirculating and
flow through (Jackson et al., 2004). The major findings are that Australian prawn farms operate with
world best practice in discharged water quality, as the cutting edge technology in treatment systems
allows some farms to increase prawn farm productivity with no nett increase in the effluent loads to
the receiving environment if best practice methods are applied (CSIRO, 2002).
An illustration from the research summary also revealed that the expansion of prawn farms from 717
hectares to 5000 hectares would contribute to GVP increase from $40 million to $400 million. 5000
ha is equivalent to less than 1.4% of the current sugarcane farm area (CSIRO, 2002).
The following table records the effluent emission from prawn aquaculture extracted from ACIL report
(ACIL, 2002).
Table 13. The effluent discharge data from prawn aquaculture farms (ACIL, 2002) (note: units have been converted to the same unit used by Jacobs SKM for ease of comparison).
Prawn Farms
Landholders
Land
farmed (ha)
Total
Nitrogen
(kg ha-1 yr-1)
Total
Phosphorus
(kg ha-1 yr-1)
Suspended
solids (kg
ha-1 yr-1)
23 500 106 13.2 2,628
Based on ACIL Consulting report to APFA in 2002 (ACIL, 2002)
Trott and Alongi (2000) found no major differences in sediment and dissolved nutrients concentrations
in estuaries that were exposed to prawn farm effluent in comparison to the control estuary. It was
concluded that the intermittent nutrient discharge from prawn farms were dissipated and assimilated
by the mangrove tides of the estuaries (Trott and Alongi, 2000). To further understand the main source
42
of nitrogen in the effluent from prawn farms, it is important that formulated feed given to farmed
shrimps contributes to major nitrogen input to the ponds (Jackson et al., 2003). The high effluent level
of sediment and nutrients are likely to give rise to algal blooms and create oxygen-deficient or anoxic
conditions (Naylor et al., 1998, Smith et al., 1999). Robertson and Phillips (1995) found that effluent
assimilation is possible and that for one hectare of shrimp pond to undergo effluent assimilation, at
least 2 to 22 hectares of mangrove area is required.
Many countries including Australia place discharge limit on agricultural and aquacultural operations
regulating the effluent levels of nitrogen, phosphorus and suspended solids (Burford et al., 2003b).
However, Wolanski (2000) showed that there is a fluctuation in this parameter in short periods of time
and therefore it remains an ineffective measure to evaluate water quality temporally and spatially. As
concluded by Burford (2003), an alternative method to effectively evaluate water quality associated
with anthropogenic activity is through the evaluation of the main ecological processes and the
associated parameters although this approach requires more effort (Burford et al., 2003b) . The
recommendations for effective water quality measurements is the assessment of the nutrients’
impact to phytoplanktons, primary production rates, fish grazing patterns and the increased level of
δ15 nitrogen (δ15N ) ratios in marine plants (Burford et al., 2003b).
In view of these findings from the literature, a further critical analysis on the water quality evaluation
of agricultural activities and aquaculture is included in the next chapter of this thesis.
43
CHAPTER 3 Investigation on the environmental impacts of the nutrient
emission from sugarcane farming and prawn aquaculture and
assessment of the current regulatory system in Queensland
3.1 Introduction The literature review presented in the previous chapters discussed the eroding health of the GBR and
the importance of examining the industries operating adjacent to the GBR. This chapter investigates
the industries’ status quo to determine the environmental impact of the industries based on the
current development and the attempts made to reduce the emissions of nutrient.
The investigation of the industries’ environmental impacts in this chapter also analyses the Jacobs
SKM benchmark study. Jacobs SKM was contracted by QCA to produce a benchmarking study
encompassing aquaculture and other agricultural industries to assist the Queensland Government in
determining the need for regulatory reform of aquaculture in Queensland (Erftemeijer, 2014). The
study compared the environmental and economic aspects of the industries, but an emphasis was given
to the nutrient discharges to adjacent coastal waters (Erftemeijer, 2014). Although the study
completed was a good effort in collating all the input from the available literature, the section on the
environmental aspect, particularly the effluent emissions, has some shortcomings, as elaborated in
this chapter.
This chapter also investigates the likely inertia effect observed from the current industries in
Queensland concerning the sugarcane and prawn aquaculture industries. The work of Brennan more
than a decade ago concluded that, “The economic cost associated with targeting new, point source
polluting industries, at the expense of incumbent diffuse source industries, should be considered
carefully. While it may be easier to target point source pollution, and while it may be politically difficult
to impose strict control over long-established industries, the efficiency costs of such biased policies
could be high” (Brennan, 1999). The aforementioned conclusion made by Brennan emphasized on the
‘waste disposal’ issue that remains a big concern for an emerging industry like prawn aquaculture in
Queensland to compete with the incumbent diffuse source industry such as sugarcane.
44
3.2 Data and Methods
Investigate the environmental impacts of both prawn aquaculture
and sugarcane farming to the health of the Great Barrier Reef.
Analyse the environmental impacts of sugarcane farming and
prawn aquaculture industry based on the recommended parameter
besides the ‘nutrient per hectare’ approach used in the Jacobs SKM
benchmark study. Use examples from other countries on evaluating
the environmental impacts of point source and diffuse source
pollution.
Explore the most recent industrial technology breakthroughs to
reveal the sustainability level of each industry.
Recommend strategies for reducing the nutrients released to the
GBR based on the analyses done.
Investigation of the main challenge faced in achieving the water
quality targets as specified in the Reef Plan.
45
3.3 Results
3.3.1 Industry Status Quo
3.3.1.1 Advances in sugarcane industry to operate sustainably
Smartcane BMP
As nitrogen contained in the fertiliser used by the sugarcane farmers pose significant environmental
risk especially to the GBR (Webster et al., 2012, Skocaj et al., 2013), a program called Smartcane BMP
was developed in 2013 by the CANEGROWERS through the funding supplied by the Queensland
government (Department of Agriculture, 2014). This program aimed at assisting sugarcane growers in
understanding and learning how to better handle and use fertiliser with training and certification
provided (Department of Agriculture, 2014).
Examples of further innovations and breakthroughs done by the cane industry are as follows.
Project Catalyst
One of the efforts made by the sugarcane industry in collaboration with several bodies including
Terrain NRM, Coca Cola Foundation and World Wildlife Fund is the Project Catalyst (Department of
the Environment, 2016). This program generally comprises of 70 sugarcane growers from the three
NRM regions namely Terrain Wet Tropics, Mackay Whitsunday and the NQ Dry Tropics (Jaime, 2014,
Mauloni, 2016). These 70 sugarcane growers are participating in a trial to develop and to validate new
farm practices that could improve the water quality into the GBR (Mauloni, 2016). The aim of Project
Catalyst is to establish ways to develop farming practices that are environmentally sustainable for
sugarcane growers (Diana, 2016).
This program obtained its funding through the Australian Government’s Reef Program and operates
through active learning and demonstration trials for three years (Department of the Environment,
2016). The interested sugarcane farmers can apply for funding and support to take part in this program
(Jaime, 2014).
In February 2016, Terrain NRM held the Project Catalyst Forum, which gathered more than 70 cane
growers from North Queensland and other partners including the WWF, Coca Cola Foundation, Reef
Catchments and Australian Government (Terrain NRM, 2016). This forum involved presentations
made on the advances in robotics use and other innovation such as Bayer’s bio-pesticide (Terrain
NRM, 2016). Furthermore, another innovation discussed that could reduce runoff and save water was
46
the use of radio transmitters and moisture probes which could turn the irrigation off at the right time
(Mauloni, 2016).
Improvements in the nitrogen fertiliser application rates
Table 14 below illustrates various alternatives for management of nitrogen fertilizer by sugarcane
growers. The work done by Schroeder et al (2009) showed that the only approach that allows for yield
productivity, cost effective inputs with improved environmental impact is the “Six Easy Steps”.
Furthermore, it has been postulated that the least used nitrogen alternative called the N-replacement
strategy is not favourable due to the lower yield in both cane and sugar, and hence reduces the
growers’ profitability (Shroeder et al., 2009). Although the N-replacement strategy may be the most
preferred option in the aspect of being least detrimental to the environment, the economic analysis
showed it is not economically viable for the growers. The Grower-developed method is associated
with higher nitrogen inputs but with similar yield and therefore is not desirable (Shroeder et al., 2009).
Table 14. The various nitrogen management strategies utilized in the sugarcane industry in Australia (Shroeder et al., 2009).
The trend observed in the Australian sugarcane industry is that it initially focusses on production
maximisation, followed by profit optimization and the latest strategy is on minimizing environmental
impact to the GBR (Wood et al., 2000, Thorburn et al., 2010). The following flow chart illustrates the
evolution of nitrogen management of the sugarcane industry in Australia.
47
Evolution of nitrogen management strategy in Australian sugarcane industry
Conventional grower approach
• The nutrient application rate is fixed.
• Crops are usually over-fertilized and less profitable due to the fertiliser wastage.
• Detrimental to the environment with the significant excess of nitrogen in runoff.
Utilizing target yield approach by supplying the nutrient in correspondence to the crop demand
namely the target yield
• Con: Not always possible to reach target yield. Hence, nutrient released in runoff is in
excess and potentially degrading the environment.
Strategies formed on the basis of highlighting the importance of safeguarding the environment:
Six Easy Steps
• Based on soil type and district yield potential (Cal-Gran, 2016).
• Current BMP in Australia
• Takes into account that N supply used up by crops not necessarily sourced from fertiliser
only.
• District Yield Potential determined for all soil types (Schroeder et al., 2010). The baseline
nitrogen application rates for each region are determined by taking into consideration the
soil type.
N-Replacement strategy
• Determine the N amount removed in the harvested crop using N concentration of the
cane harvested and the actual harvested cane yield (Thorburn et al., 2010).
• The fertiliser nitrogen required in this strategy takes into account the loss of nitrogen
through the harvested cane, to the environment and the factor of the burning system.
• The most environmental-friendly of all the nitrogen management methods.
48
The Australian sugar industry has developed two nitrogen calculation systems to better manage the
nitrogen runoff such as the Six Easy Steps and N Replacement strategy (Skocaj et al., 2013)
Six Easy Steps
The Six Easy Steps are the updated guidelines that take into account the soil and site characteristics
to have minimized nitrogen application rate (Wood et al., 2003, Schroeder et al., 2010, Schroeder et
al., 2007). The objective of the Six Easy Steps is to encourage sustainable sugarcane growing practice
with minimal nitrogen input regardless of the price of sugar (Skocaj et al., 2013). This program is also
part of the Australian sugarcane industry’s BMP selections as to move towards more sustainable
practice as the sugarcane farms in Queensland are adjacent to the highly significant and protected
World Heritage Great Barrier Reef (Skocaj et al., 2012).
In Six Easy Steps, the calculation for the nitrogen application rate includes determining the nitrogen
baseline required for the District Yield Potential (DYP). DYP is defined as the approximated average of
the highest annual district yield with multiplication by the factor 1.2 (Schroeder et al., 2010). Besides
the soil tests which are considered vital in the Six Easy Steps success, the leaf tests are also essential
in determining the sufficiency of the fertilizer inputs (Schroeder et al., 2006). Furthermore, the method
of dertermining N baseline application rates is viable through the N mineralisation index based on the
the soil organic carbon as demonstrated by the work of Walkley and Black (1934). An example of the
nitrogen application guidelines is as shown below which incorporates the N mineralisation index with
the DYP. Through this way, the nitrogen leached in the runoff is highly likely minimized and has been
the basis of the present BMP in Australia.
Table 15. The guidelines for nitrogen application rates established from the mineralisation index of nitrogen for the zones with approximated district yield potential of 120 tonne of cane per hectare (Schroeder et al., 2005).
In addition to the Six Easy Steps, another N management strategy developed is the N-replacement
system. In comparison to all of the strategies, the N Replacement stratgey has shown to be the most
49
environmental friendly but the main issue revolving this strategy is it may not be economically
effective for the landholders.
N- Replacement system
The genesis of N-replacement strategy stemmed from the aims set to achieve environmental and
economic balance in the use of nitrogen in Australian sugarcane industry. In this strategy, it is
recognised that only a portion of N is directly obtained from fertilizer in which sugarcane gets 30-40%
of its total requirement of N from fertiliser (Chapman, 1994, Vallis et al., 1996). The remaining N
requirement is obtained from the soil and from the mineralised organic matter.
One of the primary factors in N-Replacement strategy is the need to determine the total of nitrogen
detached in the crop harvested (Thorburn et al., 2011a). This is feasible through the approximation
made of the N concentration in the cane harvested (approximation: 0.6 kg N/tonne cane) with the
amount of actual cane yield collected in a block (Thorburn et al., 2011a).
It has been reported that the N lost through burning could be up to 0.3 N/tonne cane and another
way of nitrogen is removed is through the immobilisation that takes place in the soil organic matter.
Furthermore, an inevitable loss to the environment accounts for another 0.4 kg N/tonne cane
(Thorburn et al., 2011a).
Therefore, to replace or compensate for the loss of nitrogen, the sum of fertiliser nitrogen needed in
the N-Replacment srategy is 1 kg N/tonne cane for the green cane trash retention or 1.3 kg N/tonne
cane in the burning system.
According to the Sugar Research Australia (SRA) report, although this srategy is the best for the
environment currently, the application of N-Replacement strategy is not widely adopted yet due to
the insufficient tests carried out in determining the profitability and productivity of this strategy.
As shown in the following table, the N-Replacement strategy (NRep) shows the least productivity and
economic return in comparison to the traditional grower’s approach and the Six Easy Steps (6ES) in
the two sites T-ST2 and T-ST4 (Skocaj et al., 2012).
Hence, due to the matter of the uncertainty of the productivity outcomes, this method is not yet
recommended to be widely adopted in the current BMP for sugarcane cultivation despite the
significant benefits of this approach to the environment (Skocaj et al., 2012).
50
Table 16. The productivity and profitability of sugarcane cultivated using different nitrogen treatment in Tully at three different sites in the Wet Tropics (Skocaj et al., 2012).
As shown, there have been substantial efforts made by the sugarcane industry in reducing its
environmental impact especially to the coral reef health. However, I assert that besides all the efforts
and breakthroughs shown, the question remains, “Could all of these efforts made be adequate in
reducing the environmental impact in order to achieve the water quality target set in the Reef Plan
and to have a sustainable sugarcane industry operating in the GBR? Or a drastic intervention such as
land use change needs to be implemented?”.
The next part of this chapter illustrates the breakthroughs in prawn aquaculture industry in
Queensland in order to operate more sustainably and to ensure the rigid regulations imposed on this
industry are met.
51
3.3.1.2 Breakthrough in the prawn aquaculture industry in the effort to operate more
sustainably
In contrast to the relaxed approach in managing the diffuse source polluters in the GBR, the new
practice of prawn farming was immediately singled out as an ‘Environmentally Relevant Activity’ (ERA)
and was expected to conform to sustainability regulations imposed under Queensland’s new
Environmental Protection Act 1994 (Queensland Government, 2016a, Caxton Legal Centre, 2016). ERA
is defined as any industrial activity that releases wastes or contaminants into the environment (DEHP,
2016). Even in the beginning of the industry’s operation, the prawn farmers conformed to the
discharge limits and built settlement ponds (Donovan, 2001).
The effort made by the prawn aquaculture industry could be seen since in their early operation
decades ago in making sure their practice is environmentally sustainable. For example, the
Environmental Code of Practice for Australian Prawn Farmers was released by APFA in 2001 which
emphasized on waste minimisation and the need to protect the receiving environment (Donovan,
2001). This Code of Practice was funded by the Environmental Protection Agency and was contributed
by various research institutes and government agencies (Donovan, 2001). Ultimately the objective of
the Code of Practice was to ensure no tangible impact to water quality in accordance with ANZECC
(1992) guidelines (Robertson, 2000).
Adoption of sedimentation ponds (1995-2002)
The promising development of prawn aquaculture in coastal Queensland since three decades ago
fuelled vast industry-driven research studies related to prawn pond ecosystems, environmental
impacts of this industry and nutrient treatment systems. The early research studies were the seven
year study from 1995-2002 in which 30 scientists from established research centres were involved
namely institutions like CSIRO, AIMS, DEHP, Griffith University, University of Sydney and many more
(CSIRO, 2002). This seven-year multidisciplinary study conducted was comprehensive in which a fine
integrated method of analysis lead to the significant discovery such as the major ecological processes
involved in the operation of intensive shrimp ponds and the downstream impacts onto the coastal
environments (Burford et al., 2003a). Besides the quantitative analysis done, the research team also
managed to invent economical nutrient treatment system including sedimentation processes and
settlement ponds. The results of this seven-year multidisciplinary study were showcased in 42
refereed scientific publications (Burford et al., 2003a). The various research programs were
coordinated nationally and funded by the CRC, FRDC and Australian shrimp farmers paid the
environmental research levy (Preston et al., 2000).
52
The aquaculture industry has always tried to work towards operating environmentally sustainable and
an example is its contribution in the wastewater discharge limits. The licensing criteria set in the policy
pertaining to aquaculture wastewater discharge were based on the work done by Cooperative
Research Centre for Aquaculture (CRC) (Department of Environment and Heritage Protection, 2013).
Based on this policy, the maximum net discharged values for total suspended solids, nitrogen and
phosphorus are 75 mg/L, 3.0 mg/L and 0.40 mg/L respectively (Department of Environment and
Heritage Protection, 2013).
Just as some N fertiliser application strategies (eg: N-replacement system) would likely put cane
farmers out of business, there were disincentives (opportunity costs) to wasting productive farmland
constructing settlement ponds (Brennan, 1999). Once settlement ponds became standard, prawn
farmers and aquaculture researchers sought improvements in efficiency that might also see
remediation pay for itself. One hope was that waste nitrogen could be intercepted in an unfed
secondary crop grown in the settlement pond. Fish, oysters and even extensively-reared prawns were
trialled at various times but no breakthroughs occurred (O'Sullivan, 2010). But arguments of
complicated attempts to impose ‘polyculture’ paradigms about upon the new prawn farms were
suddenly upended from an unexpected quarter. Reducing seawater discharge from intensive prawn
ponds awoke a natural and yet hitherto explored microbial path for sequestration of nutrients from
feed waste -within the production pond. Some prawn species overseas flourished upon this microbial
biomass grown from uneaten feed, alas not Penaeus monodon. Nevertheless, trials in Queensland
showed that even a partial awakening of these microbial-floc pathway in ponds had environmental
benefits and saved farmers money (O'Sullivan, 2011). But while black tiger prawn farmers could not
make full use of in-pond microbial-floc remediation as feed, it turned out there is another way that
their prawns could feed upon pond-grown microbial biomass; NovacqTM.
NOVACQTM- Australian made prawn feed
The invention of NovacqTM, a marine microbe-based pellet with added proteins and minerals (Neales,
2013), is a game changer to the prawn aquaculture industry not only in Australia but worldwide. The
CSIRO’s scientist team including Dr Nigel Preston have successfully developed the prawn feed which
reduces reliance on wild fisheries which promotes sustainability (Org, 2013). Furthermore, prawns fed
with NovacqTM have shown to be more resilient towards prawn diseases such as Gill-associated Virus
(GAV) and accelerates growth by 30% (Sellars et al., 2015, Glencross et al., 2013). This will definitely
boost the productivity of the prawn aquaculture industry with the significant features such as
accelerated growth and higher resilience. It is not uncommon that the prawn aquaculture industry
53
worldwide has experienced significant downfall due to the prawn disease outbreaks such as Early
Mortality Syndrome (EMS) that have hit major countries like China, Vietnam and Malaysia a few years
ago (Zorriehzahra and Banaederakhshan, 2015). The production of NovacqTM is now licensed in
Australia, China and Vietnam (CSIRO, 2017). In the beginning of 2017 this year, the license
arrangements of this technology with Ridley Aquafeeds has been extended to other countries (CSIRO,
2017).
It is of great potential to investigate the possibility of NovacqTM to decrease the likelihood of the prawn
disease outbreak from taking place again like EMS. It may be a huge gold mine for the Australian
economy if the full potential of NovacqTM is further explored and investigated in addition to the
established name of Australia as having the world’s best practice of prawn aquaculture (Neales, 2013).
Figure 8. The production of NovacqTM.(Preston and Fitzgerald, 2013).
One of the latest advancements in the prawn aquaculture industry is the three-phase treatment
approach adopted in the prawn farm development located in Guthalungra as described in the next
section (Pacific Reef Fisheries, 2014).
Before the prawn farm development in Guthalungra was proposed, the two steps already existed in
which settlement ponds were standard and followed by the sand filters adoption.
For post-settlement remediation, Pacific Reef Fisheries first tested a substantial constructed
mangrove wetland at their 100ha farm at Ayr in North Queensland (O'Sullivan, 2002), but later a large
sand filter was substituted, entirely removing organic particulates from the returned seawater
(O'Sullivan, 2010).
54
Therefore, the latest three treatment systems which includes MBD’s new algae production in
Guthalungra was an enhancement of the advanced technology that they already had to harvest
inorganic nutrients from the flow.
The three treatment systems proposed in Guthalungra prawn farm: Primary sedimentation, sand
filtration and algal bioremediation.
The strategy to be adopted by the prawn farm in Guthalungra is the three-phase system in which the
waste water will initially pass through settlement ponds before going through sand filtration and
eventually the algal beds to eliminate nutrients and suspended solids as illustrated in the following
Figure 8 (Pacific Reef Fisheries, 2014). The settlement ponds are to be used in the initial stage as to
expel the large particles from the waste water. In addition, the sand filtration process is where the
finer particles are removed and the conversion of dissolved organic nutrient into dissolved inorganic
nutrient takes place. The final major phase is the process which involves live algae to remove the
excess nutrients and the waste water which has completed these three stages of purification is now
appropriate to be recycled or discharged into the waterways of the Marine Park subjected to the
approval conditions (Pacific Reef Fisheries, 2014).
Algal bioremediation has become an economic and efficient way of treating waste water by reducing
the surplus dissolved nutrients from the aquaculture effluents by utilizing live algae (Chopin et al.,
2012, Lawton et al., 2013) . Furthermore, this method is considered important especially for land-
based aquaculture which often faces red tape issues and stringent regulatory imposed on the point-
source nutrient release (West, 2015).
55
Figure 9. The process of water treatment system for the proposed Guthalungra prawn farm (Pacific Reef Fisheries, 2014).
Table 17. The technology advances made in the prawn aquaculture water treatment system has the potential to reduce the nutrient level from the intake water (Pacific Reef Fisheries, 2014).
As shown above, the latest quantum leap in the advancement of prawn aquaculture research in
sustainability has scored them the incredible algal bioremediation method which allows for ‘cleaner’
water to be discharged into the environment in comparison to the intake water that it initially
receives. Specifically, the ocean intake water is initially recorded with nitrogen concentration of 0.35
– 0.5 mg/l and after the three-phase water treatment system, the nitrogen level recorded in the water
released is from 0.15 – 0.2 mg/l (Pacific Reef Fisheries, 2014).
56
Guthalungra prawn farm nitrogen emission rate
20,900 kg nitrogen/year = 80.7 kg nitrogen ha-1 yr-1
259 ha*
*The full production of prawn farm is 259 ha whereas the inclusion of water treatment and storage
ponds lead up to 315 ha. In this analysis, the prawn farm production area of 259 ha is used.
As depicted above, the latest innovation and technology advances made in the water treatment
system recently allows prawn aquaculture to operate with minimal environmental impact with the
nitrogen emission rate of 80.7 kg ha-1 yr-1. This rate is lower than the nitrogen emission rates from
prawn aquaculture reported in the Jacobs SKM Benchmark Study which is discussed later in this
chapter.
Guthalungra
prawn farm
Nitrogen
emission rate Nitrogen
concentration
Ocean intake
water
0.35 – 0.5 mg/l
Treated water
output
0.15 – 0.2 mg/l
80.7 kg ha-1 yr-1
Figure 10. The water quality data from the water treatment system proposed in the Guthalungra prawn farm. This shows that the water discharged from Guthalungra prawn farm is potentially cleaner than the water input even with 80.7 kg ha-1 yr-1nitrogen emission (Pacific Reef Fisheries, 2014).
57
This remarkable discovery in producing ‘cleaner’ water should be highly applauded and commended
for the efforts that have been put in by the industry stakeholders in ensuring the sustainability of this
industry. However, the prawn aquaculture industry in Australia has experienced difficulties in
obtaining approvals to operate in Queensland (Courtney, 2015). One of the most likely reasons that a
point source polluter such as aquaculture has been subjected to a maze of regulatory complexities is
due to its easily measured end-of-pipe nutrient loads in comparison to its counterparts which are the
diffuse polluters, much more difficult to measure, localise the source, and regulate (Courtney, 2015).
It is a widely known fact that the biggest nutrient contributor to the GBR has always been the
agricultural industry namely the sugarcane industry in Queensland which mainly operates adjacent to
the GBR (Webster et al., 2009). The progress of Guthalungra prawn farm is hampered due to the slow
progress in obtaining the approval and the difficulty faced due to the red tape as it took more than a
decade. The MBD Limited put a pilot bioremediation unit in place at the existing Pacific Reef site and
currently daily water quality monitoring is ongoing to fulfil the requirement of emitting zero net
nutrient discharge as set by the GBRMPA (MBD Limited, 2016).
Previously, the discharge target set by EPA in 2000 was 0.48 kg N/ha/day (Treadwell et al., 1999).
Specifically, the EPA target was 130 kg N ha-1 yr-1through the calculation of (0.48*30*9= 130 kg N ha-1
yr-1) by taking 9 months as the growing period. In comparison, the Guthalungra prawn farm nitrogen
emission rate is only 80.7 kg N ha-1 yr-1which is significantly lower than the target set by EPA. This
further shows the constant effort made by the prawn aquaculture industry to operate sustainably
adjacent to the GBR. On the other hand, the diffuse polluters are still not able to demonstrate its
sustainability by not achieving the 50% nitrogen reduction target as up until 2013, only 10% of the
nitrogen has been reduced which is far off than the target set (Reef Plan, 2014b).
Conclusion
Based on the aforementioned breakthroughs made by both sugarcane and prawn aquaculture
industries, it is unequivocal that there have been great progress and immense efforts have been made
by both industries to achieve greater sustainability. Furthermore, it is noteworthy that the sugarcane
industry in Australia is generally based on family-owned businesses which has been passed down from
one generation to the next generation (Moore, 2014). In addition, Canegrowers Chairman, Paul
Schembri was also quoted saying that the sugarcane industry now involves the third generation in the
cane industry (McCarthy, 2014). Therefore, since the sugarcane industry has existed many decades
before the prawn aquaculture policy, it is important to acknowledge the “grandfathering” policy that
might have been applied in constructing the regulations.
58
On the other hand, prawn aquaculture is relatively new and only started to experience growth
especially in the 1990s (Zhu and Chu, 2013). Therefore, this could contribute to the issue of the
potentially biased regulations set for these two industries in which the sugarcane industry is mostly
regulated on voluntary basis whereas the prawn aquaculture is subjected to net zero nutrient emission
with lengthy Environmental Impact Assessment (EIA).
However, the GBR condition has worsened especially in 2016 to the extent that has resulted in it being
reconsidered in the UNESCO’s red list of being ‘in danger’ (Clark et al., 2016). Only after considering
the immense efforts and plans that have been strategized by the Australian government to protect
the GBR, UNESCO eventually decided to remove GBR from the ‘in danger’ list. Nevertheless, the lawyer
at the Environmental Justice Australia, Ariane Wilkinson, stated that the recent mass coral bleaching
in the GBR will most likely trigger UNESCO to put GBR in the ‘in danger’ category (Slezak, 2016a) and
this will potentially affect the tourism industry in Australia significantly (AAP, 2015). This suggests that
a drastic action needs to be taken to save the reefs and this would mean taking control of whatever is
left that can be controlled such as reducing nutrients runoff from major nutrient contributor (Graham
et al., 2014, Burke et al., 2011).
To further evaluate the environmental impacts of both industries, it is also important to investigate
the nutrients loads released through the industries operation as shown in the following analysis of
Jacobs SKM’s benchmark study.
3.3.2 Critical Analysis of the Jacobs SKM’s benchmark study on effluent emissions from
shrimp aquaculture and sugarcane farms
Jacobs SKM (consultancy division) was contracted by Queensland Competition Authority (QCA) to
produce a benchmarking study encompassing aquaculture and other agricultural industries to assist
the Queensland Government in determining the need for regulatory reform of aquaculture in
Queensland (Erftemeijer, 2014). The study compared the environmental and economic aspects of the
industries, but an emphasis was given to the nutrient discharges to adjacent coastal waters
(Erftemeijer, 2014). However, the section on the environmental aspect, particularly the effluent
emissions, has some shortcomings, as elaborated below.
The levels of the nitrogen emission from prawn aquaculture that were listed in the Jacobs SKM’s
benchmark study (shown in Table 18) appeared to be higher than the ones reported by the ACIL
consulting report (in Table 19 of this chapter). Hence, the source of the nitrogen emissions listed in
the Jacobs SKM’s study were investigated.
59
Table 18. Summary of effluent emissions sourced from Table 7 of the Jacobs SKM benchmark study (Erftemeijer, 2014).
Type of land use Nitrogen emission reported in
Jacobs SKM study (kg ha-1 yr-1)
Prawn aquaculture (Queensland) 175.2 - 657
Sugarcane farming <1 - 138
The following Table 19 provides the effluent emission from prawn aquaculture extracted from ACIL
report (2002). However, a comparison between Table 18 and Table 19 reveals significant differences
in the prawn aquaculture effluent emission especially nitrogen.
Table 19. The effluent discharge data from prawn aquaculture farms (ACIL, 2002) (note: units have been converted to the same unit used by Jacobs SKM for ease of comparison).
Prawn Farms
Landholders
Land
farmed (ha)
Total
Nitrogen
(kg ha-1 yr-1)
Total
Phosphorus
(kg ha-1 yr-1)
Suspended
solids
(kg ha-1 yr-1)
23 500 106 13.2 2,628
Based on CRC 2002 study used in ACIL Consulting report to APFA in 2002 (ACIL, 2002)
Table 19 depicts the effluent discharge data extracted from the ACIL report (ACIL, 2002). Specifically,
the 106 kg N ha-1 yr-1 is derived from the calculation of (53,000 kg/500 ha=106 kg N ha-1 yr-1). A high
variance in the measured effluent discharge from prawn aquaculture farms is observed, when a
comparison is made between the data in Table 18 and Table 19. This triggered further analysis and
the need to dissect the emission values reported in the Jacobs SKM benchmark study.
As reported in the Jacobs SKM bechmark study, the summarised results included in Table 18 were
based on the data obtained from the following tables (Table 20 for prawn aquaculture & Table 22 for
sugarcane farm). To obtain a more comprehensive data on the nutrient emissions from sugarcane
farms and prawn aquaculture, further investigation on the sources of the emission data is necessary.
This is because each set of effluent data from each different study is unique in terms of the conditions
of the experiments carried out, and this is important to consider in the analysis.
Firstly, the nitrogen load released through prawn aquaculture reported in the Jacobs SKM benchmark
study is investigated as follows:
60
3.3.2.1 Prawn farm effluent data from Jacobs SKM benchmark study
Table 20. The effluent load data of prawn farms in Queensland extracted from the Jacobs SKM study
(Erftemeijer, 2014) (shown in Table 2 of the Jacobs SKM benchmark study).
Table 20 above comprises the data for prawn farm effluent loads from Queensland. However,
although the results from Thomas et al (2010) are placed under the Queensland prawn aquaculture
category, a further check into this publication reveals that it is actually a study done in New Caledonia
(Thomas et al., 2010). This is one of the several errors detected in the Jacobs SKM benchmark study.
Furthermore, the data above would have been more informative if there were another column
included which states whether water treatment system, such as settlement ponds, was used. This is
because it would give a better indication of the impact of the innovative water treatment system on
the amount of nitrogen released. In relation to that, the latest technology in the water treatment
system proposed for the forthcoming Guthalungra prawn farm allows for cleaner water to be
produced and the reported amount of nitrogen released is 80.7 kg N ha-1 yr-1which is lower than the
ones reported in Jacobs SKM’s study shown in Table 20 above (Jacobs SKM, 2014).
3.3.2.1.2 Investigation of the value stated in the benchmark study
(first row of prawn farm discharges)
Behind the numbers stated in the table of effluent loads, there is a scientific explanation that warrants
serious consideration before drawing any conclusion based on the benchmark study by Jacobs SKM.
For example, in the first line of Table 20 shown in this thesis chapter (prawn farm effluent) that states
430.7 N kg-1 ha-1 released from a prawn farm in Queensland region, the original study was conducted
by Trott and Alongi (2001) but was cited in Burford’s review (Burford et al., 2003a). In the original
study by Trott and Alongi (2001), it was explained that the prawn farm pollutant loads did not lead to
61
eutrophication due to associated physical and biological processes. Examples of the associated
processes were firstly, the fast settlements of the nutrients within the creeks and forests, secondly
the efficient flushing and removal process of sediments during high currents and fluxes, thirdly the
primary production underwent grazing by the zooplankton, the consumption of zooplankton by
juvenile fish and the effluent discharges were in an intermittent pattern that permitted the
“fallowing” to take place at the estuary (Trott and Alongi, 2001). Furthermore, it was reported that
there was no apparent and direct damage observed to the surrounding mangrove and benthic
ecosystems as most nutrients were taken up and used by the naturally occuring food chain mechanism
(Trott and Alongi, 2001).
Drawing on these findings, Burford (2003a) in her review suggested that due to the apparent
difference in the characteristics and in the nature of the point source effluent loads of aquaculture, a
different measurement of water quality should have been used as the bioindicators such as the rate
of primary production, the response of phytoplankton to nutrients and the ratio of isotopic nitrogen
in the marine plants (Burford et al., 2003a). Furthermore, a study done by Wolanski et al 2000 revealed
that the water quality parameters (nutrient concentration such as nitrogen and phosphorus)
commonly used in many countries such as Australia have the tendency to show significant fluctuation
in short periods of time and hence it is difficult to accurately measure the water quality (Wolanski et
al., 2000). Therefore, as aforementioned above in Burford’s review, bioindicators are recommended
(Burford et al., 2003a).
In comparison to the nitrogen effluent from sugarcane farming, the nitrogen effluent from prawn
aquaculture as based on Jacobs SKM’s benchmark study is significantly higher. Hence, the Jacobs SKM
benchmark study could be improved by describing further the meaning of the findings in a local
context (nitrogen effluent data) such as the one done by Trott and Alongi (2001) and the review
completed by Burford (2003a) as this info would have given a different picture on the overall situation.
Furthermore, this matter cannot be handled in the form of ‘one-size-fits-all’ through the ‘nutrient per
hectare’ analysis as adopted by Jacobs SKM in the benchmark study as the difference in the nature of
prawn aquaculture, a point source pollutant, which is easily measured in comparison to diffuse source
pollutant. This view is also in accordance with Burford’s review stating that due to the unique
discharge from prawn aquaculture, a different parameter is needed to assess the impact of this
industry relative to other industries such as agriculture (Burford et al., 2003a).
62
Moreover, a closer look at the research study reveals that the nitrogen emission reported was 1.18 kg
ha-1 day-1 (Trott and Alongi, 2001). Therefore, since the prawn growing period season is around nine
months (McPhee, 2001), the nitrogen emission reported by Jacobs SKM benchmark study should be
318.6 kg ha-1 yr-1 (1.18 kg ha-1 day-1 *270 = 318.6 kg ha-1 yr-1) and not 430.7 kg ha-1 yr-1. It appears that
the Jacobs SKM benchmark study used the whole year as the growing period for prawns instead of
nine months. The next section of this thesis investigates the highest nitrogen value listed in the Jacobs
SKM benchmark study of the prawn aquaculture nutrient discharge.
3.3.2.1.3 Investigation of the highest nitrogen emission value stated in the benchmark study
(prawn farm discharges)
In the fifth row of Table 20 in this thesis (or Table 2 of the benchmark study by Jacobs SKM), the
nitrogen discharged from prawn aquaculture is stated as 657 kg ha-1 yr-1 which is the highest and
significantly higher than the rest of the N effluent listed. I assert that the benchmark study failed to
analyse the scientific reasons for the anomaly present in the data. This nitrogen load was derived from
a study done by Jackson et al (2004) which investigated the effluent loads from three intensive shrimp
farms in Australia. In the study, it was reported that due to the unusual condition of Farm A, only the
discharge values obtained from Farm B and Farm C should be used as indicator of the pollutant loads
released from intensive shrimp farms (Jackson et al., 2004). This is because Farm A used double the
usual amount of water (1.36 X 106 L ha-1 day-1) because the management changed its main shrimp
production species from P.monodon to M.japonicus in the early of the study and faced difficulties from
the switch. Hence, it was concluded that due to this reason, it was not unexpected that farm A
recorded the highest value in effluent loads. Therefore, as Jackson at al (2004) proposed in the
conclusion of his research, intensive shrimp farms would typically produce 1 kg ha-1 day-1 of net loads
of total nitrogen and 0.12 kg-1 day-1 for total phosphorus. In conclusion, if a correction was to be made
in the benchmark study, the 657 kg ha-1 yr-1 value of nitrogen effluent stated would be replaced with
(1 kg ha-1 day-1 *270 = 270 kg ha-1 yr-1) based on the very study that Jacobs SKM itself used (note: the
values were converted to the unit used by the benchmark study of kg ha-1 yr-1). The prawn growing
season is usually around 9 months therefore 270 days are used in the calculation and as prawn
aquaculture is a point source pollution (McPhee, 2001). Table 21 depicts the modification made to the
nitrogen emission values reported based on the analysis done by the author of this thesis.
63
Table 21. The proposed modification to the prawn aquaculture nitrogen emission reported in the Jacobs SKM study.
Nitrogen
emission
rate as
reported in
Jacobs SKM
study
(kg N ha-1 yr-1
Reference Reason to change The proposed
nitrogen emission
in this thesis
(kg N ha-1 yr-1)
430.7 (Trott and
Alongi, 2001),
cited in
Burford’s
review
(Burford et al.,
2003a)
The prawn growing season is 9 months
(McPhee, 2001), thus the yearly nitrogen
emission rate that could be used is 270 days
instead of 365 days as used by Jacobs SKM*.
318.6
(1.18 kg ha-1 day-1
x 270 days = 318.6)
361.4 (Burford et al.,
2003a)
The prawn growing season is 9 months
(McPhee, 2001), thus the yearly nitrogen
emission rate that could be used is 270 days
instead of 365 days as used by Jacobs SKM*.
267.3
(0.99 kg ha-1 day-1
x 270 days = 267.3)
365 (Jackson et al.,
2004)
The consultant could have used 9 months (270
days) as the growing season for prawn
aquaculture instead of 365 days*.
270
(1 kg ha-1 day-1 x
270 days =270)
657 (Jackson et al.,
2004)
The result from Farm A study should be
excluded due to the management issues such
as changing the prawn species grown as
indicated.
270
(1 kg ha-1 day-1 x
270 days =270)
178.9 (Thomas et al.,
2010)
This study is not based in Queensland but in
New Caledonia
N/A
64
*In cases where the prawn farms manage to produce more than one crop per year such as in the north
Queensland (Department of Primary Industries and Fisheries, 2006), the farm will operate for the full
12 months each year. Hence in such cases, the prawn harvesting period of 365-day should be used
due to the differences in location, hatchery supply and marketing strategy. However, most of the
farms in north Queensland would usually stock one crop per year as to make the most profit of the
higher fresh prawn prices in the Christmas period (Department of Primary Industries and Fisheries,
2006).
175.2 (McPhee,
2001)
A further investigation into the report
prepared by Dr Daryl McPhee fro APFA
revealed that the nitrogen emission from
prawn aquaculture is 131.5 kg ha-1 yr-1.
131.5
(52600 kg /400 ha
=131.5)
65
3.3.2.2 Sugarcane farm effluent data from Jacobs SKM benchmark study
Table 22. Nutrient emission from sugarcane runoff based on the Jacobs SKM benchmark study (Erftemeijer, 2014).
3.3.2.2.1 Error detected in the Jacobs SKM benchmark study
As shown in Table 22 above, the nitrogen loads from sugarcane farming in Queensland apparently
range from around 1 to 138 kg ha-1 yr-1 based on the recent studies. However, as displayed in the table
above, the anomalies detected are the ones referenced from Webster et al 2012 which range from
40-138 kg ha-1 yr-1 (circled in yellow). These emission rates are flawed as the values are actually the
nitrogen surplus and not the water-borne emission of nitrogen. A backtrack to the original source,
Webster et al (2012), revealed that these values are nitrogen surplus which is defined as the balance
of nitrogen available after deducting the nitrogen amount in the harvested crop with the nitrogen
amount applied to the crop. This means the N surplus includes the nitrogen in runoff water, nitrogen
66
lost through denitrification and the nitrogen in the soil organic matter. The following depicts the (A)
nitrogen surplus and the (B) nitrogen emission rate reported in the Webster et al 2012.
Based on this study which investigated the nitrogen runoff emission rate from two experimental types
(Webster et al., 2012);
(i) Nfarm
Normal nitrogen (N) application rate: nitrogen applied conventionally ,
(ii) Nrepl
N replacement strategy: nitrogen applied lower through less fertiliser used as to replace the
nitrogen exported in previous crop.
(A) Nitrogen surplus
The nitrogen surplus reported from the work of Webster et al 2012 is as follows:
Table 23. The nitrogen surplus based on the Webster et al., 2012 study which used either normal N application rate or N replacement strategy.
Year N surplus based on Nfarm
(kg ha-1 yr-1)
N surplus based on Nrepl
(kg ha-1 yr-1)
2004 136 57
2005 136 40
2006 138 61
On the other hand, the nitrogen emission rate was reported to be:
(B) Nitrogen effluent load (cumulative loss of total nitrogen)
Figure 11. Cumulative loss of nitrogen emission (N kg/ha) based on conventional nitrogen application (Nfarm) and nitrogen replacement strategy (Nrepl) (Webster et al., 2012) .
67
As shown in Figure 11, the cumulative total loss of nitrogen in runoff water from Nov 2003 to May
2004 was reported to be around 9 kg N/ha for Nrepl and 15 kg N/ha for Nfarm. Therefore, the six
months period would accumulate 9 or 15 kg N/ha depending on the application rate of nitrogen
through the fertilizer. For ease of comparison with the rest of the nitrogen emission rate reported in
the Jacobs SKM benchmark study, the Nfarm would lead to 30 kg ha-1 yr-1 whereas the Nrepl would
lead to 18 kg ha-1 yr-1. Therefore, it is clear that these nitrogen emission rates are more comparable
with the rest of nitrogen emission rates reported in the Jacobs SKM study. The proposed amendment
to be made in the Jacobs SKM benchmark study is as shown in Table 25.
3.3.2.2.2 Sugarcane farm nitrogen effluent load
Based on the report from Australian Centre for Tropical Freshwater Research (ACTFR) entitled ‘Sources
of Sediment and Nutrient Exports to the Great Barrier Reef World Heritage Area’, the nitrogen
emission rate (in kg ha-1 yr-1) from sugarcane farming is calculated (Brodie et al., 2007). This is based
on the reported amount of total nitrogen from the monitored farm area (kg yr-1) and the total
monitored sugarcane farm area (ha) as shown in the table below.
Table 24 The total amount of nitrogen load from sugarcane farms in various GBR regions and drainage basins based on the ACTFR report in 2007 (Brodie et al., 2007).
Region Sugarcane farm
drainage basin
Sugarcane Farm
Total
Monitored Area
(ha)
Total nitrogen
from monitored
farm area
(kg year-1)
Nitrogen emission
rate
(kg ha-1yr-1)
Wet Tropics Far North QLD
region
(Daintree River
Basin)
1,580 25,000 15.8
Wet Tropics Far North
(Mossman River
Basin)
3,420 68,000 19.9
Wet Tropics Far North (Barron
River Basin)
570
2,000
3.5
Wet Tropics Far North
(Russell-
Mulgrave river
basin)
33,570 861,000 25.6
68
Wet Tropics Far North
(Johnstone River
basin)
44,980 1,445,000
32.1
Wet Tropics Far North (Tully
river basin)
21,920 576,000
26.3
Wet Tropics Far North
(Murray river
basin)
7,890 125,000 15.8
Wet Tropics Far North
(Herbert river
basin)
71,410 564,000 7.9
Wet Tropics Northern (Black
river basin)
810 4,000 4.9
Burdekin Northern
(Haughton river
basin)
67,840 398,000 5.9
Burdekin Northern
(Burdekin river)
12,810 71,000 5.5
Fitzroy Northern (Don
River basin)
1,680 5,000 3.0
Mackay Mackay
(Proserpine river)
24,480 206,000 8.4
Mackay Mackay
(O’Connell River)
34,340 417,000 12.1
Mackay Mackay (Pioneer
River)
45,540 550,000 12.1
Mackay Mackay (Plane
River)
54,950 617,000 11.2
Fitzroy Fitzroy
(Shoalwater
River)
230 1,000 4.3
Burnett
Mary
Wide Bay –
Burnett (Baffle
Creek)
1,450 3,000 2.1
Burnett
Mary
Wide Bay-
Burnett (Kolan
River)
14,420 43,000 3.0
Burnett
Mary
Wide Bay-
Burnett (Bumett
River)
23,990 77,000 3.2
69
Burnett
Mary
Wide Bay –
Burnett (Burrum
River)
30,620 88,000 2.9
Burnett
Mary
Brisbane and
Moreton (Mary
River)
120,8610 27,000 2.2
Based on Brodie et al (2007) total sugar cane area is 498,500 ha or 4,985 km2
The highest nitrogen loads are observed from sugarcane farms located in the Wet Tropics as illustrated
in Table 24. This is parallel with the findings from the Reef Plan which shows that Wet Tropics is the
main priority for pollution control due to the significant environmental impact it has on the overall
GBR coral health (Reef Plan, 2014b). Intensive sugarcane farming in Wet Tropics makes excessive use
of fertilisers, thus contributing to the degradation of the coral health through the high nitrogen
emissions (Queensland Government, 2015b). However, as reported in the Reef Plan 2014, the
percentage of sugarcane farming area that is currently compliant with BMP for nutrients is only
around 13% as at June 2014 (Queensland Government, 2015b).
70
Recommended modification to the summary of Jacobs SKM’s benchmark study
Based on the analysis done in section 3.3.2.1 and 3.3.2.2, the summary of the corrected nitrogen
emission rates for prawn aquaculture and sugarcane farming are as tabulated below.
Table 25. The summary of nitrogen emission. a) The nitrogen emission reported in Jacobs SKM benchmark study. b) The proposed modified nitrogen emission rates in this thesis.
Type of land use a) Nitrogen emission reported
in Jacobs SKM study
(kg ha-1 yr-1)
b) Proposed modified
nitrogen emission
(kg ha-1 yr-1)
Prawn aquaculture (Queensland) 175.2 - 657 131.5 – 318.6
Sugarcane farming <1 - 138 <1 - 30
As shown above, the nitrogen emission of both prawn aquaculture and sugarcane farming are less
than the rates originally reported in the Jacobs SKM benchmark study.
3.3.3 Investigation on the main challenge faced in achieving the water quality targets as
specified in the Reef Plan.
As seen from the Reef Plan report, the target set to be achieved by 2013 was not met as the results
showed that the BMP adoption rate was not rapid enough. Furthermore, the nitrogen reduction rate
was very low (10%) in comparison to the target that had been set at 50% reduction by 2013 (Reef Plan,
2014b). A thorough evaluation of why such results were obtained is necessary before a further target
or plan is established, in order to ensure there is a progressive improvement. I assert that this issue is
important to be investigated because it is essential to gauge the success of the current regulatory
regime imposed on sugarcane farming because the previously set target for 2013 was not successful.
Thus, this assists in projecting possibilities of failure of the BMP implementation and whether any
other actions are necessary to compensate an insufficient or ineffective regulatory system.
The benefits of this analysis will potentially shed some light on whether the main strategy adopted in
the Reef Plan is worth continuing or another intervention is needed to produce more desirable results.
71
Through my investigation, the main challenge faced in achieving the targets outlined in the Reef Plan
is discussed below.
3.3.3.1 The voluntary approach imposed on diffuse source polluters appears to be ineffective
in protecting the Great Barrier Reef
The nature of the regulations imposed on the agricultural farmers is such that they are generally
voluntary, incentive-based and, as such there is no proper execution in place if they do not adopt the
BMPs (Harvey et al., 2014). Most of the following inputs (in the following paragraphs) used in the
analysis to determine whether voluntary or mandatory regulatory mechanism would be better for
protecting the GBR are taken from the Technical Report of Reef Rescue Research and Development
(Harvey et al., 2014), unless specified otherwise. The technical report is entitled, “Regulations versus
voluntary mechanisms to improve adoption of best management practices in GBR catchments”. This
report was completed in 2014 in order to evaluate the cost-effectiveness of the current voluntary BMP
implementation. In this report, there are several conclusions made in terms of the proposed guide for
decision making of policies but there is no concrete conclusion made as future research is needed to
obtain complete evaluation.
In the last quarter-decade, there have been several policy mechanisms in place aimed at increasing
the adoption rate of improved agricultural practices to protect the GBR. The policy mechanism
involved can generally be divided into two categories which are either voluntary or non-voluntary as
shown in the following table.
Table 26. The policy structure available to increase the adoption of BMP by the landholders (Harvey et al., 2014).
Voluntary
Non-voluntary
Cooperation & Encouragement based
• Information and extension services
Regulatory mechanisms
• Regulations
• Permits
• Any other type of controls
Economic Instruments
• Grants
• Subsidies
• Tradeable emission permits
Economic Instruments
• Taxes
• Charges
72
Each policy instrument caters for different situation and type of problems. Hence, each policy
mechanism has its own benefits and weaknesses as summarised in the report. Basically, an analysis of
both public and private costs and gains are the elements of the trade-off matrix used in the decision
of policy making.
Since the late 1980s, most of the policies constructed were voluntary-based with emphasis on
encouraging the landholders to adopt better practices. Nevertheless, the regulatory approach in
increasing the adoption of improved practices only commenced in 2009 when the Great Barrier Reef
Protection Amendment Act 2009 was institutionalized (as shown in Table 27, circled in yellow box).
However, this particular regulation is now no longer in effect as it was put on hold by the government.
The inactivation of the regulatory approach took place in 2012 when the Queensland government
signed an agreement to replace the regulatory approach with voluntary BMP system (as shown in
Table 27, circled in green box).
The technical report of the Reef Research and Development summarised that (Harvey et al., 2014):
1) Management intervention is not necessary for every pollutant contributor activity but is only
required when the gains for public benefits are higher in relative to the private costs.
2) The utilization of voluntary mechanism such as information and extension services is
recommended in the case which leads to the benefits of private sector through the change of
management practice. Nevertheless, if it leads to private net costs in the change of process,
economic instruments would be more effective.
3) The use of economic instruments is the recommended regulatory approach for landholders
and projects which need lower costs for the adoption of improved practices.
The initial effort of improving water quality started off with Landcare movement in the 1990s in which
the major approach was encouragement, communication and also provision of funding by the
Commonwealth Government. However, gradually, the form of voluntary approach was more of a
direct financial assistance. During the process, it has been reported that there was ineffective use of
funds due to the inability of setting both proper targets and assessing outcomes of the grants granted
(Rolfe and Windle, 2011a).
This ineffective voluntary approach led to further legislation: the Great Barrier Reef Protection
Amendment Act 2009 (Lockie and Rockloff, 2005). This legislation proposed tighter control over
nitrogen management of cane farms in Wet Tropics and Mackay-Whitsunday regions and the grazing
industry in Burdekin basin. However, as mentioned above, implementation of this was halted in 2012.
73
Table 27. The policy structure to control the water quality entering the GBR for the last 25 years as adapted from the Technical Report RRD039 (a Reef Rescue R&D project) (Harvey et al., 2014). Yellow box: The legislation for tighter control over nutrient management. Green box: The voluntary implementation of BMP to replace regulatory control.
74
3.3.1.1 A more effective and reliable intervention such as the use of regulatory mechanism may be
needed to protect the GBR
I assert that the move to inactivate the Great Barrier Reef Marine Park Amendment Act 2009 was
relatively ineffective in protecting and improving the health of the GBR. Evidently, the GBR is now in
danger as the recent rise in ocean temperature has led to the worst coral bleaching experienced, and
the cumulative impacts from all the stressors to the GBR have made the condition worse (Slezak,
2016b). Although climate change or the rise in temperature of the ocean is difficult to control directly
(Rolfe and Windle, 2011b), other measures which are relatively easier to control are in the
government’s hands to decide through the policymaking decisions made. An example of taking direct
control of the major threat to the GBR has ensuring the water quality entering the GBR has minimal
content of nutrients and other pollutants.
Figure 12. The percentage of the landholders' involvement with the voluntary sustainability and conservation schemes (Lockie and Rockloff, 2005).
My assertion that the voluntary approach used to increase the adoption of BMP is ineffective is also
based on the observations from earlier studies, showing that with voluntary mechanisms, such as the
conservation schemes implemented from around 1989 to early 2000s, the extent of participation by
the landholders was negligible, as illustrated in the Figure 12 above (Lockie and Rockloff, 2005). The
figure above depicts the level of participation of the landholders who were aware of the conservation
programs in their region. However, the percentage of landholders who had used the program was
insignificant, which ranging between 8 – 27%. With such results, evident in the Figure 12 above, I
assert that it would be unwise to expect high adoption of BMP through the industry led voluntary BMP
system which was initiated in 2012. The Reef Plan 2013 report revealed that the target set for nutrient
75
reduction, such as nitrogen, was far from reach. This was disappointing as the impact is highly
significant for the condition of the Great Barrier Reef, which has already suffered from other stressors
such as climate change, rise in ocean temperature, coral bleaching and the associated coral diseases.
Furthermore, as described by the Queensland Audit Office (QAO) in its report released in 2015 entitled
‘Managing water quality in Great Barrier Reef catchments’, the programs initiated under the Reef Plan
lacks proper coordination and are deemed inefficient to tackle the growing water quality degradation
in GBR catchments (Queensland Audit Office, 2015). The conclusion made by QAO in its report is
quoted as below,
“The design, implementation and governance of the collection of programs attributed to the
achievement of Reef Plan goals over more than 12 years indicates an overall lack of urgency,
priority and purpose” (Queensland Audit Office, 2015).
This statement suggests that the current Reef Plan that has been in operation for 12 years has not
successfully addressed the primary issue concerning the GBR. Furthermore, in my opinion, as seen in
the diffuse source pollutant industries such as grazing and sugarcane farming, the current treatment
towards these industries appears to be fairly lenient in comparison to new point source farming
industries such as aquaculture. A specific example is the voluntary approach of BMPs recommended
for the diffuse polluter industries in the effort of reducing environmental impact on the GBR by
educating producers to change their current practices (Queensland Audit Office, 2015, Webster et al.,
2009). This method may not lead to sufficient water quality improvements as it only relies on voluntary
participation and not proper regulatory enforcement. Although the Reef Plan committee concluded
that there is a positive improvement in the overall Reef Plan implementation (Smith, 2015), the audit
done by QAO found otherwise (Queensland Audit Office, 2015). Therefore, it would not be surprising
if the results reported in the Reef Plan showed very limited improvements in the overall condition of
the GBR.
Furthermore, one of the statements made in GBRMPA - Water Quality Issues of September 2001 on
page 68, “If fundamental changes in Queensland do not occur (including immediate minimisation of
vegetation clearance, erosion and responsible use of pesticides and fertilisers), the health of the
inshore ecosystems of the GBRWHA is likely to decline”. This statement reveals that the awareness of
the danger from land-based runoffs had been recognized much earlier on but the core issue is still
unresolved after more a decade which is in line with the findings from the QAO audit mentioned
previously.
76
As noted in the Reef Water Quality Protection Plan 2013 (Reef Plan, 2014b), the next step for the Reef
Plan is focusing more on the extension of BMP programs and also incentive provision to speed up the
BMP uptake by the industry, especially in the Wet Tropics and Burdekin region. This strategy does not
fit well with the statement made by GBRMPA which calls for drastic actions to save the reef as quoted
below,
“It is clear that a business-as-usual approach to managing these impacts will not be enough. Additional
management intervention is required to protect these matters of national environmental significance”
(Elliot, 2014).
From the statement above found in the GBRMPA’s comment on QCA’s Issue Paper of Aquaculture
Regulation in Queensland February 2014 (Elliot, 2014), it is evident that the continuation of the same
approach in the effort to save the reef is insufficient.
Rather, a stronger regulatory framework is needed to constrain the diffuse source polluters in order
to see a change in the near future. A comparison with the regulatory treatment given to other
industries such as aquaculture, indicates a large discrepancy. An example of this is the approach of
environmental offsets that are championed by the regulatory authority such as GBRMPA that requires
any new aquaculture proposal to be able to absorb pollution caused by other agricultural industries
such as in the case of the Guthalungra prawn farm development (Jacobs SKM, 2014).
The continuation of BMPs may also lead to further inefficient funds allocation that could potentially
be used for other purposes such as in the conversion of land use. The components of the Reef Rescue
Program are shown below.
77
Continuous adoption of voluntary BMPs may lead to inefficient allocation of funds
The costs to increase the uptake of BMP among the landholders have been substantial. For example,
as announced by the Australian Government, the cost for the 5-year Reef Rescue package from 2008
to 2013 was reported to be $200 million in total (Reef & Rainforest Research Centre, 2015).
Specifically, the Reef Rescue program consists of five components intended to ensure that the water
quality entering the GBR is improved through the widespread uptake of BMP among the landholders.
The five components of the Reef Rescue are as shown in the table below:
Table 28. The components of Reef Rescue program through the investment by the Australian Government from 2008 to 2013 (Reef & Rainforest Research Centre, 2015).
Component of Reef Rescue
Cost
(AUD$)
Water Quality Grants
• Funds provided to landholders to assist the implementation of the
BMPs.
146
million
Reef Partnerships
• For the extension of information to landholders and for relevant skill
enhancements.
12
million
Land and Sea Country Indigenous Partnerships
• To strengthen the communication between the reef stakeholders and
to construct enhanced understanding in regards to the Traditional
Owner Issues.
10
million
Reef Water Quality Research and Development
• To generate scientific proof for better understanding of the relation
between the agricultural industry practices with the effects on
environment.
10
million
Water Quality Monitoring and Reporting
• To evaluate and measure the progress in achieving the objective of
Reef Rescue and also for data collation of the water quality at paddock
and catchments of GBR.
22
million
78
Furthermore, an additional $45 million has recently been invested in a new project associated with
Reef Alliance through the Turnbull Government (Queensland Farmers' Federation, 2016). One of the
main aims of the funding is to encourage the adoption of BMP by the farmers to ensure improved
water quality entering the GBR (Queensland Farmers' Federation, 2016). This shows that the costs
accumulated to save the reef are enormous, but the GBR condition is not improving as expected as
outlined in the Reef Plan (Reef Plan, 2014b). The Great Barrier Reef Water Science Taskforce, consists
of well-known experts from various fields, in its Interim Report December 2015 stated that, “Full
adoption of current best management practices for the sugarcane and cattle grazing industries will
not be enough to meet our water quality targets. We will need new technologies, innovative practices
and land use change” (Great Barrier Reef Water Science Taskforce, 2015). This statement made by the
taskforce may be indirectly interpreted as a sign of failure of the previous Reef Plan, and implies that
significant change and overhaul is needed for the current land practice such as land use
transformation.
3.4 Discussion
I argue that the approach used by Jacobs SKM to use a ‘nutrient per hectare’ benchmark to assess the
environmental impact is a big area of concern because the industries are fundamentally different in
nature. Specifically, prawn aquaculture is a point source polluter, which is easier to be measured,
whereas sugarcane farming is classified as diffuse source polluter, which is harder to measure.
Although this major difference and the difficulty in comparing different types of pollution have been
acknowledged in the benchmark study, the Jacobs SKM benchmark study could have been more useful
and meaningful if two sets of parameters had been used in comparing the environmental impact of
the industries. For example:
(i) for point source pollution, as mentioned previously, Burford in her review (Burford et al., 2003a)
suggested that due to the apparent difference in the characteristics and in the nature of the point
source effluent loads of aquaculture, a different measurement of water quality should have been used
as the bioindicators such as the rate of primary production, the response of phytoplankton to nutrients
and the ratio of isotopic nitrogen in the marine plants (Burford et al., 2003a). Furthermore, another
study revealed that the water quality parameters (nutrient concentration such as nitrogen and
phosphorus) commonly used in many countries, including Australia, have the tendency to show
significant fluctuation in short periods of time and hence it is difficult to accurately measure the water
79
quality (Wolanski et al., 2000). Therefore, based on the prior studies, I recommend that bioindicators
are the parameters that should be used for point source pollution such as prawn aquaculture.
(ii) for diffuse source pollution, I assert that the parameter of ‘nutrient per hectare’ appears to be
suitable as one of the proxies in assessing the environmental impacts of the industries of the same
nature, with diffuse pollution over a wide area. However, it is only scientifically valid for the same
parameter to be used for examining industries that are similar in nature of pollution and are amenable
to a similar and comparable measurement method.
Furthermore, the difficulty in measuring diffuse (nonpoint) source pollutants is recognized not only in
Australia but also in other countries such as the United States (US). In the US, the Clean Water Act was
passed in 1972 to control point source pollution (U.S. Environmental Protection Agency, 2000). The
significance of non-point source pollution was hardly understood at that time, and all the efforts were
put into controlling the point source pollution. However, in the early 21st century, the major cause of
water quality degradation in the US was acknowledged and reported to be non-point source pollution
which caused 40% of the inspected marine environment to be unsuitable for fishing or swimming,
based on the data published by the US Environmental Protection Agency (2000). Therefore, this
suggests that it has been an international challenge to control or measure diffuse source pollution due
to its nature. This lead to point source pollution to be the easier target to monitor and control.
The author of this thesis also made a direct online inquiry to an anonymus from the Economic Research
Service, Department of Agriculture, Government of the United States, for further clarification on
appropriate measurement methods for understanding the environmental impact of different types of
pollution. The anonymus was involved in the publication entitled, ‘Least-cost management of
nonpoint source pollution: source reduction VS interception strategies for controlling nitrogen loss in
the Mississippi Basin’ (Ribaudo et al., 2001), and he stated that using the parameter, ‘nutrient per
hectare’, may not be accurate in comparing the relative contributions of sugarcane industry with
prawn aquaculture in its nutrient loads to the GBR. This information further supports the lack of
comparability of point source with diffuse source pollution.
Although the nitrogen emission from sugarcane farming is reported to be relatively lower (1 - 30 kg
ha-1 yr-1 as shown in this chapter) compared to prawn aquaculture (e.g. 80.7 kg ha-1 yr-1 in Guthalungra
prawn farm), the nutrient discharged in the sugarcane run-off increases the nitrogen load in the
waterways and does not ‘clean’ it through a returned sea-water treatment system through algal
bioremediation like the one proposed for the Guthalungra prawn farm. This situation again
demonstrates the incomparability of diffuse agricultural and point-source aquaculture pollution
80
through the ‘nutrient discharged per hectare’ parameter. The research studies on the use of algal
bioremediation to remove excess nutrients from effluent were part of the MBD Energy Research and
Development program and were funded through the Australian Government’s Cooperative Research
Centre Scheme (Lawton et al., 2013, Carl et al., 2014).
As shown in the following table (Table 29), the ACIL report produced in 2002 reveals that the top two
contributors of nitrogen are grazing and sugarcane farming. By comparison, the projected expansion
of prawn farms from 500ha to 10,000ha will only result in 3.2% total nitrogen load to the GBR unlike
other industries such as grazing (65.9%) and sugarcane farming (26.4%) which have a larger impact to
the total nutrient load. Moreover, this data was reported in 2002, at which time the effluent treatment
system for prawn farms was still new and not as advanced. Therefore, the total nitrogen load is likely
to be less if the latest water treatment system is used.
Table 29. An extrapolation of the overall contribution of suspended solids and nutrients where prawn farming expands while the other industries remain static (ACIL, 2002).The ‘present ‘load refers to the size of prawn farm of 500 ha.
3Projected load refers to expansion of prawn farm to 10,000 ha with minimal waste water treatment.
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3.5 Conclusions
Based on critical analyses of data sources and the evidence from all of the research cited above, there
are several recommendations, which if adopted may improve the condition of the GBR:
1) Where unregulated sugarcane farms lag in voluntary adoption of Reef Plan targets, enable
a change of land-use toward regulated activities such as prawn aquaculture which have
demonstrated greater capacity to control discharge.
I assert that the industry which has the lowest net nutrient emission and is therefore the least
detrimental to the environment should be given an advantage to operate. Furthermore, the industry
which has developed the most efficient technological innovation to be sustainable should be given the
priority for expansion. An example of an industry which has made tremendous breakthrough in
achieving sustainability is the prawn aquaculture industry, especially the farm proposed in
Guthalungra. As proposed the water treatment system could potentially reduce the nutrient level of
the intake water; it acts a net nutrient sink and not a source (Pacific Reef Fisheries, 2014). Therefore,
it would seem imperative for the government to construct an efficient policy framework which
encourages the development and further expansion of this industry, as it brings potentially huge
environmental benefits, specifically in achieving better water quality in the GBR. Although the
proposed Guthalungra prawn farm has not fully operated yet, the industry has been developing the
water treatment system which includes the use of settlement ponds and sand filtration system since
the beginning as the industry is highly regulated. The use of algal bioremediation system further
proves the continuous efforts of the prawn aquaculture industry to achieve the zero-net nutrient
emission requirement (The Parliament of the Commonwealth of Australia, 2016). This requirement is
not imposed on the diffuse source pollution such as from sugarcane farming as the BMPs are
voluntary.
The current regulatory framework imposed on prawn aquaculture hinders the industry development
by the “red tape” issues that have been pointed out by many parties, especially by the APFA president,
Matt West, “Aquaculture is the fastest growing primary industry in the world, except in Queensland,
whose farmers already employ world-best practice. What’s stopping us? What does the industry need
to do to unblock this impasse?” (West, 2015).
Based on the evidence of the latest innovative breakthroughs such as the algal bioremediation water
treatment system and the NovacqTM prawn feed through the efforts that have been put in by this
industry (Sellars et al., 2015), their existence and expansion in Queensland should be welcomed.
82
However, as seen in the current situation, the prawn aquaculture industry needs to abide by the zero-
net nutrient emission policy. Through the nutrient offset strategy, a prawn aquaculture developer has
to assist in the funding of diffuse polluters such as sugarcane farmers to adopt the inefficient BMP.
Below are the summary of the options in the Nutrient Offset Policy for Guthalungra prawn farm
developer, the PRF (Jacobs SKM, 2014):
a) PRF to assist in the funding of converting 1500 ha pasture to grassland.
b) PRF to assist in the funding of converting 1330 ha sugarcane farm to grassland.
c) PRF to assist in the funding of transforming 1680 ha sugarcane farm from class C to class B.
d) PRF to assist in the funding of transforming 1440 ha sugarcane farm of class C to grassland.
e) PRF to assist in the funding of transforming sugarcane farms from class C to class B and from
class B to class A (total area of 18380 ha consisting of both conversions).
f) PRF to assist in the funding of transforming 1390 ha of grazing land from class C to class B.
The anomaly observed from the current regulatory framework, especially the one that encompasses
nutrient offset policy as the approach used, may act as disincentive to the prawn aquaculture industry
which has proven to generate more social benefits in terms of higher financial returns and to be less
detrimental to the environment. Therefore, to avoid a large disincentive to the prawn aquaculture
industry, the approach needs to be modified and transformed into a more conducive regulatory
environment.
I assert that one of the ways to realign and re-strategize the regulatory framework is to change the
land use in certain regions. This is in accordance with the recommendation made by the GBR Water
Science Taskforce in its report in 2015 which concluded that even if all the sugarcane landholders and
the graziers adopt the class A of BMP, the target set to achieve in the Reef Plan will still not be
achievable. Therefore, there is a clear need for new technology, innovation and diversification or
transformation in land use (Great Barrier Reef Water Science Taskforce, 2015).
Firstly, it is vital to identify which region contributes to the highest level of nutrient pollution to the
GBR waterways (Great Barrier Reef Water Science Taskforce, 2015). The identified region will then
undergo at least some change of land use into a more sustainable industry which reduces the nutrient
pollution in the GBR catchments.
Based on the 2014 Reef Plan report card, the management priorities remain the nitrogen from
sugarcane and the erosion issue from grazing (Reef Plan, 2014a). The highest overall relative risk
83
region is Wet Tropics which covers 22,000 km2 and the primary issue of this region is the nitrogen
emission mainly from sugarcane and its pesticide use (Reef Plan, 2014a).
Since the Wet Tropics is the main region that contributes to the nutrient loads to GBR and the pollutant
yield per area was the highest for Wet Tropics and Whitsundays regions that are mainly farmed for
sugarcane and other intensive activities (Joo et al., 2012, Kroon, 2012), it would be wise and advisable
to consider replacing certain hectares of sugarcane farms in Wet Tropics with prawn aquaculture. This
is also supported by the plans made in Reef 2050 Plan in which the two main regions, Wet Tropics and
Burdekin, are the main contributors of nutrient run-off for the COTS outbreak in GBR (2016).
2) Retire certain cropping lands for conservation and restoration
In order to be able to maximize profitability and to minimize detrimental impact to the GBR, efficient
land use planning is crucial. As postulated by Kroon et al 2016, certain cropping land should be retired
as one of the means to significantly reduce pollutant runoff to the GBR (Kroon et al., 2016).
Although prawn aquaculture is relatively new in comparison to other agricultural industries such as
the sugarcane industry, it should be given a priority for development due to the associated
environmental benefits. Furthermore, the need to shut down some conventional farms and save them
for conservation is arguably more pressing in view of the Reef Report Card 2014 revelation that there
is a decrease in the wetlands and riparian areas (Queensland Government, 2015b).
3) Better regulatory framework
As investigated earlier in this chapter, the voluntary setting of the current policy framework is unlikely
to be effective in solving the deterioration of the coral reef in GBR. Therefore, learning from past
mistakes and acquiring knowledge from the experience of other countries that have successfully
resolved similar issues are essential. The principal research scientist at AIMS, Dr Frederieke Kroon,
recommends three key steps for protecting the reef, one of which is a modification in the current
environmental legislation (Dorsett, 2016, Kroon et al., 2016). This is because several studies have
shown that the voluntary approach alone is inadequate for addressing a big challenge such as
protecting the GBR which requires a wide scale of change (van Grieken et al., 2013, Great Barrier Reef
Water Science Taskforce, 2015, Roberts and Craig, 2014). The coral reef in the GBR is already facing
high mortality rates and immediate intervention is needed.
Therefore, a mix of policy instruments would most likely produce the desired results faster and the
aim to reach the long term Reef Plan 2050 goal may then be achievable. One of the issues that may
84
need further justification is, “Why are only the point source polluters supposed to follow and abide by
the zero net nutrient emission policy whereas the diffuse source polluters are receiving grants to
adopt BMP uptake through the government funds or through Nutrient Offset Policy by the point
source polluters?”.
Furthermore, the latest innovation in prawn aquaculture water treatment systems (in Guthalungra
prawn farm) allows clean water to be produced (see Figure 8). This shows that the prawn aquaculture
industry has the potential to improve the water quality which is a valuable feature for an industry.
Moreover, prawn farmers have always adopted the best available treatment systems and they have
spent so much of their efforts and funds for the industry-led researches and investigations in
developing the best technology to operate environmentally sustainable – from the invention of
settlement and bioremediation ponds (O'Sullivan, 2010), the use of biofloc to reduce pond nutrient
(O'Sullivan, 2011), and in assisting the policy makers in setting the maximum nutrient discharge by the
industry-led body CRC. For example, the operational policy for prawn aquaculture pertaining to
wastewater discharge which was approved in 2001 was based on the work done CRC (Department of
Environment and Heritage Protection, 2013).
Even though the prawn farmers were subjected to numerous regulations specifically for operating
adjacent to the GBR and also due to its nature of being a point source polluter, they always conformed
to the discharge limits and built the settlement ponds (O'Sullivan, 2010). It is understandable that the
‘grandfathering’ policy is applicable and that other agricultural diffuse polluters are not subjected to
the strict regulations as faced by the prawn farmers. Nevertheless, it is evident that the reef can take
no more additional stressors such as elevated nutrient from the agricultural industries. Therefore, all
industries need to work hand-in-hand to ensure that the status of the GBR as ‘a natural wonder of the
world’ is retained.
85
CHAPTER 4 Economic Analyses of the Industries operating adjacent to
the Great Barrier Reef
4.1 Introduction
The growth of the prawn aquaculture industry has escalated enormously worldwide and many
countries have embraced the potentially high economic returns associated with this industry.
Although the aquaculture industry is booming globally, in places such as in China, Thailand, India and
other countries, Australia has been importing shrimps with a value of around $135 million to $150
million annually from the year 2007 to 2010 (ABARES, 2010). 66% of Australia’s seafood consumption
appears to be from imported produce in 2012 to 2013 (ABARES, 2014). Due to the premium quality of
Australian seafood products, a proportion of the local seafood products are exported overseas
(Deparment of Agriculture, 2015, APH, 2016). Australian products are also favoured by local
consumers and they are willing to pay a little more. The legislation which requires labelling of country
of origin for all seafood sold in Australian retail outlets also assists consumers in making informed
purchases (Deparment of Agriculture, 2015). Undeniably, competition with cheaper imported seafood
products exists but the APFA has been carrying out strong marketing to promote Australian seafood
products with emphasis on the benefits such as Australia’s “clean and green reputation” and the
avoidance of potential biosecurity risks (APH, 2016). Furthermore, the latest outbreak of white spot
disease detected on prawn farms located in Queensland has led to the Federal government’s
suspension of raw green prawn imports from countries such as China, Thailand and Vietnam (Bettles,
2017). Therefore, the current incident further reinforces the need to protect the local prawn industry
and to support its “clean and green reputation”. Due to the ban on imported raw green prawns, it may
be likely that a higher demand for local prawns will follow.
In this chapter, the net present value (NPV) approach is used as the method for economic assessment.
It is imperative to investigate if the transition of sugarcane farms to adopt BMP is economically
effective or the conversion to prawn aquaculture is more favourable. Neoclassical economists use the
concept of ‘utilitarianism’ in making social, economic or political decisions for the society
(Investopedia, 2016), that is, the industry that gives greatest benefits should be given priority for
development or expansion. Thus, the ultimate goal is to determine and develop the industry which
can offer optimal economic returns while preserving or improving the environment. This chapter
focuses mainly on the analysis of economic benefits of the prawn aquaculture and sugarcane industry.
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4.2 Data and Methods
Due to the need to identify new potential land use for the management priority region such as the
Wet Tropics to achieve the target set in the Reef Plan (NESP, 2016), the feasibility of converting certain
size of sugarcane land in this region is investigated in this chapter. The new potential land use should
have the potential to bring economic and environmental benefits compared to the current practice of
BMP, in which the sugarcane holders implement the transition according to the ‘ABCD’ framework.
Reliable reports from the national science agency, CSIRO, have been used for the economic analysis
of the transition of the sugarcane farms in the Wet Tropics to better management practices entitled,
‘Implementation costs of Agricultural Management Practices for water Quality Improvement in the
Great Barrier Reef Catchments’ (Grieken et al., 2010a) and ‘Economic Analysis of Sugarcane Farming
Systems for Water Quality Improvement in the Great Barrier Reef Catchments’ (Grieken et al., 2010b).
For the purpose of this study, the economic analysis of prawn aquaculture is based on the data from
the report, ‘Economic Assessment of Aquaculture in the Bowen-Burdekin Aquaculture Precinct’
(Queensland Department of Primary Industries and Fisheries, 2008).
Determine the GVP of prawn aquaculture and sugarcane
farming in QLD.
NPV Analysis
• Determine the NPV for the transition of sugarcane
farms in the Wet Tropics for the adoption of BMPs
through the ‘ABCD’ framework.
• Compare the NPV per hectare for both prawn
aquaculture and sugarcane farming.
• Determine the NPV of converting marginal cane
land to prawn aquaculture in the Wet Tropics.
Figure 13. Economic analysis of prawn aquaculture and sugarcane farming in QLD.
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4.3 Results
4.3.1 Gross Value Production (GVP) per hectare
4.3.1.1 Sugarcane farming in QLD
The GVP per hectare for sugarcane farming in QLD is based on the data obtained from the Queensland
Treasury Statistician’s Office for the year 2014-15. Please refer to Table 30 for the GVP by commodity.
Sugarcane GVP in Queensland = ($ 1,239 millions) (Queensland Treasury, 2015) Total sugarcane farm area in Queensland (561,706 ha) (Shephard, 2016)
= $ 2206/ha/yr.
Table 30. The GVP of sugarcane in Queensland (Queensland Treasury, 2015).
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4.3.1.2 Prawn aquaculture in QLD
The GVP per hectare for prawn aquaculture in QLD is based on the data obtained from the Ross
Lobegeiger Report to Farmers for the year 2014-15. Table 31 below depicts the gross value by sector
in QLD.
GVP prawn aquaculture in QLD Prawn farm pond area in QLD = $82.6 million = $145,000/ha/yr. 569 ha Source : Ross Lobegeiger Report to Farmers 2014-15 (Heidenreich, 2015).
Table 31. Gross value by aquaculture sector in QLD ($ million) (Heidenreich, 2015).
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4.3.2 NPV Analysis
4.3.2.1 CASE 1: To continue sugarcane farming in the Wet Tropics by changing sugarcane
management from class C to class B and class A.
The Scientific Consensus Statement (Reef Water Quality Protection Plan, 2013) revealed that the most
serious threat to the GBR is from nitrogen discharge that leads to the COTS outbreak. As fertiliser is
the main source of DIN in the GBR water pollution (Armour et al., 2009, Hammill et al., 2015), this
study focuses on DIN reduction in the GBR waterways.
The analysis on financial-economic benefits of sugarcane growers’ transition to improved cane
management is based on the report entitled, ‘Economic Analysis of Sugarcane Farming Systems for
Water Quality Improvement in the GBR Catchments’ (Grieken et al., 2010b). In the report, the Farm
Economic Analysis Tool (FEAT) for sugarcane farms was used as the tool to calculate the regional gross
margins and financial indicators for farms operating in a specific system (Grieken et al., 2010b).
Farming systems are classified in the ‘ABCD’ framework as shown in the following table.
Table 32. The classification of 'ABCD' management framework for sugarcane farms (Grieken et al., 2010a).
Assumptions
The results of the financial economic analysis shown in the ‘Economic Analysis of Sugarcane Farming
Systems for Water Quality Improvement in the GBR Catchments’ are based on the following
assumptions (Grieken et al., 2010b). The analysis illustrates the economic impact when sugarcane
farms adopt different management practice class.
Table 33. The assumptions for the economic analysis for the transition of sugarcane farms in the ‘ABCD' framework in the Wet Tropics region (Grieken et al., 2010b).
Factor The asssumptions for the economic analysis of sugarcane farm in Wet Tropics
Soil type Coom (clay)
Sugar price $349.30 per tonne (based on the average from the year 2005 to 2009)
Farm size 120 ha
CCS 12.86
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Contract harvesting • $7.50/tonne without GPS guidance for class B, C and D
• $7.80/tonne with GPS guidance for class A
Contract planting • $360/ha without GPS guidance for class C and D
• $370/ha with GPS guidance for class B
• $400/ha with GPS guidance for class A
Contract spraying $30/ha
Fuel price $0.85/L
Labour cost $30/hour
Soil test $130/test
Leaf test $50/test
Transaction cost Not captured in the report (e.g. time taken to learn about the transition or to purchase new equipment)
Implementation (capital) costs in the Wet Tropics region for sugarcane farms
Table 34. The capital costs to implement changes for the transition of the sugarcane farms management class (Grieken et al., 2010b).
Capital Items Cost ($)
‘D’ to ‘C’ class
• No capital investment TOTAL
0 0
‘C’ to ‘B’ class
• Stool splitter fertiliser box
• Sprayer modifications
• Harvester modifications
• Farm tractor modifications TOTAL
40,000
5,000 12,500
1,500 59,000
‘B’ to ‘A’ class
• GPS on farm tractor
• Shielded sprayer
• Ripper/Rotary Hoe modifications TOTAL
40,000 28,000 20,000 88,000
NPV Analysis of the sugarcane farms in Wet Tropics
In converting the future cash flows of a 120-ha sugarcane farm’s operations into present values, a
discount rate of 7% has been used for the 5-year and 10-year analysis. The tables below show the
NPVs when the sugarcane farm changes from one management class to another (Grieken et al.,
2010b). The longer period of the investment time period, the higher the NPVs are as the cumulative
cash flows are able to offset the initial capital outlay.
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Table 35. The regional NPVs calculated for a 120-ha sugarcane farm in the Wet Tropics as analysed by using 7% discount rate in Grieken (2010b).
Table 36. The regional NPVs per hectare calculated for the 120-ha sugarcane farm in the Wet Tropics.
Transition in management class
Net Capital Investment
NPV per Ha (10-year analysis)
NPV per Ha (5-year analysis)
D class to C class $0 $608.50 $355.23
C class to B class $59,000 $587.82 $138.51
B class to A class $88,000 -$539.57 -$620.22
Nevertheless, the economic analysis above illustrates that the NPVs are only positive when the
transition of ‘D’ to ‘C’ class or ‘C’ to ‘B’ class take place. The transition to class ‘A’ leads to negative
NPVs. Sugarcane holders will only consider the transition that lead to positive NPVs.
Based on the report, the estimated of total cane harvested in the Wet Tropics based on four different
soil types are shown below using APSIM simulations. Transition to class A is not attractive for the
landholders although it is the most environmental-friendly.
Table 37. The yields based on different farming class management in the Wet Tropics (Grieken et al., 2010a).
S1: well-drained sandy loam soil of granitic origin; S2: loam soil, poorly drained formed on alluvium; S3: red clay loam soil, slowly drained formed on basaltic rock origin; S4: to a medium to heavy clay soil (well drained formed on alluvium).
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4.3.2.2 CASE 2: To convert marginal sugarcane farms in Wet Tropics to prawn
aquaculture.
One of the numerous efforts taken by the Australian government to save the GBR is through funding
research which aims to reduce the main threats to the GBR, especially in the management priority
catchment, the Wet Tropics region (NESP, 2016). The Australian Government’s National
Environmental Science Programme (NESP) supports and funds the project, ‘Scoping options for low
lying, marginal cane land to reduce DIN in priority wet tropics catchments’. The objective of this project
is to facilitate in finding alternative land use for marginal cane land in the Wet Tropics catchments to
reduce nitrogen loads and to generate income (NESP, 2016).
The Wet Tropics Water Quality Improvement Plan (WTWQIP) also acknowledged that complete
adoption to best management practice by the sugarcane holders would still be insufficient to meet
the GBR Water Quality Guidelines of reducing 70-80% DIN in Wet Tropics region (NESP, 2016). Even
complete adoption of Class A sugarcane management practice will only lead to 30% DIN reduction in
the Wet Tropics (NESP, 2016). Hence, this project (NESP) focuses on identifying alternative land use
for marginal, low-lying cane lands that have the capacity to reduce nitrogen loads. One of the
alternative industries considered includes aquaculture (NESP, 2016).
The conversion of sugarcane farm into prawn aquaculture is not new and is possible as already shown
with Tru Blu Farms in New South Wales (OzAquaculture, 2015). Furthermore, as stated in the
Queensland Competition Authority (QCA) report, the type of land suitable for aquaculture and
sugarcane farming is similar; flat, low-lying coastal land (QCA, 2014). Tru Blu Farms, was initially a 40-
hectare sugarcane farm but was then converted to a prawn farm (OzAquaculture, 2015).
QCA (2014) in its final report also stated that the land productivity of aquaculture is around 20 times
higher than the existing crop such as sugar cane.
In the NESP project mentioned above, the framework outlined for finding alternative land use options
for cane land is as follows (NESP, 2016):
1) Geographic information system (GIS) mapping
To use GIS mapping to identify low-lying and marginal cane land in the Wet Tropics
catchments such as Herbert, Russell-Mulgrave, Johnstone or Tully/Murray catchments.
2) Evaluate site options
Determine alternative land use options based on site typologies such as info on the current
geology, flooding, elevation, current agricultural production and saline intrusion.
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3) Economic analysis
Determine the costs (e.g. conversion cost, maintenance), the foregone gross margin from the
existing cane farm and the revenues estimated from the alternative land use.
4) The feasibility of implementing change in land use
To qualitatively assess the social, economic and environmental implications through
consultation with the stakeholders such as the community, government and industry for the
change implementation. The mechanism to facilitate change such as the land (e.g. buy-back,
lease land) is explored.
This focus of this thesis chapter is to prepare an economic analysis on the conversion of certain
hectares of sugarcane farm in Wet Tropics to an alternative land use, specifically prawn aquaculture.
Wet Tropics land conversion pathway options
Cane land conversion pathway
options
• Convert the existing
sugarcane farm to prawn
aquaculture by purchasing
the land from sugarcane
farmer (e.g. buy-back, lease
land).
• Convert existing sugarcane
farm to prawn aquaculture
with the agreement with the
sugarcane farmers as a new
business option for them.
Implication:
1) Less capital cost as the land cost
is excluded (Opportunity costs
needs to acknowledged).
2) A need to educate the sugarcane
holders on aquaculture practice for
the land transformation.
Implication:
1) Higher capital cost for the purchase
of land.
*For the purpose of this thesis, this
scenario is used in calculating the
NPV.
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The assumptions used in constructing the financial economic model for prawn aquaculture are as
follows (Queensland Department of Primary Industries and Fisheries, 2008):
Parameter Assumption
Area of ponds (100 @ 1.0 ha) 100
Saleable farm biomass per year (kg) 800,000
Crops per year 1
Average weight at harvesting (g) 30
Feed conversion ratio 1.7:1
Death rate (%) 35
Note:
• It is assumed that the costs (other than the land cost) are similar between Bowen-Burdekin and the Wet Tropics.
• Transaction costs and opportunity costs are not captured in this analysis.
• Taxation is not included in the analysis.
• Residual value has been excluded from the analysis.
4.3.2.2.1 Cash Outflow
Capital costs
The data on the costs involved in establishing a prawn farm is based on the Economic Assessment of
Land Based Marine Prawn Aquaculture for the Bowen-Burdekin Aquaculture Precinct (Queensland
Department of Primary Industries and Fisheries, 2008) except for the land cost. The land cost is based
on the latest (year 2017) land purchase price in Ingham, Wet Tropics which was previously a cane land
(Felix Reltano Real Estate, 2017).
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Table 38. The capital costs based on a prawn farm in Bowen-Burdekin for a 100ha farm. Data adapted from the report for the prawn farm proposed in Bowen-Burdekin (Queensland Department of Primary Industries and Fisheries, 2008).
Capital Item Units Unit Cost ($) Total Cost ($)
Land and Buildings Land in Ingham, Wet Tropics (ha) (Felix Reltano Real Estate, 2017) 150 $12,000 $1,800,000
Office and Equipment - $30,000 $30,000
Staff Accommodation 2 $60,000 $120,000
Processing Room - $250,000 $250,000
Coldroom and Fixed Equipment 1 $750,000 $750,000
Sheds (Maintenance / Feed) 2 $100,000 $200,000
Electricity Connection - $160,000 $160,000
Vehicles and Machinery Utility 2 $30,000 $60,000
Motorbike(s) 4 $10,000 $40,000
Truck(s) 2 $50,000 $100,000
Tractor (Second Hand) 2 $20,000 $40,000
Mower/Slasher 1 $4,000 $4,000
Other Plant 0 $0 $0
Boat(s) 2 $2,000 $4,000
Pond related expenditure Pond construction 100 $40,000 $4,000,000
Pond piping and infrastructure 100 $10,000 $1,000,000
Pond electricity connection 100 $8,000 $800,000
Aerators 1,000 $950 $950,000
Moorings and Walkways 200 $200 $40,000
Channels and drains - $400,000 $400,000
Settling pond(s) 2 $120,000 $240,000
Pumps (sheds, valves, filters) 5 $50,000 $250,000
Other Infrastructure and Equipment Generator 4 $20,000 $80,000
Rotary Hoe/Discs 1 $15,000 $15,000
Fertiliser Spreader 2 $1,500 $3,000
Feed Blower 2 $8,000 $16,000
Prawn Cookers 10 $3,000 $30,000
Bulk Bins 50 $1,000 $50,000
Water Monitoring Equipment 3 $8,000 $24,000
Harvesting Equipment - $8,000 $8,000
Prawn Weigh Scales 2 $3,000 $6,000
Pallet Jacks 3 $1,500 $4,500
Ice Machine 1 $75,000 $75,000
Prawn Grader 2 $50,000 $100,000
Prawn Washing Machine 2 $3,000 $6,000
Processing Equipment - $10,000 $10,000
Workshop Tools and Equipment - $40,000 $40,000
Inspection Table 2 $4,000 $8,000
Water Allocation (ML) 700 $250 $175,000
Total $11,888,500
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Operating costs
The operating costs of a prawn farm mainly comprise of the following components (Queensland
Department of Primary Industries and Fisheries, 2008):
1) Feed
The estimated amount of feed required is 1,360 tonnes annually as the feed conversion ratio is 1.71
and based on 800 tonnes of a farm biomass. The average cost of the range of feeds used is
approximately $1,564 per tonne (inclusive of freight). Hence, the total feed cost is $2,127,040
annually.
2) Labour
- Allowance for the farm owner/operator is $90,000 per year.
- Permanent employees of 15 people which amount to $1,028,308.
- The 15 employees consist of three skilled permanent staff and 12 permanent labourers.
- During the periods of harvesting and processing, casual staff is hired and the rate used is $17.50/hour
and the allowance allocated for casual labour is 10,000 hours.
3) Fuel, Oil, Repairs and Maintenance (FORM)
Regular maintenance is required for pumps, testing equipment, aerators and other infrastructure
which is estimated to cost $150,000. A total of $190,000 is allocated for the overall FORM which
includes fuel cost.
4) Electricity
The annual cost of electricity is approximately $528,000 for the electric pumps, aerators and other
infrastructure such as cold rooms, ice machines and houses.
5) Fees – Licenses and Permits
An allowance of $10,000 is allocated for licenses and permits as approval for aquaculture
establishment is required from many levels, such as local government, Department of Natural
Resources, Department of Primary Industries and the Department of Environment and Heritage
Protection.
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6) Processing and Marketing
Table 39. The breakdown of the costs for marketing and processing of Penaeus monodon (Queensland Department of Primary Industries and Fisheries, 2008).
Size Classes Green IQF Retail
Cooked
Cooked
(Styro Pack) Cooked IQF
31 to 40's (11-15g)
Price per kg $9.00 $9.00 $9.00 $9.00
% of size class 24% 45% 8% 23%
Kilograms 7,680 14,400 2,560 7,360
21 to 30's (15-23g)
Price per kg $13.00 $13.00 $13.00 $13.00
% of size class 24% 45% 8% 23%
Kilograms 28,800 54,000 9,600 27,600
16 to 20's (23-30g)
Price per kg $14.75 $14.75 $14.75 $14.75
% of size class 24% 45% 8% 23%
Kilograms 76,800 144,000 25,600 73,600
10 to 15's (30-45g)
Price per kg $17.00 $17.00 $17.00 $17.00
% of size class 24% 45% 8% 23%
Kilograms 67,200 126,000 22,400 64,400
Under 10's (> 45g)
Price per kg $18.50 $18.50 $18.50 $18.50
% of size class 24% 45% 8% 23%
Kilograms 11,520 21,600 3,840 11,040
The processing costs of the prawns based on different size classes and categories are as shown above.
The assumption made is the prawn products are primarily sold in Brisbane, Melbourne and Sydney
market as most QLD prawn farmers sell domestically.
It is assumed that the estimation of the freight costs is to be $0.65/kg of prawn product with 3.5%
paid for the agent’s commission. Hence, the total cost of processing (includes packing and ice) and
transportation is around $1,250,345 annually.
7) Pond management
In managing the ponds, some of the expenses involved are the purchase of lime, fertiliser and
chemicals such as dyes and chlorination which amount to $22,000 annually.
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8) Administration
Administration expenses include insurance, legal fees, travel (conferences), office supplies, medical
supplies for prawn health and vehicle registrations. An allowance of $193,200 annually is allocated for
this purpose.
9) Water usage
The evaporation of water from the ponds requires the use of fresh water to compensate and it is
estimated to be $400 per megalitre. The evaporation rates are not as high as the dry tropics Bowen-
Burdekin as the proposed cane land conversion is in the Wet Tropics region. However, it is assumed
that the evaporation rate is similar for the purpose of this study; so 700 megalitres of fresh water is
estimated to be required annually, which costs $280,000.
Summary of Production Costs (annual)
Table 40. The summary of the operation costs of 150 ha prawn aquaculture pond (Queensland Department of Primary Industries and Fisheries, 2008).
Cost Amount ($)
Feed 2,127,040
Labour 1,028,308
FORM 190,000
Electricity 528,000
Licenses & Permits 10,000
Processing, marketing, transport 1,250,345
Administration 193,200
Pond management 22,000
Water usage 280,000
Post larvae 700,823
Capital 973,122
TOTAL 7,302,838
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4.3.2.2.2 Cash Inflow
Revenue
The average price of prawn products used in this study is $15.27 per kg. The prices used in this study
are according to the industry survey conducted by Ross Lobegeiger (the DPI aquaculture extension
officer) (Queensland Department of Primary Industries and Fisheries, 2008).
The scale of the farm size considered is due to the fact that most of the prawn farms in QLD operate
using 100 hectares of ponds on average, and each hectare produces around 8 tonnes of prawns
annually. Therefore, a gross revenue of $12,216,000 is expected to be achieved.
4.3.2.3 NPV for prawn aquaculture
NPV analysis – base case
• Project length: 10 years
• Total area of model farm: 150 ha for 100 ha prawn ponds.
(The additional 50ha is the allowance for infrastructure and settlement ponds).
• Capital costs $ 11,888,500
• Annual operating costs $ 7,302,838
• Revenue $ 12,216,000
Table 41. NPV analysis for prawn farm using different discount rates under the base case.
Discount
rate
NPV
(150 ha land which consists of 100 ha prawn ponds + 50 ha
of settlement pond and infrastructure)
NPV per ha
7% $22,619,494 $ 150,797
10% $18,300,754 $ 122,005
12% $15,871,961 $ 105,813
15% $12,769,523 $ 85,130
Based on the base case, the NPVs for prawn aquaculture in the Wet Tropics lead to positive NPVs even
with different discount rates used such as 7%, 10%, 12% and 15%. Therefore, this project investment
100
is deemed feasible to be undertaken in the region. Note that the values might be different for different
prawn farmers due to other various factors such as land, vicinity to infrastructure and others. To
simulate the potential risks such as increased costs, Table 42 illustrates the NPVs in this scenario.
NPV analysis if costs increase by 20%
Annual operating costs and capital costs of operating prawn farm increase by 20%.
• Capital costs $14,266,200
• Annual operating costs $ 8,763,406
• Revenue (unchanged) $ 12,216,000
Table 42. NPV analysis for prawn farm using different discount rates if costs increase by 20%.
Discount rate NPV (150 ha land) NPV per ha
7% $ 9,983,375 $ 66,556
10% $ 6,948,496 $ 46,323
12% $ 5,241,726 $ 34,945
15% $ 3,061,570 $20,410
As shown in the table above, the NPVs for establishing prawn aquaculture are also positive even with
the increase of costs by 20%. A sensitivity analysis of various discount rates used also show that the
NPVs remain positive under this scenario.
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4.3.2.4 NPV analysis comparison for the use of 100ha land in the Wet Tropics
Table 43. The comparison of NPV when the cane land is used for transition into better class management or by converting it to prawn aquaculture.
Industry scenario NPV per ha ($) NPV for 100ha
($)
100 ha sugarcane farm transition from class C to B
(7% discount rate in a 10-year timeframe).
588 58,800
100 ha sugarcane farm transition from class B to A
(7% discount rate in a 10-year timeframe).
-540 -54,000
100 ha sugarcane farm converted to prawn aquaculture
(by using 7% discount rate in a 10-year timeframe).
66,556 6,655,600
100 ha sugarcane farm converted to prawn aquaculture
(by using 10% discount rate in a 10-year timeframe).
46,323 4,632,300
100 ha sugarcane farm converted to prawn aquaculture
(by using 12% discount rate in a 10-year timeframe).
34,945 3,494,500
One of the ways to determine which project or industry that has the superior economic benefits for
the cane land in the Wet Tropics is to compare the NPVs as shown in Table 44. The transition of the
cane land from class C to B generates positive NPVs but the transition to class A may not be feasible
as the sugarcane farmers will experience loss.
The conversion of the cane land to prawn aquaculture generates greater positive NPVs even though
higher discount rates than 7% are used. This shows that the conversion of the cane land to prawn
aquaculture may be a more suitable option to ensure the return of economic benefits.
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4.4 Discussion and Conclusion
This chapter investigates the economic benefits of sugarcane farming and prawn aquaculture in the
Wet Tropics region. As the Wet Tropics is one of the main priority management regions, it is vital to
ensure that the main threat to the GBR is eliminated through an alternative use of the sugarcane land,
which contributes to the high level of DIN released into the GBR waterways. Therefore, this chapter
explores the possibility of converting a marginal sugarcane land in the Wet Tropics into prawn
aquaculture.
It has been shown that the GVP for sugarcane farming and prawn aquaculture are $2,206/ha/yr and
$145,000/ha/yr respectively. This chapter further explores the NPVs of both industries in which the
transition of sugarcane farms from class D to class C and B would generate positive NPVs but the
transition to the aspirational class A will result in negative NPVs. It is imperative to reiterate that the
complete adoption of best management practice by the sugarcane farms in the Wet Tropic region will
still be insufficient to reach the goals set in the Reef Plan to safeguard the GBR from further
deterioration (NESP, 2016).
Therefore, a new potential land use for the region is investigated and one of the options is prawn
aquaculture. This chapter illustrates that that the conversion of marginal sugarcane land in Ingham,
Wet Tropics into prawn aquaculture will generate positive NPVs. A sensitivity analysis such as different
discount rates used also show that the NPVs would still maintain positive. This suggests that the
conversion of the cane land into prawn aquaculture may be feasible. The project (NESP, 2016) also
outlined some of the main steps needed to investigate the alternative for cane land for better
protection of the GBR by ensuring the water quality is improved.
The potentially high financial return from prawn aquaculture industry may be evident in the case of
Guthalungra prawn farm in which the Pacific Reef agreed to proceed with the development even with
the stringent regulatory in place. Specifically, the Pacific Reef has proven that it can operate based on
the ‘zero net discharge’ condition by: (i) the innovation of the algal bio-remediation step in the
proposed three-treatment system, and (ii) through the nutrient offset strategy required by assisting
the sugarcane industry to improve their land management practices annually at a cost of
approximately $ 95 304 for the 1680 ha of cane land (The Parliament of the Commonwealth of
Australia, 2016). This may suggest that only with the potentially enormous revenue ($50 million per
annum) from prawn aquaculture farm that they proposed at Guthalungra, that the Pacific Reef agreed
with the requirements which incur significant extra costs to them. Furthermore, the applications for
the Guthalungra prawn farm development approval have caused Pacific Reef a huge amount of $3
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million in the span of 14 years (The Parliament of the Commonwealth of Australia, 2016). In this thesis
chapter, the NPVs calculated may further validate the potentially high profitability from prawn
aquaculture development.
When the sustainability aspect of both sugarcane farm and prawn aquaculture is compared, it shows
that the latter has the financial capacity to operate sustainably in the GBR catchments whereas the
former struggles to adopt even the best management practice.
Some of the limitations in the economic analysis presented in this chapter are the exclusion of taxation
and transaction costs. For the sugarcane economic analysis, the transaction costs include the time
spent to purchase and learn the new equipment necessary for the transition in the sugarcane ‘ABCD’
framework. The same also applies for the economic analysis of the prawn aquaculture in which the
transaction costs excluded are the time spent to educate potential farmers to start prawn aquaculture
and to learn using the new equipment. In summary, the exclusion of the transaction costs (e.g. time
spent to purchase and to learn new equipment) applies for both the analysis made for sugarcane
farming and prawn aquaculture as mentioned in the assumption. Major costs such as the capital costs
to purchase new equipment for the transition to improved management practices and the preparation
for settlement ponds have all been included in the economic analysis for the sugarcane farms and
prawn aquaculture respectively.
Furthermore, it is important to acknowledge that further analysis and financial modeling may be
necessary to investigate the impact of prawn-related diseases such as white spot disease on the
industry’s NPVs, such as in the case that happened to prawn farms on the Logan River recently (Briggs
and Cluff, 2017). Since the white spot disease outbreak occurred after the initial submission of this
thesis, it is important to acknowledge the need to include this possibility in the future analysis of NPV.
This disease outbreak has caused a major alarm in Australia especially the aquaculture industry and
crop diversification (e.g. gropers) may be an option for the prawn farmers until the industry recovers
again (Briggs and Cluff, 2017).
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CHAPTER 5 Conclusions
5.1 Introduction
This thesis primarily analyses the key selected industries operating adjacent to the Great Barrier Reef
(GBR) with the objective to move forward in the direction of improving the resilience of the GBR in
order to protect it from further deterioration. Due to the fact that the GBR is in the state of serious
need of recovery and the main priority region identified for management is the Wet Tropics, this thesis
investigates the potential environmental and economic benefits of an alternative land use such as
prawn aquaculture. The need for an alternative land use has been acknowledged by many sources
such as Dr Frederieke Kroon (Kroon et al., 2016), the GBR Water Science Taskforce (Queensland Audit
Office, 2015) and the National Environmental Science Program (NESP, 2016). This is primarily because
it has been determined that even with complete implementation of sugarcane best management
practice, this will still not be sufficient to achieve the nutrient reductions as set in the GBR Water
Quality Guidelines. The main focus of this thesis is on nitrogen reduction as dissolved inorganic
nitrogen (DIN) leads to crown-of-thorn starfish (COTS) outbreak which is a top threat to the GBR.
This thesis also discovers the errors detected in the Jacobs SKM benchmark study and suggests other
ways (e.g. bioindicators) in comparing environmental impacts of the industries which have different
nature of pollution as shown in chapter 3. The approach used by Jacobs SKM benchmark study in using
the same parameter ‘nutrient per hectare’ to compare sugarcane industry with prawn aquaculture
may not be the best way to correctly conclude which industry poses higher environmental risk to the
GBR due to the different nature of pollution.
Another main objective of this thesis is to analyse the laws passed on aquaculture and other
agricultural industries operating adjacent to the Great Barrier Reef. Since the GBR is listed as the
World Heritage Area, the location of aquaculture adjacent to GBR is covered by the Commonwealth
legislation and this leads to arrays of regulatory complexities (CIE, 2014).
Furthermore, the main challenge faced in achieving the Reef Plan targets was also investigated.
Diffuse source pollution such as from sugarcane farming is only regulated through voluntary approach
and that the adoption of best management practice is slow and is insufficient to achieve the Reef Plan
targets. Whereas the point source pollution, through end-of-pipe, such as from prawn farming seems
to be strictly regulated since its inception and this industry has demonstrated its capacity to fulfil the
increasing requirements to operate sustainably such as the requirement of ‘zero net discharge’
through the innovation of algae bioremediation water treatment system and by funding the sugarcane
105
farmers to adopt improved management practices. This suggests that prawn aquaculture has
potentially high profitability as it can innovate the needed water treatment system to operate
sustainably and also as it can assist in funding sugarcane farmers to adopt BMP. Chapter 4 of this thesis
also illustrates the potentially high NPVs that this industry can generate.
Although it might be easier to monitor the pollution from ‘end-of-pipe’ point source pollution such as
prawn aquaculture, it is imperative to note that this may deter future investments in this potentially
lucrative industry. Moreover, the main source of pollution (e.g sugarcane industry) needs to be
addressed quickly instead of focusing on the fraction of the pollution contributor. Even though the
‘grandfathering’ policy may apply to the sugarcane industry, the condition of the GBR calls for drastic
intervention in which the adoption of BMPs is just not enough to cause a change to the water quality
of the GBR as mentioned previously.
5.2 Recommendations
In summary, the recommendations proposed in protecting the GBR by strengthening its resilience are:
1) To convert marginal cane land to a potentially more sustainable and profitable industry such
as prawn aquaculture.
2) To retire certain cropping lands for conservation and restoration.
3) To impose a more scientifically based regulatory framework.
This is also in accordance with the suggestions made by the Great Barrier Reef Water Science
Taskforce (Queensland Audit Office, 2015) and Dr Frederieke Kroon, Principal Research Scientist at
AIMS, in order to achieve the Reef 2050 Plan’s targets (Kroon et al., 2016).
Due to the potentially higher NPVs from prawn aquaculture in comparison to the transition of
sugarcane farming to BMPs (as shown in chapter 4), a marginal cane land in the Wet Tropics may be
diversified into prawn aquaculture. Moreover, the innovative techniques enabled them to operate
sustainably, especially with the invention of the proposed water treatment system through sand
filtration and algal treatment that can potentially produce cleaner water.
The rest of the sugarcane farms can be restored for conservation and to allow only the sugarcane
landholders which can fully adopt the BMP to continue farming. Through this way, it may be possible
to obtain large economic returns while preserving the GBR. This is because by shutting down certain
106
sugarcane farms in the Wet Tropics, a region which contributes to majority of the DIN runoff into the
GBR, we can directly reduce this nutrient in a faster way than waiting and investing more money into
the voluntary adoption of BMP. Furthermore, as aforementioned, the voluntary BMP adoption is
ineffective and insufficient to achieve the Reef Plan water quality targets.
In relation to that, the amount of funding ($ 146 million) that has been allocated for water quality
grants to encourage the BMP adoption is enormous. Recently, another $45 million has been injected
by the Federal Government with one of the aims to encourage the adoption of BMP. I assert that this
amount of money can be better utilized through the diversification of land use as aforementioned by
preparing the necessary steps needed in order to initiate the transformation.
5.3 Limitations and Future Directions
It is undeniable that the diversification from sugarcane farming to prawn aquaculture requires
significant amount of time, efforts and resources. One of the limitation of this thesis is a detailed study
on the potential transaction costs of the transition to prawn aquaculture such as the costs needed to
educate the potential sugarcane farmers who are interested and the opportunity cost of the time
foregone learning the new industry.
Furthermore, the economic analysis used for prawn aquaculture in this study was mainly based on the
data from a proposed prawn farm in Bowen-Burdekin, Dry Tropics (although the land cost was based
on the data for a cane land in Ingham, Wet Tropics). Therefore, another economic analysis that derives
the potential latest costs and revenue from a prawn farm in Wet Tropics would be beneficial to
compare and validate the findings. Note that the land costing used in the prawn aquaculture economic
analysis was based on the data for a cane land in Ingham, Wet Tropics, which is higher than the land
cost in the Bowen-Burdekin.
As mentioned in the previous chapter, the recent white spot disease that hit the prawn farms on the
Logan River was unexpected due to the reputation of Australian aquaculture industry as to have the
world’s best practice in terms of environmental management (Horvat, 2016). Up until end of 2016,
Australia was one of the only two remaining countries which was free from white spot disease (Horvat,
2016). One of the possible sources of the disease is through the imported prawn that was already
infected which was used as bait by recreational fishers (Horvat, 2016). Following the unfortunate
spread of white spot disease in Queensland, the Australian government has then banned imported
107
prawns to safeguard the local prawn industry. Therefore, constructing NVP analysis by taking account
the possible risks of prawn-related diseases may be necessary in the future. Although this unfortunate
incident may look like a disaster to the prawn aquaculture industry now, it has prompted the
Australian government to implement ban on imported prawns (Silva, 2017). Hence, once the prawn
aquaculture industry recovers later on, it may likely to have a better control of the environment from
the possible prawn-related diseases and potentially a better grip of the local market share as well.
108
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