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Scenario planning for irrigation futures of the Goulburn Broken Region

QJ Wang1, Leon Soste1, David Robertson1, Selina Handley2 and Robert Chaffe2

1Primary Industries Research Victoria, Department of Primary Industries, Tatura Centre, Victoria, Email qj.wang@dpi.vic.gov.au
2
Community Engagement Network, Department of Sustainability and Environment, Victoria

Abstract

The irrigation industry, community and catchment in the Goulburn Broken region have undergone tremendous changes and will continue to change in the future. What strategies should the region adopt to position itself for irrigation in the future? Through an extensive participatory program run by the Goulburn Broken Irrigation Futures Project, the community and key stakeholders of the region have expressed their values and aspirations, explored plausible futures, examined the region’s strengths and weaknesses, and developed a suite of regional strategies.

In this paper, we present an overview of the scenario planning approach used for strategic planning of irrigation futures of the Goulburn Broken region. We describe how the approach has been used to work with the community and other stakeholders to deal with complex issues and future uncertainty. We also present a summary of the strategic planning outputs. The outputs include a set of aspirations for the future of irrigated agriculture in the region, four external scenarios describing the evolution of alternative plausible contextual environments within which the region may have to operate, and a suite of regional strategies to guide future regional actions.

Three key learnings: (1) Scenario planning provides a practical systems framework for regional players and other stakeholders to explore highly complex and uncertain issues. It creates the atmosphere for generating new ideas and the tool for synthesising wide ranging ideas. (2) The commitment demonstrated by a large number of participants to the strategic planning process is an indication of the success of the scenario planning approach so far. (3) The future is uncertain and the region must have the underlying adaptive capabilities to embrace opportunities and challenges when they arise. These adaptive capabilities need to be embedded in our social systems, land, water and environment systems, and industry systems.

Key Words

Scenario planning, regional planning, strategic planning, community participation, stakeholder engagement, irrigation futures

Introduction

The Goulburn Broken Catchment is located in northern Victoria, Australia. It is known as the food bowl of Australia. It covers 2.4 million hectares and has a population of around 200,000 people. Approximately 280 thousand hectares of agricultural land is irrigated. Irrigated agriculture is a major business engine in the Goulburn Broken region. Investment in on-farm and processing infrastructure is about A$100 million per annum. The regional farm-gate gross value of production from irrigated agriculture in 2000 was A$1.35 billion. Production from the irrigation region supports a significant food processing industry that contributes 25% of Victorian’s export earnings.

The industry faces significant challenges and opportunities. Issues such as free trade agreements, climate change, water reform, and technological developments will have a significant influence on the future. As one of the oldest gravity irrigation systems in Australia, Goulburn-Murray Water’s irrigation system needs substantial renewal of its ageing infrastructure in the next 20 years. Therefore, it is critical that the region develops a sound plan to strategically position itself for irrigation in the future.

The Goulburn Broken Irrigation Futures project has been established to assist the regional community to plan for the future. It is a regional initiative, funded by the Goulburn Broken Catchment Management Authority, Goulburn-Murray Water, Victorian Department of Primary Industries, Victorian Department of Sustainability and Environment, and Land and Water Australia.

Regional planning is highly challenging. It needs to deal with complex issues, significant uncertainty, and multiple stakeholders. The project has adopted a scenario planning approach. Although scenario planning has been used by private corporations and public organisations since 1970’s, there are few examples of its application for regional planning.

In this paper, we present the scenario planning approach adopted and further developed for regional planning. We also present a summary of findings from our work on strategic planning for irrigation futures of the Goulburn Broken region.

Approach

Strategic planning in a regional context

A region needs to fit well with its operating environment if its aspirations are to be achieved. A region consists of many players - organisations, groups and individuals. Good regional planning aims to develop strategies that will usefully guide the behaviour of the players in the region to achieve a good fit.

Van der Heijden (1996) identified five elements required for developing good strategies for an organisation. We have adapted these for developing strategies in a regional context:

  • Acknowledgment of community values and aspirations.
  • Assessment of the region’s characteristics, including its capability to change.
  • Assessment of the operating environment, current and future.
  • Assessment of how well they fit together.
  • Development of strategies and, following from this, decisions and actions to improve the fit.

Two categories of the operating environment are useful to distinguish (Emery and Trist, 1965):

  • The contextual environment is that part of the operating environment which has important repercussions for the region but is largely outside the region’s power to influence. Actors in the contextual environment are known as “context setters” or “referees”.
  • The transactional environment is that part of the operating environment in which the region is a significant player, influencing the outcomes as much as being influenced by other players.

In strategic planning, the characteristics of the region are judged against the contextual environment, in interaction with players in the transactional environment (Figure 1). The interactions between the many players within the region are important parts of the region’s characteristics. Therefore, attention needs to be given to both types of interactions - interactions between regional players and outside players, and interactions between players within the region (Figure 1).

Scenario planning

Scenario planning is a relatively new approach to strategic planning of natural resources management. It was originally developed and applied famously by the Royal Dutch Shell Company to anticipate and plan successfully for the oil shocks of the 1970’s (O’Brien, 2000; van der Heijden, 1996). Scenario planning explicitly acknowledges ambiguity and uncertainty in the strategic question, by creating a set of scenarios which are plausible, coherent pictures of alternative futures. These scenarios become a powerful tool for testing the robustness of strategies, as well as for generating new strategic options. Scenario planning also provides a useful means for organisational learning.

Scenario planning has become widely used by private corporations and public organisations (O’Brien, 2000). However, there are few examples of its application for regional planning. Regional planning tends to be highly complex because of the large number of players and issues involved. In addition, unlike a corporation or organisation, a region involves many entities but usually without a management group responsible for all the entities.

Figure 1: The region in its operating environment

Stakeholder participation

We consider stakeholder participation critical to the success of regional planning. It broadens the “scientific” view of systems, utilises local knowledge, considers stakeholder values, and increases the ownership of planning outputs (Chapman, 2002). An additional benefit is capacity building. Our strategic planning for the Goulburn Broken irrigation futures has revolved around stakeholder participation at all stages.

Project stages

This four year project has four stages:

  • Stage 1: Project development
  • Stage 2: Exploration of vision, scenarios and strategies
  • Stage 3: Further development and assessment of strategies
  • Stage 4: Consensus building

At Stage 2, a series of four Irrigation Futures Forum workshops were held at six major centres throughout the region. The participants recalled the major events and changes that had occurred in the last 30 years, and identified some of the external and internal drivers for these changes. They considered current strengths and weaknesses of the region. They also described what the region would look like in 30 years if it were “thriving”.

The participants then constructed a total of 26 “external scenarios”. These are stories of plausible contextual environments in the next 30 years. In response to these external scenarios, participants generated many ideas on regional options for the future.

The large amount of material from the Forums was consolidated and synthesised through the project Stakeholder Reference Committee. The final outputs from Stage 2 were a set of aspirations for the future of irrigated agriculture in the region, four external scenarios, a list of regional strengths and weaknesses, and a suite of regional strategies to guide future regional actions.

Stage 3 of the project has recently commenced. The focus of Stage 3 is to further develop and assess regional strategies and future action options. This is being done through constructing “response scenarios”. These are stories of regional players’ responses to the four external scenarios, in interaction with outside players in the transactional environments.

A stakeholder Technical Working Group was formed to work with the project team to complete this task. The Group has two teams, Intuitive Team and Analytical Team, working in sequence to construct the response scenarios.

Drawing from these response scenarios, strategic positioning analysis will be conducted to understand (adapted from van der Heijden, 1996):

  • The societal/customer value that the region creates.
  • The nature of the competitive advantage exploited by the region.
  • The region’s distinctive competencies which, in their mutually reinforcing interaction, create competitive advantage.
  • The threats to the region causing its distinctive competencies to depreciate.
  • New business opportunities and capability options to maintain and increase the region’s competitive advantage.

The region’s distinctive competencies at a given time may depreciate over time due to:

  • Changes in the contextual environment (eg. customer values, free trade, climate change).
  • Re-positioning of players outside the region in the transactional environment (eg. international and national competitors, government water policy and resource allocation).
  • Changes in internal affairs (eg. land and water uses, salinity, irrigation infrastructure).

Through the strategic positioning analysis, we will identify how the regional players may position themselves and how they may create regional synergies to give them and the region the edge over competitors.

At Stage 4 of the project, we will work with some of the key regional players and other stakeholders to incorporate project outputs into their strategic plans. This is in recognition that, despite the large number of people involved in the project and the active communication program throughout the project period, different players have different processes and needs. The project seeks to understand these processes and needs, and to find effective ways for decision makers to own and use the project outputs.

Findings

This section provides only a very brief summary of findings from Stage 2 of the project. A more comprehensive report can be found in Project Milestone Reports 2 and 3 (DPI, 2004, 2005). Stage 3 will be completed by June 2006.

Stakeholder participation

We have had excellent stakeholder involvement, with over 120 people participating in the Irrigation Futures Forum workshops at Stage 2. Each person contributed up to six days. Retention rates at the six workshop locations ranged from 70% to 90% over a period of six months. Participants came from a wide range of sectors including primary producers, processors, environmental groups, Landcare groups, business and investment services, regional land and water management agencies, local and state governments. As an indication for the level of interest by participants, over 30 people nominated themselves as candidates for the Technical Working Group for Stage 3.

While the ideas generated from the Irrigation Futures Forums were wide ranging, the majority of these ideas were incorporated neatly into the synthesised outputs from Stage 2. These outputs were checked with the Forum participants and endorsed by the Stakeholder Reference Committee.

Aspirations

There was strong convergence in stakeholder aspirations. In summary, they aspired to having a balanced social, economic and environment outcome, and to having active community participation in future decision making processes.

External scenarios

Four external scenarios were synthesised to represent a range of plausible contextual environments in the next 30 years. These are not predictions of the future. They are intended to reflect the uncertain nature of the future, describing plausible evolutions of alternative contextual environments including societal, economic, political, technological, and ecological developments. The four scenarios are:

Moving on. The cost-price squeeze continues to pressure farms to increase sizes and invest in technology. The number of lifestyle properties continue to grow. There is an expectation from consumers of “clean-green” food but not widespread willingness to pay more for it. Climate change starts to produce noticeable warmer and drier winters and hotter and wetter summers, with a reduction in chills hours. Fire blight is discovered in a number of horticultural areas throughout Australia. This leads to the introduction of genetically modified (GM) varieties resistant to fire blight. Other GM plants are also allowed soon after. Water delivery systems are privatised with significant investment in infrastructure and services. The phasing-in of the free trade agreements with the US and ASEAN results in both export opportunities and strong competitions. There is an increased demand for high quality “bush” niche products.

New frontiers. Communication technological developments, demographic and attitudinal changes lead to a new wave of exodus of urban population to live and work in rural areas. There is greater demand for amenity including improved environmental flows and water quality. Agricultural production in Australia declines due to a combination of increased regulation on agricultural practices, free trade agreements, climate changes and diseases. Government purchases land no longer used for agricultural production and uses it for recreational, aesthetic and environmental purposes. An international conflict over oil causes a period of technological innovations. Synthetic food products become the primary source of food, leaving a small niche of authentic food production. Low energy, solar-powered desalination systems enable Adelaide to cease drawing water from the Murray River.

Pendulum. Strong community concern for the environment leads to the Greens holding the balance of power in the Senate. A commitment of 3500GL to the Murray over 10 years is made. In Victoria, medium reliability water is purchased by the government for environmental flows, and high reliability water entitlement is reduced. There is a dramatic decline in rural areas. The environmental outcomes from increased river flows have not matched expectations. Reduced availability of water and multinational monopolies of the food industry force increases in food price. In 2020, the newly elected National Party government brings an about-turn in policy. The Murray Darling Basin cap on diversions is increased. An auction of the reallocated water realises funds to rebuild irrigation infrastructure throughout the Basin. In addition, major flooding events return, and climate change is acknowledged as a natural process that operates on long cycles. Internationally, the strengthening of Chinese yuan increases the demand for agricultural products from Australia.

Drying up. The war on terror expands, causing a major world recession. Australia is unable to export its products during this period despite good crops, resulting in the loss of major export markets. China emerges from the recession to become a significant exporter of high value horticultural products, taking advantage of its low labour cost. At the same time, China relies on importing bulk agricultural commodities to provide food for its large population. As Australia recovers from recession and adapts to the new world market, it is hit by a severe drought lasting for eight years. The government provides some special assistance to regional communities to ease the widespread hardship. On the other hand, the scheduled review of water allocation under the 2004 White Paper commences, and water allocation for irrigation is further reduced, because of the perceived climate change. Internationally, there is a strongly growing demand from affluent consumers for “natural” food. Australia is one of the few countries in the world which still largely remain GM-free.

Regional strategies

A total of 29 strategic actions were recommended at the end of Stage 2 of the project. These strategies are grouped under:

  • Building social capability.
  • Building land, water and environmental capability.
  • Building agricultural industry capability.

The strategies are about creating the right conditions for enterpreneurship and innovation to flourish, and at the same time protecting and enhancing environmental and community wellbeing. For example, the strategies recommend:

  • Review current mechanisms for knowledge generation, accumulation, exchange and use, and examine ways for improvement.
  • Develop a sound plan for water pricing and associated services to ensure the viability of irrigation delivery services and ability of irrigation enterprises to adapt to changes, and to balance short term and long term needs.
  • Investigate options for structural change in agricultural businesses, for example, corporate dairy farms jointly owned by several families.

The strategies are also about building the region’s adaptive capabilities to continually monitor, learn, innovate and make adaptive changes to manage future uncertainties, so that the region will embrace opportunities and challenges when they arise. For example, the strategies recommend:

  • Continually rejuvenate memberships and processes of community groups and community involvement in organisations.
  • Value the ability of irrigation infrastructure to adapt to future changes in land and water uses, and adopt flexible technologies and management processes where appropriate.

• Value and support diversity in agricultural enterprises, farming systems and products in the region.

The strategies emphasise the importance of active participation of the community in decision making to effectively utilise local knowledge and take into account a diversity of views, so that decisions will be robust and owned by the community. They also recommend effective communication and alignment among organisations, community leaders and the community.

Conclusion

Regional planning is highly challenging as it needs to deal with a multitude of players and complex issues. We have adopted and further developed a scenario planning approach for strategic planning in a regional context.

With the approach, strategies are developed by examining the fit between a region’s characteristics and its current and future operating environment. Strategic positioning of the players in the region, in relation to players outside the region is analysed against the contextual environment. The threats to the region causing its distinctive competencies to depreciate are identified, and new business opportunities and capability options to maintain and increase the region’s competitive advantage are explored. Interactions between players within the region are examined to identify ways to create regional synergies.

Scenario planning explicitly acknowledges ambiguity and uncertainty in the strategic question, by creating a set of scenarios which are plausible, coherent pictures of alternative futures. These scenarios are not predictions. Rather, they represent a plausible range of possible futures. These scenarios become a powerful tool for testing the robustness of strategies, as well as for generating new strategic options.

Another of the key features of our scenario planning approach is stakeholder participation. For regional planning to be effective, active participation of the stakeholders is critical. Stakeholder participation broadens the “scientific” view of systems, utilises local knowledge, considers stakeholder values, and increases ownership of planning outputs.

Acknowledgements

We are most grateful to a large number of people who have contributed to the project in so many ways. In particular, we would like to thank other members of the project team, Irrigation Futures Forum participants, Technical Working Group members, Stakeholder Reference Committee members, Project Governance Committee members, Project Reviewers, and many other project champions, for their significant contribution to the project.

We acknowledge the funding of the project by the Goulburn Broken Catchment Management Authority, Goulburn-Murray Water, Victorian Department of Primary Industries, Victorian Department of Sustainability and Environment, and Land and Water Australia’s National Program for Sustainable Irrigation.

References

Chapman, L. (2002) The link between participation, capable communities and environmental gain: a discussion paper prepared for the Goulburn Broken Catchment Management Authority, RuralPlan.

DPI (Department of Primary Industries, Victoria), (2004) Irrigation futures of the Goulburn Broken Catchment: Milestone Report 2, prepared for Land and Water Australia, DPI, Tatura.

DPI (Department of Primary Industries, Victoria), (2005) Irrigation futures of the Goulburn Broken Catchment: Milestone Report 3, prepared for Land and Water Australia, DPI, Tatura.

Emery, F.E. and Trist, E.L. (1965) The causal texture of organisational environments, Human Relations, Vol 18, 21-32.

O’Brien, P. (2000) Scenario planning: a strategic tool, Bureau of Rural Sciences, Canberra.

Van de Heijden, K. (1996) Scenarios: the art of strategic conversation, John Willey and Sons, West Sussex.

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