Kimberley Cropping

Business Plan Gogo Station Pty Limited ABN 94009360963 January 2016

The publication of this business

proposal has been aided by SMK

Consultants.

Copyright 2014 by SMK Consultants

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Kimberley Cropping

Business Plan Gogo Station Pty Limited ABN 94009360963 January 2016

iv

Submission for Discussion of Business Case

Proposal – Kimberly Cropping;

Gogo Station Pty Ltd, October 2014

Water Resource Plan – Kimberly Cropping;

Gogo Station Pty Ltd, January 2016

This business case builds upon the “Submission for Discussion of Business Case Proposal” (referred to

as “the discussion paper”) and “Water Resource Plan” (referred to as “the water resource plan”)

produced by Gogo Station Pty Ltd and SMK Consultants. Topics which overlap between this document

and either the discussion paper or the water resource plan are further expanded upon within the

accompanying document - relevant sections are referred appropriately.

v

Executive Summary

Purpose of Project

The overall aim of the agricultural project is to establish an agricultural enterprise of sufficient size to

generate a viable and self-supporting agricultural export industry on Gogo Station. This could then

support similar opportunities in other parts of the Fitzroy basin.

Benefits of the Project

The project has been designed with consideration to policy and strategic frameworks including the:

Green Paper on Developing Northern Australia (Federal Government); Royalties for Regions (WA

Government) and; Western Australian Regional Development Trust. Accordingly, the project

represents the potential for the West Australian Government to realise several strategic objectives

including:

• Building capacity in regional communities

• Retaining benefits in regional communities

• Improving services to regional communities

• Attaining sustainability

• Expanding opportunity

• Growing prosperity

• Delivering economic infrastructure

• Improving land use and access

• Improving water access and management

• Promoting trade and investment, and strengthening the business environment

• Fostering education, research and innovation

• Enhancing governance

These benefits are touched upon within this document and are discussed in detail within the

discussion paper.

Project Development

The project would be undertaken in three main stages, with each stage being completed before the next stage commences. The Stage 1 development envelope is 8,986 hectares located in the north-west section of Gogo Station (the site). The location of the site is shown in Figure 1. Stage 1 comprises 5,000 hectares of crop area, supporting infrastructure and buffer areas within this envelope. Stage 1 will initially be undertaken through a dryland phase and then the irrigation infrastructure including water storages, water access systems and groundwater bores would be developed to increase productivity and reliability.

vi

Project Costs and Anticipated Funding

Item of Expenditure Budget Source of Funds

Has the Funding been Secured?

Stage 1 Development Proposal

Establishment of tractors and equipment onsite, clearing and cultivation of 5,000 ha @ $420/ha

$2,100,000 Gogo Station Yes. Subject to Land Tenure agreements to

secure capital

Planting and harvesting of dryland sorghum crop – 5,000 ha @ $470/ha

$2,350,000 Gogo Station Crop Finance to be secured,

subject to Tenure agreements.

Construction of grain storage bunker based on average yield of 2 tonnes/ha – 10,000 tonnes to be stored at cost of $25/tonne

$250,000 Gogo Station Subject to Land Tenure

agreements to secure capital

Transport of grain from paddock to storage shed @ $20/tonne

$20,000 Gogo Station Subject to Land Tenure

agreements to secure capital

Transport from storage shed to Broome using road train triples @ $60/tonne

$600,000 Gogo Station Contractors to be secured

Shed storage at wharf and belt loader (400 tonnes/h) to load ships – 8,000 tonne storage shed (assuming use of existing shed)

$250,000

Gogo Station &

WA Government

Subject to obtaining lease on shed

Survey of lease area $35,000 Gogo Station Yes. Subject to Land Tenure agreements to

secure capital

Development of 5,000 ha of irrigation

@ $3,711/ha $18,555,000 Gogo Station

Subject to agreements with Land Tenure, water Licence

approvals

Construction of water storages and pumps systems for 50 gigalitres @ $250/megalitre

$12,500,000 Gogo Station Subject to agreements with Land Tenure, water Licence

approvals

Planting and harvest of 5,000 ha of irrigated sorghum @ $940/ha

$4,700,000 Gogo Station Crop Finance to be secured,

subject to Tenure agreements

Transport of grain to Gogo Station storages – 20,000 tonnes @ $20/tonne (based on average yield of 4 tonnes/ha)

$400,000 Gogo Station

Crop Finance to be secured, subject to Tenure

agreements and Logistics suppliers

Transport of grain from Gogo Station to Broome @ $60/tonne

$1,200,000 Gogo Station Contractors to be secured

Transfer of grain from Broome storage to ship, including storage costs

$400,000 Gogo Station Subject to Wharf

availability.

Total $43,360,000

vii

Stakeholder Consultation

Internal Stakeholders for the project are the Harris Family Enterprise who own Gogo Station and will

act as the project manager, financial controller as well as providing the knowledge and expertise to

ensure the project is successful. SMK Consultants at present have an association with the project in

the form of applying 40-years of irrigation design and environmental management to ensure the

project achieves sustainable goals through innovative design and environmentally sustainable

outcomes. The Harris Family Enterprise intends to provide the majority of the project management

support from existing internal resources.

Additional assistance will be sought from experienced regional services such as the Department of

Water and other Agricultural related expertise available in the region.

External stakeholders include entities which will be directly engaged by the project as well as entities

who will be affected by the project. Entities engaged by the project predominantly include equipment

and service providers while affected stakeholders include communities and government organisations

that may link with the project through service provisions, employment resource opportunities and

knowledge exchanges.

Aboriginal Consultation

The project has the potential to provide significant employment opportunities and incentives for

Aboriginal participation in the enterprise as well as the larger agriculture industry. This potential has

been confirmed by the Gooniyandi Aboriginal Corporation (GAC) who, in their recent publication

stated that the project and their partnership with Gogo will result in the creation of jobs and

opportunities for Gooniyandi people. This participation would be realised through employment and

business opportunities, including the potential development of their own cropping enterprise.

Key Approvals

Numerous approvals from both State and Federal Government have been identified in this Business

Plan. These approvals must be obtained to allow any further advancement of this project. The

approvals primarily relate to:

• The release of current Land Tenure restrictions to a preferred system of fee simple tenure or

similar through the State Government to enable competitive debt funding to be obtained for

the project

• Permission to clear and cultivate the proposed cropping areas for production of agricultural

commodities that are unrelated to Pastoral Production. This will involve both State and

Federal approvals that presently restrict landuse change through native vegetation protection

and National Heritage declarations.

• Approvals to access resources including ground and surface water in the form of both

groundwater and surface water entitlements in addition to approvals for structures such as

dams, channels and levee banks on the floodplain and watercourses within Gogo Station. This

will involve various approvals under the Rights in Water and Irrigation Act 1914.

• Approvals and clearances for a range of cereal and pulse crops to be grown on Gogo Station

to meet demand for both regional and export markets. This would involve approvals through

the Department of Agriculture and Food for the planting of crops that are at present not

approved for the region.

• Access to wharf facilities for shipping of commodities produced on Gogo Station through the

use of Government facilities or privately funded facilities.

viii

Without such approvals, the project will remain in a “do nothing option” as a result of potential

opportunities for similar development and expenditure in other regions, including eastern Australia

within the existing and established agricultural bases of the Proponent.

Potential Barriers to Development or Completion of the Project

Risk Level Mitigation

Land Tenure High Proceed with project on the basis of higher capital risk strategies if land tenure

options cannot offset debt funding options.

Approvals High

Undertake project with restrictions and conditions that would create additional

management constraints and requirements for limitations of production and

landuse capabilities. Environmental management measures are incorporated

within the development proposal in order to meet community and legislative

objectives and perceptions. Such measures would be easily adopted from

existing Best Management Practices which form a key component in existing

agricultural operations undertaken by the Proponent. This would include a fair

and equitable Indigenous Land Use Agreement.

Climate Moderate

A condition that affects production variability in relation to current extended

periods of dry conditions and potential for extreme weather variability of intense

events. The potential for weather impacts on the proposed development must

be established as a factor within budgets with options to delay development

phases if seasonal influences cause the loss of a growing season.

Socio-economic

environment Moderate

The cooperation and involvement of local communities to support and

participate in the development and operation of an agricultural enterprise in the

Kimberley region would significantly advance the potential success of the

operation and therefore continued involvement of the local community and

participation in the proposal would be essential measure of determining the

success of the proposed development.

Long term

production and

extension of an

agricultural

industry with

the Fitzroy Basin

Low

The establishment of a strong agricultural enterprise on Gogo Station involving

production, storage and marketing of various grains would attract additional

investment in the region for similar enterprises. Awareness of the potential of

additional enterprises should be accepted as a benefit through the potential for

cooperative agreement with larger production and sharing of common

infrastructure such as transport and shipping arrangements. Participation of

other similar enterprises should be dealt with as a benefit in marketing success

through increased market and delivery options, rather than competitors. The risk

is therefore considered as low as it would be beneficial to the proposal.

Long term

management of

irrigation

infrastructure

Moderate

The initial development of irrigation infrastructure on the property would require

specialist machinery and skilled operators. The business plan should include

ongoing roles for such machinery and specialist until the machinery has sufficient

scale of operations to remain onsite and attract skilled staff or contractors to

remain available for ongoing works in preference to seasonal high cost

establishment costs for such operations.

ix

Table of Contents

Executive Summary ...................................................................................................................... v

Purpose of Project ............................................................................................................................... v

Benefits of the Project ........................................................................................................................ v

Project Development .......................................................................................................................... v

Project Costs and Anticipated Funding .............................................................................................. vi

Stakeholder Consultation .................................................................................................................. vii

Aboriginal Consultation..................................................................................................................... vii

Key Approvals .................................................................................................................................... vii

Potential Barriers to Development or Completion of the Project ................................................... viii

Table of Contents ........................................................................................................................ ix

Table of Figures ........................................................................................................................... x

List of Tables ................................................................................................................................ x

1 Project Scope and Evaluation ................................................................................................ 1

Background ......................................................................................................................................... 1

1.1.1 The Proponent ................................................................................................................ 1

1.1.2 Agriculture on Gogo to Date ........................................................................................... 1

Project Description .............................................................................................................................. 2

1.1.3 Proposed Land ................................................................................................................ 2

1.1.4 Land to be Excised from Pastoral Lease .......................................................................... 4

1.1.5 Indigenous Land Use Agreement .................................................................................... 4

1.1.6 Legal Access .................................................................................................................... 4

1.1.7 Easements for Water Access ........................................................................................... 5

1.1.8 Granting Interests of Crown Land to Third Parties ......................................................... 5

Project Timeframe and Output ........................................................................................................... 5

1.1.9 Economic and Community Benefits ................................................................................ 6

1.1.10 Direct or Indirect Benefits to the Community, State or Commonwealth ....................... 6

1.1.11 Productivity Benefits or Revenue Generating Capacity .................................................. 6

1.1.12 Development Stages or Timelines .................................................................................. 6

Aboriginal Participation ...................................................................................................................... 6

1.1.13 Kimberley Employment and Enterprise Program (KEEP) ................................................ 7

Policy and Strategic Framework.......................................................................................................... 7

Stakeholders and Consultation ........................................................................................................... 8

1.1.14 Native Title Claimants or Holders ................................................................................... 9

x

1.1.15 Third Parties Land Access Holders .................................................................................. 9

2 Planning and Implementation ............................................................................................. 10

Funding Strategy and budget ............................................................................................................ 10

Approvals .......................................................................................................................................... 11

Risk Analysis ...................................................................................................................................... 12

2.1.1 Land Tenure .................................................................................................................. 12

2.1.2 Isolation Costs ............................................................................................................... 13

2.1.3 Environmental Risks ...................................................................................................... 15

Supporting Documents/ Attachments .............................................................................................. 15

3 Declaration and Sign-off ..................................................................................................... 16

Table of Figures

Figure 1: Locality Plan ................................................................................................................ 3

Figure 2: Layout Plan .................................................................................................................. 3

Figure 3: Potential Layout .......................................................................................................... 4

List of Tables

Table 1: Project Timeframe and Key Milestones ....................................................................... 5

Table 3: Risk Analysis Summary ............................................................................................... 14

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1 Project Scope and Evaluation

Background

1.1.1 The Proponent

The Harris Family purchased Gogo Station in 1989 and formed the Gogo Station Partnership. Since

then, they have modernised the cattle operation through a process of selective cattle breeding,

grazing management and investment in marketing opportunities to secure quality customers in the

live trade industry, predominately in Indonesia. The farm management has included trials to improve

cattle production through the simple process of opportunity Feedlotting cattle as a conditioning

process to optimise cattle condition before being transported to markets. This has been assisted

through the production of forage sorghum and lucerne hay mixes.

The Harris family originates from the northwest NSW cotton and grain belt where they established

their original farming enterprises in the early 70’s. The family group has gradually extended their

operations to include winter cereals, cotton and cattle production.

The members of the Harris family that presently own Gogo Station have a farming base in New South

Wales and Queensland which extends from Mungindi in the north to Hay in the south and as far west

as Bourke. The enterprises operated by the family include broad scale dryland farming of mainly

winter cereals in addition to broad scale irrigated production of cotton, pulses and sorghum crops.

This is combined with cattle production through open grazing on native pastures and feedlots which

are able to finish cattle to specific market requirements.

At present, the two family members who operate Gogo Station, each farm approximately 60,000

hectares of dryland cropping and 10,000 hectares of furrow irrigation development in their respective

farming enterprises over several properties. The successes of both dryland and irrigated farming rely

upon skill and the adoption of innovative planning and production techniques. The requirement to

manage markets form a key factor in the development of these enterprises and has resulted in

utilisation of appropriately sized private grain storage and handling facilities to enhance market

opportunities. The development of the grain enterprises by the owners of Gogo Station has involved

sufficient management of the enterprise and development of markets to allow opportunities to supply

to a wide range of markets, including direct exports to Asian countries.

All developed areas presently operated by the Harris family have involved hands on management and

funding of the work. These successes and experience in the northwest NSW grain and cotton belt

sector will provide a significant depth of knowledge and expertise that the Harris family intend to

transfer and apply to the proposal for Gogo Station.

1.1.2 Agriculture on Gogo to Date

The property of Gogo Station includes extensive areas of open grassland growing on clay based alluvial

soils. These soils have been identified as arable soils with a high potential for agriculture, including

the Gogo and Fossil Downs clay based soil groups. These areas include active floodplain areas and

gently sloping open grassland areas. Cropping activity in the Fitzroy catchment commenced in the

1960’s on similar soil types that extend throughout the Kimberley region. These soils have been

cropped with varying successes to produce cattle fodder and grain such as sorghum.

In 2010, Gogo Station applied for and obtained a diversification permit to allow the cultivation of 400

hectares of mainly clay soils. Gogo Station has developed the area over the past four years. The

enterprise aimed to produce cattle fodder in the form of various qualities of hay in addition to trials

of various grains and pulses for stock consumption. This form of cropping was approved under the

permit issued for the site.

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The diversified cropping included irrigated and dryland production. Irrigation has been achieved

through spray and surface applications. Water for this irrigation is obtained from two sources, mainly

groundwater from the local limestone aquifer and surface water from summer storm events.

The most significant issue identified to date involves a successful germination period where the

seedlings are readily susceptible to many parameters including rainfall intensity and volume resulting

in both good and bad germination conditions as well as temperature variations. Additional parameters

common to all agricultural areas such as weed and insect pressure also apply.

Dryland production on Gogo Station aims at present to produce crops of forage sorghum hay from soil

moisture captured in mainly January and February. The development of the dryland areas has

involved various trials for ground preparation with the aim of determining the most suitable ground

preparation methods for the local clay soils. To date these methods have included:

• full cultivation to prepare a fine tilth followed by post-cultivation control of grass and weed

species using herbicide application for weed control prior to planting

• controlled herbicide application on natural grassland and cultivation of desiccated vegetation

into the soil prior to normal ground preparation using conventional disc cultivators

• controlled herbicide management of natural grasses and shrubs and direct sowing into the

uncultivated clay soils with post emergent weed control

The current operation has determined that more intensive cultivation provides the most efficient and

effective way to transfer natural grassland to a cropped area for the best result. The benefits of this

include tilth preparation to improve the capture and preservation of soil moisture in addition to

smoothing of the soil surface for more uniform planting depths and planting control.

The cost of diesel fuel for each ground preparation is considered a major factor in production costs

and therefore investigating alternatives to intensive cultivation remains a preference to improve the

viability of farming operations. Other factors that influence the cost of farming and successful seed

germination in addition to soil moisture management include: the development of optimum soil tilth

to achieve good infiltration of rain; conservation of soil moisture following the rain and; providing the

ideal conditions for seed germination whilst managing the body of native seeds that are present in the

soil in addition to potential weed growth which would compete for soil moisture. The issue of soil

erosion during the summer months remains a key management factor that will influence the selection

of new fields for agricultural purposes.

Project Description

1.1.3 Proposed Land

The development site, as depicted in Figure 1, is located in the northeast part of Gogo Station, close

to Margaret River. Figure 2 and Figure 3 illustrate the land to be developed as part of this proposal.

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Figure 1: Locality Plan

Figure 2: Layout Plan

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Figure 3: Potential Layout

1.1.4 Land to be Excised from Pastoral Lease

Currently the land highlighted in Figure 1, which comprises Gogo Station, is under a pastoral lease.

Figure 2 shows an enlarged view of the development site forming stage 1 of the proposal and Figure

3 presents a preliminary layout covering an area of approximately 8,986 hectares. The proposed

development would incorporate above ground water storages, furrow irrigation fields, centre pivot

development, internal channels and pipes to collect and move water and a surrounding buffer to

protect native vegetation. The Proponent is seeking to excise this land from the Gogo Station Pastoral

lease and request through the West Australian Government Departments to converted to land to a

fee simple tenure.

1.1.5 Indigenous Land Use Agreement

As a result of seven months of negotiation, a memorandum of understanding was signed by Gogo and

the Gooniyandi Aboriginal Corporation (GAC). This memorandum of understanding has committed

both parties to monthly meetings to develop a partnership model to account for compensation. These

meetings are on-going and ultimately will result in the creation of “many jobs and opportunities for

Gooniyandi people including employment and business opportunities”.1 The outcome of this

partnership will be the signing of an Indigenous Land Use Agreement.

1.1.6 Legal Access

The development is located to the north of the Great Northern Highway which traverses through Gogo

Station. Legal access to the development area needs to be created as part of the plan for the change

in Tenure.

1 Gooniyandi – Gogo Memorandum of Understanding Fact Sheet, Gooniyandi Aboriginal Corporation

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Figure 3 includes details of a proposed access easement through the Gogo Station Pastoral Lease. This

would need to be created when the survey of the land is undertaken. The creation of this easement

would need to involve consultation with Main Roads Western Australia to determine whether the

location is appropriate and finalise design requirements if an intersection is required.

1.1.7 Easements for Water Access

Easements for water access are still being determined. Figure 3 presents an alignment for a channel

easement between the irrigation development and potential offtake points from the Margaret River

and Mount Pierre Creek to capture flood water and direct this to the proposed storages.

Additional easements may be required access and utilise bores that are to be used for supply of water

to the centre pivot systems. The primary aquifer for the pivots is located to the south of the main

irrigation area. The water would be pumped to the pivots via a below ground pipeline.

Water easements are the subject of ongoing discussions with the Department of Water and subject

to ongoing aquifer investigations by the Department.

1.1.8 Granting Interests of Crown Land to Third Parties

No Crown interests will be granted to third parties as part of the development.

Project Timeframe and Output

The following table provides a potential Project development staging with the key activities outlined

Table 1: Project Timeframe and Key Milestones

Main Activities Milestone Responsibility

Obtaining approvals to proceed Allowing the initial dryland cultivation to

commence – 2016-2017

Proponent and

Government

Development and preparation of initial dryland

cultivation

Completed during the winter months allowing

sowing of crop in December/January -2017 Proponent

Harvest of first dryland production area April – May the following year Farm

Management Development of centre pivot systems for use of

available groundwater allocations Production of > 30,000 tonne of grain

Approvals in place for irrigation development Allowing development of irrigation storages and

offtake channels – storages to fill

Proponent and

Government

Development of stage 1 irrigation development –

5,000 Ha and storage system

Intensification of cropping program from

dryland to irrigated to increase production from

2 t/Ha to 4 t/Ha (minimum)

Farm

Management Harvest of dryland and irrigated production

Production of > 20,000 tonne of grain and other

crops

Development of stage 2 Dryland and irrigation

area – to including additional 5000 Ha of irrigated

land and storage systems

Production of > 50,000 tonne of grain and other

crops

The project outcomes will be dictated by funding available to invest in the cropping and development

program in addition to seasonal achievement of both development, agronomical issues and crop

production. It is envisaged that initial funding will consist of venture capital. Ongoing development

will be significantly funded by income generated from crop production and the ability to offset

development costs from the Proponents other enterprises. On this basis, no specific time frame has

been prepared by the Proponent other than a proposal to commence the development in 2016.

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1.1.9 Economic and Community Benefits

The community, both indigenous and non-indigenous, will benefit economically and socially as a result

of this project. As discussed in section 0, the Federal and State governments, as well as several public

and private organisations have produced numerous publications stressing the importance of

development in Northern Australia. These publications provide prescriptive characteristics that a

project must contain to enable it to provide meaningful economic and community benefits. As

discussed below, the proposed development has been designed in accordance with these publications

and as a result, represents a significant opportunity for the ‘top-end’ to realise some of the economic

and community benefits discussed throughout the publications.

1.1.10 Direct or Indirect Benefits to the Community, State or Commonwealth

There are numerous potential direct and indirect benefits which may be realised by the State or

Commonwealth as a result of this project. As discussed, the project has been designed in accordance

with numerous publications developed by state and private bodies. These publications were drafted

with the aim of enhancing the productivity of Northern Australia. Accordingly, many of the potential

benefits discussed within these publications can be realised through this project. A full discussion of

how the project adheres to the publications can be found in the discussion paper.

1.1.11 Productivity Benefits or Revenue Generating Capacity

The region will experience increased productivity and revenue generating capacity through the

demand on services by the project, especially 3PL’s (Third-Party Logistic Providers), and the training

of locally sourced staff. An expanded analysis of the potential productivity benefits and revenue

generating capacity can be found in the discussion paper.

1.1.12 Development Stages or Timelines

The Proponent is proposed three stages of development. These stages however, are subject to change

as a result on ongoing investigations into the feasibility of the project. Note the size of the water

retaining structures depicted in the stages are indicative only and are subject to change as a result of

ongoing investigations.

Stage 1:

• Development of dryland cultivation fields covering 8,986 Ha as part of ground preparation

works for the irrigation development

• Development of up to seven (7) centre-point irrigation fields covering 95 Ha each to utilise an

expected groundwater entitlement increase of approximately 3,500 ML per annum

• Construction of 40,000 to 50,000 ML irrigation storages covering 807 Ha to capture overbank

flows from the Margaret River, Mount Pierre Creek catchment and internal runoff from

cultivation fields.

• Construction of a 7,200 ML Irrigation storage to act as an internal balancing storage for

irrigation applications and to improve water storage efficiency.

• Construction of offtake channel to accommodate a capacity of up to 3,000 ML / Day

• Amendments to internal access routes to accommodate developments

• Development of furrow irrigation fields covering 3,771 Ha

• Amendments to internal access routes to accommodate developments

Aboriginal Participation

The project has the potential to provide significant employment opportunities and incentives for

Aboriginal participation in the enterprise as well as the larger agriculture industry. This potential has

Page | 7

been confirmed by the Gooniyandi Aboriginal Corporation (GAC) who, in their recent publication2

stated that the project and their partnership with Gogo will result in the creation of jobs and

opportunities for Gooniyandi people which would be realised through employment and business

opportunities. It is expected that the initial development involving an expected capital cost anticipated

to be in the order of $2,100,000 for land preparation will have a significant requirement for local input.

1.1.13 Kimberley Employment and Enterprise Program (KEEP)

The aim of the Kimberley Employment & Enterprise Program (KEEP) is to maximise employment and

economic development opportunities for local Aboriginal people (Aboriginal & Torres Strait Islander

People living in the Kimberley region) that arise through the Department of Housing’s procurement of

building and civil construction projects undertaken in the Kimberley.

While the project is not a building and civil construction project being procured by the Department of

Housing’s, the KEEP program exemplifies best practice in maximising employment and economic

development opportunities for local Aboriginal people. Accordingly, an alignment with KEEP’s

requirements will ensure the best possible outcome regarding employment and economic

development opportunities for local Aboriginal people.

The details of local engagement are still under discussion through the established Memorandum of

Understanding with the GAC. Through these discussions, an engagement agreement will be reached

which will be in accordance with the KEEP program and accordingly maximising employment and

economic development opportunities for local Aboriginal people.

Policy and Strategic Framework

The Federal and State Government, as well as several public and private organisations have produced

numerous publications stressing the importance of development in Northern Australia. Our unique

proximity to the rising Asian and Tropical regions is often stressed as significant opportunities for

which development should capitalise upon. Northern Australia however, remains under-utilised

relative to the rest of the country, despite its natural, geographic and strategic assets. The purpose of

documents such as the Green Paper on Developing Northern Australia is to promote development of

this region. The Gogo Station project achieves this purpose through developing economic resources,

opportunities and produce. Accordingly, the Gogo Station project is considered to be of high strategic

value and importance to Australia not only for the direct benefits gained through the development

but also for the invaluable knowledge generated through its innovation.

To illustrate the strategic importance of the project, consideration has been given to the following

policy and strategic frameworks:

• Green Paper on Developing Northern Australia (Federal Government)

• Royalties for Regions (WA Government)

• Western Australian Regional Development Trust

• Local Implementation Plan - Fitzroy Crossing produced by Regional Development Council

(RDCo) September 2010

• Regional Blue Prints produced by Western Australia’s Planning Commission (WAPC)

• Regional Development Policy Framework – An Action Agenda for Regional Development,

produced by Regional Development Council (RDCo) January 2011

• Kimberley Development Commission Strategic Plan 2013-2018, produced by Kimberley

Development Commission and The Government of Western Australia

2 Gooniyandi – Gogo Memorandum of Understanding Fact Sheet, Gooniyandi Aboriginal Corporation

Page | 8

• Regional Education, Skills and Jobs Plan, Western Australia – Kimberley 2012 – 2014, July 2013

produced by The Office of Regional Education, Skills and Jobs

The project has been determined to be congruent with the aims and intentions of these papers. A full

consideration of the aforementioned documents is included in the discussion paper.

Stakeholders and Consultation

Internal Stakeholders for the project are the Harris Family Enterprise who own Gogo Station and will

act as the project manager, financial controller as well as providing the knowledge and expertise to

ensure the project is successful. SMK Consultants at present have an association with the project in a

consulting role relating to submissions, design and environmental management to ensure the project

achieves sustainable goals through innovative design and environmentally sustainable outcomes. The

Harris Family Enterprise intends to provide the majority of the project management support from

existing internal resources.

Additional assistance will be sought from experienced regional services such as the Department of

Water and other Agricultural related expertise available in the region.

External stakeholders include entities which will be directly engaged by the project as well as entities

which will be affected by the project. Entities engaged by the project predominantly include

equipment and service providers while affected stakeholders include communities and government

organisations that may link with the project through service provisions, employment resource

opportunities and knowledge exchanges.

The Harris Family Enterprise will engage multiple equipment and service providers in the realisation

of the project. These will initially be located in the eastern Australian region but the aim is to develop

sufficient involvement from these stakeholders to establish local services developed as a result of

financial viability.

The township of Fitzroy Crossing and surrounds will have an opportunity to become involved with the

project. Many of the logistical requirements of the project will utilise Fitzroy Crossing for services and

support. Additionally, Gogo Station will be relying upon Fitzroy Crossing and the surrounding area to

fulfil its additional staffing requirements upon completion of the construction phase of the project.

There are many government institutions which have a vested interest in the development of Gogo

Station. On a larger scale these include the Federal and Western Australian governments but also

include:

• Federal Northern Development Taskforce

• Department of Regional Development

• Western Australian Regional Development Trust

• Regional Development Council (RDCo)

• WA Planning Commission

• Council of Australian Governments (COAG)

• Remote Service Delivery National Partnership (RSD NP)

• Local Operations Centre (LOC) (Located at Fitzroy Crossing)

• Kimberley Regional Operations Centre (ROC)

• Department of Indigenous Affairs’ (DIA)

• Commonwealth Department of Family, Housing, Community Services and Indigenous Affairs’

(FaHCSIA)

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1.1.14 Native Title Claimants or Holders

There are seven aboriginal communities currently living on Gogo Station comprising predominantly of

the Gooniyandi People. Within these seven communities, the largest of which are Yakanarra, Bayulu

and Gillaroong. The community on Gogo Station includes three schools. The schools are prominent in

providing local education in local languages in addition to providing a strong and relevant base for

local students. These schools provide the basis for potential development of local enterprises and

involvement with this project and any project that may take advantage of the model developed from

this project.

The Proponent is working with local Indigenous Groups in relation to any potential Native Title issues.

This work is progressing as a result of a long history of cooperation between the owners of Gogo

Station and the local communities. Recent discussions with the Marra Worra Worra Aboriginal Council

in Fitzroy Crossing have occurred in relation to the potential for employment and development of

general community support for the proposed agricultural development. A letter of support from this

Local Indigenous Corporation is attached in Annexure 1 of the discussion paper. Furthermore, as

discussed in section 0, a Memoriam of Understanding (MoU) has been signed with the Gooniyandi

Aboriginal Corporation (GAC) supporting the development.

Several similar discussions have been undertaken with the local Indigenous family groups who have

verbally offered their support for local agriculture. The vision for local support is that the local

Aboriginal Communities will have local opportunities to enter the workforce and remove themselves

from welfare programs. This would be a significant benefit to the community.

Commonwealth Native Title Act 1993

The Commonwealth Native Title Act 1993 presents some difficulties in interpretation if the land is to

be converted from Pastoral Lease to another form of Lease or Tenure. The WA Government suggests

a 2 to 3-year review and negotiation process if the proposed agricultural development is considered a

“Future Act”. Any delay of such time would be a significant imposition on the development proposal

and potential deterrent for the development to proceed. The deterrent would be in the form of

potential compensation monies that may require payment. Based on the history of such payments

offered by mainly the mining industry and Government, such payment would impose a significant

burden on agriculture and potentially stop this proposal from proceeding on the basis of alternative

locations that could support a similar agricultural investment without such payments.

Further development of the land tenure process by the West Australian Government has resulted in

the development of a conversion from Pastoral Lease to Freehold Tenure with the support of the local

Indigenous Landholders.

1.1.15 Third Parties Land Access Holders

There are no third party land access holders.

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2 Planning and Implementation

Funding Strategy and budget

Item of Expenditure Budget Establishment of tractors and equipment onsite, clearing and cultivation of 5,000 ha @ $420/ha

$2,100,000

Planting and harvesting of dryland sorghum crop – 5,000 ha @ $470/ha $2,350,000

Construction of grain storage bunker based on average yield of 2 tonnes/ha – 10,000 tonnes to be stored at cost of $25/tonne

$250,000

Transport of grain from paddock to storage shed @ $20/tonne $20,000

Transport from storage shed to Broome using road train triples @ $60/tonne $600,000

Shed storage at wharf and belt loader (400 tonnes/h) to load ships – 8,000 tonne storage shed (assuming use of existing shed)

$250,000

Survey of lease area $35,000

Development of 5,000 ha of irrigation

@ $3,711/ha $18,555,000

Construction of water storages and pumps systems for 50 gigalitres @ $250/megalitre

$12,500,000

Planting and harvest of 5,000 ha of irrigated sorghum @ $940/ha $4,700,000

Transport of grain to Gogo Station storages – 20,000 tonnes @ $20/tonne (based on average yield of 4 tonnes/ha)

$400,000

Transport of grain from Gogo Station to Broome @ $60/tonne $1,200,000

Transfer of grain from Broome storage to ship, including storage costs $400,000

Total $43,360,000

The Proponent has prepared a budget based on the proposal to firstly develop approximately 5,000

hectares of dryland cropping. Once water approvals are obtained, the Proponent intends to fund the

development of irrigation infrastructure from the dryland cropping production. Initially this would

consist of the development of centre pivot irrigators based on bore water which has a high reliability.

This would then provide a funding base for development of furrow irrigation fields which would rely

upon the capture of surface water on an opportune basis.

The overall plan relies upon production of up to 2 tonnes per hectare of mainly sorghum in the dryland

phase. The development of irrigation aims to increase this to a potential 6 to 8 tonne per hectare

resulting in a total yield in the order of 30,000 to 40,000 tonne to be shipped from Broome or a nearby

port facility.

Other options are to be included in process of intensifying production on Gogo Station. This may

include a 5,000 Head cattle Feedlot to improve the delivery of quality cattle to markets, outside of the

current mustering and delivery period.

Once the 5,000 hectares is operating successfully and works are completed, the longer term aim of

the Proponent is to include Stages 2 and 3. Each of these Stages will aim to develop an additional 5,000

hectares of cultivation. The aim of the development is to produce up to 100,000 tonne of grain or

equivalent in crop, for export from the Kimberley region.

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The investment in this development proposal is considered substantial and also presents a relatively

high level of risk to the applicant as the development of broad scale cropping programs in the

Kimberley is yet to be proven successful as a long term enterprise.

Two factors that are common to all farming operations that would need to be overcome include

weather and market prices. Seasonal conditions can be relied upon to vary considerably and therefore

it is expected to have good seasons and bad seasons within the first five years that could make or

break the operation. Market prices are variable; however, the budget proposed by the Proponent is

based on a moderate price for sorghum which will be the initial key crop to be grown under dryland

and irrigated production. Other crops may be available to respond to alternate markets.

The budget does not include capital expenditure on machinery such as tractors, cultivation equipment,

in-crop management equipment, harvesting equipment and transport equipment. These items have

been excluded from the initial budget on the basis that this capital will be provided from existing farm

operations in eastern Australia until the project reaches a point where the budget is proven and able

to support the purchase of specific machinery for Gogo Station operations and conditions.

The budget includes the majority of development expenses including land and infrastructure costs. It

is envisaged the minor maintenance costs would be incurred during this first stage for the developed

land other than standard machinery maintenance costs. After a period of approximately 5-years of

operating the irrigation equipment, it is expected that a more substantial budget would be included

in annual operations to maintain and improve the irrigation works. The budget would then be

supported in full from production.

The budget at present does not include costs relating to an application phase. This application phase

may involve a more detailed project investigation including project proposal, project impacts,

environmental impact assessment and establishment of preliminary project operational and

environmental parameters. The details of this application phase are presently unclear and therefore

not included as a component in the budget proposal. For budget purposes, it is expected that these

costs could extend between $20,000 to as much as $200,000 depending on requirements from various

government agencies and legislative processes.

The proposal at present would involve self-funding of the development on Gogo Station. No other

options have been identifiable to date. This self-funding would initially be limited to the development

of dryland cropping. The dryland cropping results would then determine the expansion of the project

into broad acre irrigated production.

The cost of development is to be funded from existing budgets on Gogo Station in addition to support

from the eastern Australian enterprises operated by the Harris Family Partnership involved in Gogo

Station. The eastern support would consist of staff, expertise, machinery, financial support and

agronomical support.

Once the first crops have been produced, the cash from these crops would be utilised for further

development of dryland farming operations.

A more detailed budget is presented in annexure 3 of the discussion paper. The budget presented in

the initial Discussion Paper extends to the full development of 15,000 hectares of cropping land and

the development of associated infrastructure including grain storage facilities and plant.

Approvals

The initial approvals would relate to clearing of the grassland to allow cultivation of the land. This

would require a “Native Vegetation Clearing Permit” to be issued by the Department of Environment

Page | 12

Regulation (DER). Permits were issued for development of 1,000 hectares of cultivation operated

under a Diversification Permit in 2013.

Additional approvals would be required under the Federal Government’s Environmental Protection

and Biodiversity Act (EPBC) as the property is located within The West Kimberley National Heritage

Region. This Region covers a substantial part of the Kimberley and surrounding region. The agricultural

development proposal would need to be the subject of an approvals process through the Federal

Minister for the Environment to enable clearing of land and development for agriculture.

When the proposal moves toward irrigation development, applications would need to be lodged for

various aspects of the proposal. These would relate to obtaining an appropriate water Licence for the

capture and use of Fitzroy catchment water in addition to the licensing of various works such as dams

and levee banks within the development area to capture local water.

The Western Australian Department of Agriculture and Food would also need to review the production

of various crops on Gogo Station in relation for approvals for new crops that are not registered in

Western Australia. Further research would need to be undertaken to determine whether specific

varieties of crops such as sorghum are approved for production in WA.

Land Title is a significant issue with the proposed development. At present, the conversion of the

Pastoral Lease for agricultural production is not permissible, however the WA Government is presently

working with landholders to allow an alternative Lease arrangement which will allow production of

crops that are not directly related to pastoral production.

Various issues also exist with the potential to utilise the developed land as an asset under the present

lease and legislative processes within the Land Administration Act 1997. Concerns have been raised

by potential lending institutions and landholders in relation to Section 79 of this Act, due to the

potential triggers that may be enacted is when the WA Government cancel the present Landholder’s

Lease. The process may trigger a requirement to assess the interest of alternative developers where

a lease is to be converted from a pastoral arrangement to a cropping enterprise. Under the worst case

scenario, the Proponent could develop the land for agricultural production and then compete in a

public bidding arrangement to purchase the land that had been developed. At present, the view of

Financial Institutions is that this potential would place any finance for the development as extremely

high risk. As indicated above, discussions are being undertaken with the WA Government to modify

this present legislative restriction. The preference of the Proponent is to develop the agriculture under

a Freehold title which would enable the land and the capital invested in the development to be utilised

as a form of security for funding. The potential resale path would be clear and unrestricted with a

freehold title.

Risk Analysis

2.1.1 Land Tenure

Establishment of a clear process for conversion of the pastoral lease land that is to be developed for

farming into freehold land is considered imperative to the financing of the project. As previously

discussed, the cost of financing the project where land tenure remains as a pastoral lease is considered

high risk by lending institutions and therefore the cost of financing the operation would include higher

fees and rates to compensate for this risk.

Stage 1 development phase for dryland farming are to be funded by the proponent on the basis of an

accepted high risk and higher cost of finance due to the current land tenure. However, the critical path

for further development and investment into irrigated agriculture involves significantly larger inputs

of capital which will need to be supported with freehold title.

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2.1.2 Isolation Costs

Additional risk factors that will be present at Gogo Station mainly involve the cost of development and

operation of the farming enterprise in a relatively isolated region with no established industry base.

The isolation factor would affect the supply of machinery, repairs, labour efficiencies and availability

of technological support for modern farming operations. Other issues associated with isolation include

agronomic factors such as crop and pest management, delivery of farm chemicals and management

of crop growth without a historical understanding of local soil, pest and weather related influences.

The initial budgets proposed by the applicant are based on current knowledge obtained through their

existing farming operations in eastern Australia as well as the trial area of fodder production on Gogo

Station. These budgets incorporate standard farming operations such as cultivation, transport, fuel,

seed costs and labour.

An isolation factor has been incorporated within the budget for components that will need to be

established at Gogo Station such as tractors, farming machinery and trucks. Such equipment is not

available in the greater Fitzroy Crossing region and therefore all items will need to be transported and

established onsite. The trucking of grain from field to silo and silo to wharf involves a significant cost

component within the budget. It is anticipated that some local services will be available once demand

is generated, however the initial transport operations will generally be undertaken using the

Proponents existing transport fleet which will be partially mobilized to the property from eastern

Australia.

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Table 2: Risk Analysis Summary

Risk Level Mitigation

Land Tenure High Proceed with project on the basis of higher capital risk strategies if land

tenure options cannot offset debt funding options.

Approvals High

Undertake project with restrictions and conditions that would create

additional management constraints and requirements for limitations of

production and landuse capabilities. Environmental management measures

would need to be considered as part of the development proposal in order to

meet community and legislative objectives and perceptions. Such measures

would be easily adopted from existing Best Management Practices which form

a key component in existing agricultural operations undertaken by the

Proponent.

Climate Moderate

A condition that affects production variability in relation to current extended

periods of dry conditions and potential for extreme weather variability of

intense events. The potential for weather impacts on the proposed

development must be established as a factor within budgets with options to

delay development phases if seasonal influences cause the loss of a growing

season.

Socio-economic

environment Moderate

The cooperation and involvement of local communities to support and

participate in the development and operation of an agricultural enterprise in

the Kimberley region would significantly advance the potential success of the

operation and therefore continued involvement of the local community and

participation in the proposal would be essential measure of determining the

success of the proposed development.

Long term

production and

extension of an

agricultural

industry with the

Fitzroy Basin

Low

The establishment of a strong agricultural enterprise on Gogo Station

involving production, storage and marketing of various grains would attract

additional investment in the region for similar enterprises. Awareness of the

potential of additional enterprises should be accepted as a benefit through

the potential for cooperative agreement with larger production and sharing of

common infrastructure such as transport and shipping arrangements.

Participation of other similar enterprises should be dealt with as a benefit in

marketing success through increased market and delivery options, rather than

competitors. The risk is therefore considered as low as it would be beneficial

to the proposal.

Long term

management of

irrigation

infrastructure

Moderate

The initial development of irrigation infrastructure on the property would

require specialist machinery and skilled operators. The business plan should

include ongoing roles for such machinery and specialist until the machinery

has sufficient scale of operations to remain onsite and attract skilled staff or

contractors to remain available for ongoing works in preference to seasonal

high cost establishment costs for such operations.

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2.1.3 Environmental Risks

The environmental risks are discussed in detail in the “Water Resource Plan” and are summarised

below:

Impacts of Extraction

The proposed development includes extracting a maximum of 3,000ML per day out of the Margaret

River during flood flows where the river rises above normal flow levels by three (3) metres or more.

On River Flow

Taking 3,000 ML/day out of Margaret River during flows of three or above meters would result in an

average total take of 48,449 ML per annum. As Margaret River discharges of average of 2,005,269 ML

annually into the Fitzroy River, this take represents an average loss of 2.4% annually for the Margaret

river and a significantly less percentage of the total flow for the Fitzroy River. This is not considered

significant enough to have a notable detrimental effect on the river flow.

On Other Users

The extraction of river water for irrigation would have minimal impact on other users along Margaret

River. Gogo Station is the last property before the Margaret River joins the Fitzroy River.

Local Streams

Subject to further consultation with the Department of Water, some local runoff from Gogo Station

maybe captured during local runoff events. Preliminary assessment of any local water capture would

involve allowing a minimum base flow to occur prior to triggering conditions allowing for the

opportune capture of stream flows from the local creek and gully systems.

On Local Environment

To date there exists little research regarding environmental water requirements for the Fitzroy and

Margaret Rivers. The proposal represents a take of 2.4% and 0.69% from the Margaret and Fitzroy

Rivers respectively. This is not considered significant and notable environmental impacts are not

expected.

On Overall Sub-Catchment Water Availability

Fitzroy River discharges 7,057,265ML annually. The proposed take would represent a loss of 0.69%

on river flows downstream from the Fitzroy / Margaret River Junction which is not considered

significant and accordingly, no detrimental effects on the overall sub-catchment water availability is

expected.

Supporting Documents/ Attachments

See “Water Resource Plan”.

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3 Declaration and Sign-off By signing and submitting this business plan, the signatories have understood and agreed that:

1. This business proposal template is provided as a guide only and does not in any way guarantee

that the request to lease or acquire land will be granted

2. DoL may ask for any information that would assist in assessing the business proposal

3. It is your responsibility to seek and obtain necessary approvals, licenses, insurance certificates

and permits

4. DoL is not responsible for approving any of the supplied information, and it is up to you to

ensure that all necessary approvals have been obtained and are satisfactory

5. DoL reserves the right to decline any request to lease or acquire land

I confirm that the information contained in this Business Proposal is true and correct.

Signed Signed

Name Peter Taylor Name Hayley Greenham

Position Director Position Environmental Consultant

Date 29th February 2016 Date 29th February 2016