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New analysis exposes the cotton industry’s plans to squeeze the Territory dry

31 Oct 2024

According to new analysis based on cotton industry figures, dryland cotton will never be profitable in the Northern Territory, laying waste to the cotton industry’s claims that they won’t damage Territory Rivers.

Analysis prepared by industry experts Slattery & Johnson found that the only way that cotton will be profitable in the Territory is through irrigation which will permanently damage the Territory’s free-flowing rivers and savannas.

“Advocates of a cotton industry in the Northern Territory claim it will be profitable, generate jobs and economic benefits, and that its primary motivation is to grow cotton seed for cattle feed. None of these claims are plausible,” the analysis found.

“The industry asserts that most of the cotton grown in the NT will be dryland. However, the industry’s own financial analysis shows that, even with optimistic yield assessments, dryland cotton is not profitable and will return a significant annual loss across the industry.”

“This research confirms what Territorians have always known. Big Cotton’s plans in the Territory rely on taking billions of litres of free water and dams on our free-flowing rivers,” said Kirsty Howey, Executive Director of Environment Centre NT.

“We’ve seen the damage this industry has done to the Murray-Darling and Territorians don’t want to see the same mistakes repeated in the Top End.”

“Free flowing rivers are what make the unique Territory way of life possible. Letting the cotton industry into the Territory will put our fishing, boating and tourism industries at risk.”

The analysis also found that the industry requires significant financial assistance from governments to be financially viable. The Australian and Northern Territory governments are subsidising the industry by an estimated $42 million per year without due diligence on questionable industry claims.

“The cotton industry has come to the Territory trying to claim subsidised land, free water and huge subsidies from the public in order to make their industry viable and turn a profit. This is nothing more than a huge transfer of public wealth into the hands of big business,” said Ms Howey.

A full copy of the report can be downloaded here

Key findings:

  • The Australian and Northern Territory governments are subsidising the industry by $42 million per year, as it is not financially viable with private investment alone.
  • Industry dryland cotton in Northern Australia makes an estimated loss of $812 per hectare. To achieve industry forecast gross revenue and make a profit, the amount of irrigated cotton will need to be double the area currently claimed.
  • There is no basis to industry claims that the primary motivation for cotton being grown in the NT is to produce cotton seed for cattle.

Notes for editors:

  • This analysis was produced using industry data on operating costs and profit margins sourced from Cotton Info, the Cotton Research and Development Corporation, and Boyce Chartered Accountants. 
  • Slattery & Johnson are a water consulting firm that conducts independent research and policy analysis. Directors Maryanne Slattery and Bill Johnson are former senior employees of the Murray-Darling Basin Authority. 
  • This analysis also examined the claims by the cotton industry about the number of jobs created. It found serious flaws in the figures, including a report from Cotton Australia and Deloitte Access Economics where no method is provided and no sources are cited. Another report by PricewaterhouseCoopers reported salaries more than 50% higher than the current industry average. 
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