Development of Regional Production Areas in a Changing Climate: A ...

Appl. Spatial Analysis DOI 10.1007/s12061-015-9152-4

Development of Regional Production Areas in a Changing Climate: A Case Study of Gippsland, Australia Victor A. Sposito 1,2 & Harmen Romeijn 3 & Robert Faggian 1,2

Received: 21 July 2014 / Accepted: 22 March 2015 # Springer Science+Business Media Dordrecht 2015

Abstract Increased global demand for agricultural production is being driven, in particular, by the rising middle class in the Asia-Pacific geo-region. The significant role of natural resource-based industries, especially agriculture, in the development of non-metropolitan regions is again being recognised. In this context, this article describes a spatial analysis approach to agricultural development based on the development of Production Areas (PAs) in regional/rural economies. PAs are spatial units within regions selected for the intensive sustainable development of agriculture (including forestry, agro-forestry and bio-energy), their associated activities and underpinning infrastructure. A case study in a resource-based region in Australia—Gippsland – explains the approach. This is informed by the eco-economy model of endogenous regional/rural development, which addresses the links between novel co-production and consumption networks. The methodology for the identification and analysis of PAs has, at its core, Land Suitability Analyses of those agricultural commodities currently cultivated in the region and those that could be grown in future climates. The use of GIS enables us to overlay and analyse several constraints (e.g. flood erosion and salinity risk) and resources (e.g. water and transport) to define PAs and the available land within each of them. The approach is further illustrated by focusing in one PA— Macalister, an irrigated dairy production area where recent dry climatic conditions caused a substantial decline in water resources. Key elements for the sustainable development of this PA are outlined including construction of Blue-Green

* Robert Faggian [email protected] 1

Centre for Regional and Rural Futures, Deakin University, 221 Burwood Hwy, Burwood, Victoria, Australia 3125

2

School of Life and Environmental Sciences, Deakin University, 221 Burwood Hwy, Burwood, Victoria, Australia 3125

3

School of Engineering, University of Melbourne, Victoria, Australia 3010

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Infrastructure. Comments on the approach and the need for strategic long-term planning concludes the article. Keywords Climate change . Spatial (territorial) planning . Eco-ecological model . Multifunctional agriculture . Production areas . Land suitability analysis

Background Introduction Different approaches (that is, theories and models) to development have been proposed and followed in practice, principally since around 1940. The different approaches reflect changing paradigms of development, and ideas about development have long been controversial and contested (Hettne 1995; Potter et al. 2011). To a large extent, the variety of approaches that have been applied in practice at the regional level are extensions of development thinking and theories/models at the national level. This is, for instance, the case with the general economic model of the American economist Hirschman (1958), the ‘cumulative causation’ approach of the Swedish economist Myrdal (1957), and the growth pole concept of the French economist Perroux (1964). Partly inspired by the pioneering work of Friedmann (1973) in Latin-America, and Bagnasco (1977), Brusco (1982) and Piore and Sabel (1984) especially in the ‘Third Italy’, more attention is now being given to the local milieu, institutions (and organisations) and socio-cultural aspects as possible determinants of regional development (see also: Schenk and Haggis 2000, and Moulaert and Sekia 2003). Nevertheless, the emphasis on regional development and economic-geographical studies continues to be on metropolitan centres as the most important loci of the economy (Mackinnon and Cumbers 2011; Coe et al. 2013). Large urban centres are, of course, critical in any economic development process, and we have no intention of arguing otherwise in this article. In the past few years, increased global demand for agricultural production is being driven, in particular, by the rising middle class in the Asia-Pacific geo-region. The significant role of natural resource-based industries, especially agriculture, in the development of non-metropolitan regions is again being recognised (Marsden 2003; Brouwer 2004; European Commission 2005; OECD 2006; Jingzhong et al. 2010). In this context, this article specifically focuses on a spatial analysis approach to agricultural development in regional/rural economies based on the development of Production Areas. It uses a rural region in the State of Victoria, Australia— Gippsland—as a case study to explain the approach. The Australian Context Australia is currently confronted by several economic challenges, particularly the need to supplement the national and regional incomes and employment being created by the mining sector. Increasing demand for higher value food from Asian rising middle class is becoming a major driver of economic growth alongside longer term opportunities in services and high-value manufacturing activities. There are already about 500 million people in Asia who might be regarded as middle class. By 2020 that is expected to rise

Development of Regional Production Areas in a Changing Climate

to 1.7 billion and by 2030 to about 3.2 billion. It is estimated that, by the latter year, just under two-thirds of the spending by the world’s middle class will come from the AsiaPacific geo-region, compared with about a quarter today. The White Paper on Australia in the Asian Century states that the Asian geo-region will demand more agricultural products, a broad range of agricultural services and more sophisticated consumer goods. It also mentions that Australia’s agriculture and food sector is well placed to build on its strengths including the proximity to markets in Asia, complementary in production systems, a sound biosecurity system, a record of innovation and reputation for producing high quality and safe food products, and a skilled workforce (Australian Government, Chapter 4, Section 4.3 and Case Study 2012). The openness of Australian economic system, deregulation of government economic controls, the fast moving global marketplace built on ‘disruptive innovations’, 1 and changing demographics and sources of employment mean that it is ever more difficult for the blunt instruments of the national government to be successful across the broad spectrum of the country’s economic system. This highlights the fundamental role that regions must play in the development of Australia (Regional Australia Institute 2013). To a large extent, the successful future well-being of Australian regions will depend on the successful development of agriculture, including forestry (see also below). Challenges to Regions and their Agricultural Industries In this article, ‘region’ is used in the sense of sub-national regions, i.e. regions within countries; rather than supra-national or geo-regions, i.e. regions that encompass several nations, for instance the Asia-Pacific geo-region. Furthermore, we are particularly concerned with (non-metropolitan) regions where the main economic activities are based on the utilisation of natural resources. This type of regions is confronted with major challenges brought about by numerous natural and human-mediated drivers of change (or driving forces). Multiple transformations are taking place at various scales and levels. They include the effects of globalisation and rapid technological changes; accelerating urban expansion encroaching in the country side; increased demand for their environmental (biodiversity and natural) resources such as natural vegetation (e.g. Ecological Vegetation Classes—EVCs), forestry and agro-forestry, soils, water and atmosphere; demographic changes such as population declines in rural areas which in turn are associated with decreases in essential social services (e.g. schools and hospitals); and structural adjustments and concomitant reductions in the sources of employment. Macro-economically, regional/rural economies seem to be caught in a continuous squeeze process between the prices and costs associated with land-based production 1 According to Schumpeter (1934, 1950), development is caused by a bundle of interlocking innovations (primarily technological but also of other types such as organisational) spread over a wide range and sufficient to bring about qualitative changes in industries (and society) through the replacement of ‘old combinations of production’ and firms by new ones. His concept of ‘creative destruction’ (as explained in the 1950 book) refers to the opportunities for novelty (innovation) which emerge from the phasing out of the ‘old’ technologies (or products). New firms entering the industry are likely to choose the disruptive technology, and incumbent firms have the difficult choice of trying to extend the life of their current technology, or investing in switching to the new technology. See also Perroux (1964), and Schilling and Esmundo (2009). Innovations necessitates individuals, leaders or organisations that will secure and combine the necessary resources (including relevant information) and assume the risks of failure; every innovation thus requires an innovative agent, as explained by Friedman (1973, Chapter 3). This term is roughly analogous to Schumpeter’s image of the ‘entrepreneur’.

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and the growing market and consumer expectations of high quality resource-based goods and services (Brouwer 2004; Wilson 2007; Kitchen and Marsden 2009). This simple enumeration of driving forces and some of their impacts indicate that there are already significant existing challenges to the capacity of agricultural systems to meet food security demands in terms of production, yields and their variability. In the particular case of Victoria, a long-term downward trend in the terms of trade for agriculturalists reflects also the general situation, mentioned above, in which the price of inputs used to produce agricultural commodities has risen faster than the price received for those goods. Caught in this problematic situation, farmers have, and will need to continue, to improve their competitiveness to stay viable. In addition, they have to manage changes in resource availability and climatic conditions and policy, and must adjust their enterprises and/or made use of technological innovations to stay profitable (Larsen et al. 2008; Department of Environment and Primary Industries 2013). International analyses, complemented by similar studies in Australia, indicate that climate change will have a major impact on Australian agriculture (Stokes and Howden 2010, IPCC 2014; Christoff 2013). Changes in temperature and precipitation in conjunction with the effects of climate extreme events—temperature extremes (e.g. heat waves), increased precipitation’s frequency and intensity (the amount of rainfall received on short timescales), floods and droughts, and extreme fire weather (Climate Council of Australia 2014)—will likely reduce production of most agriculture commodity groups, increase the variability of production and affect product quality. Furthermore, such climatic changes would alter the location of agriculture, particularly at the dry and wet margins of existing activities, as well as increase the risks of some form of natural resource degradation such as soil erosion. Importantly, climate change impacts will likely be co-occurring with the large range of other changes (as mentioned above) making long-term predictions of the future of agriculture highly uncertain (Howden et al. 2014). At the same time, it is increasingly recognised that regions can make a major contribution to adapting to and mitigating climate change; for example, through the introduction of industries better adapted to future climatic conditions and/or renewable energy, and as carbon sinks or carbon energy offsets (Wilson and Piper 2010). A modern agriculture will undoubtedly be at the forefront of new forms of regional/rural development, but to do so it will need to develop in accordance with well-thought longterm strategies to confront the challenges, including effective adaptations that involve a range of technical, managerial, community and institutional responses. This will require a spatial (or territorial) planning approach incorporating three levels of analysis and work: (1) strategic, (2) sub-regional/Production Areas, and (3) enterprise. Production Areas (PAs) are defined in this article as spatial (i.e. geographic) areas within regions that are selected for the intensive sustainable development of agriculture (including forestry, agro-forestry and bio-energy), their associated activities, and underpinning infrastructure (see also next sections). (1) The strategic level focuses on the formulation of a strategy, or strategic framework, for the long-term development of the region of concern as influenced/ impacted by key socio-economic and environmental driving forces, particularly climate change. The strategic framework should identify: (i) the best locations for a small number of selected PAs, and (ii) the main commodities (comprising


agricultural, forestry, agro-forestry and biomass) that can be produced sustainably into the future (e.g. up to 2070) in the PAs. This should also encompass the analysis of the required transitions between (existing and proposed) land uses including options for reforestation (plantation forestry and agro-forestry) of the less productive land. (2) The sub-regional/Production Areas level is developed within the framework established at the strategic level of the spatial hierarchy. At this level, a desirable spatial allocation of sustainable food-production activities that enhance economic competitiveness and environmental outcomes should be established. Based on this information, the role, functions and requirements for each of the selected PAs should be fully detailed. (3) The individual enterprise level focuses on typical farm enterprises (e.g. a dairy farm or a horticulture farm) to determine the closed-loop options in terms of adaptation to climate change, use of renewable energy, and management practices and activities to achieve agro-ecological sustainability including recycling (for water, waste, etc.). The trajectories or pathways underpinning the strategic framework should offer room for manoeuvre at the other levels of the spatial hierarchy; i.e. ‘creative spaces’ to innovate with diverse and more contextually-depended combinations of natural, social, economic and territorial resources in sustainable ways for both rural areas and urban centres. In this article, we will analyse only some aspects of this approach with especial focus on Production Areas in Gippsland.

Production Areas—Theoretical Basis The authors of this article conducted a search on possible models to guide a strategic approach to the sustainable development of non-metropolitan regions (i.e. regions as defined above) in Australia; it was concluded that the so-called eco-economy model is a more appropriate one. This conceptual and empirical model, recently developed in the European rural development context, directly addresses the links between novel coproduction and consumption networks and new governance frameworks (van der Ploeg and Marsden 2008; Kitchen and Marsden 2009; Journal of Environmental Policy and Planning 2009; Marsden 2010).2 The making of a strong regional/rural eco-economy, whereby multi-functional land-based activities create synergies with each other in a more sustainable way, is built around principles of endogenous (i.e. intra-regional generated) development, novelty production and sustainability.3 The model has proven 2 It is interesting to note that in the 1970s, Friedmann put forward an ‘agropolitan’ approach for territorial development, particularly of rural areas, which shares some elements with the eco-economy approach of Marsden and others (Friedmann and Weaver 1979). 3 Regional endogenous development theory combines three main dimensions (or fields) of development: the economic dimension, derived from the concept of economic growth using inputs that are at least partially sourced locally; the socio-cultural dimension reflecting cultural needs and community identity; and the political (and institutional/organisational) dimension relative to decision making and involvement of regional/local groups and individuals in the policy process (Moulaert and Sekia 2003). Ethical and naturebased considerations lead to the inclusion of a fourth main dimension—the ecological or environmental—thus creating a holistic (i.e. systemic) approach to sustainable development. See also Footnote 4.

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useful in explaining urban–rural development in various countries, including Brazil, Germany, France, Italy, the UK, the USA and China (Jingzhong et al. 2010; Marsden et al. 2011). The theoretical basis of the eco-economy model shares many features with the notion of the ‘multifuntionality of agriculture’ (OECD 2001, van Huylenbroeck and Durand 2003; Wilson 2007; Cairol et al. 2009) which, despite some limitations, is a relevant framework for analysing the current and ongoing transformation of agriculture and rural regions. This notion emerged in the 1990s as a consequence of the undesired and largely unforeseen environmental and societal consequences and the limited cost-effectiveness of the Common Agricultural Policy (CAP) in Europe which mainly sought to boost agrarian outputs and agricultural productivity. Outcomes of pursuing these economic objectives served to highlight the inadequacy of a sectorally-based agricultural policy (European Commission 1997). It also led to a questioning of the need for or desirability of continued scale enlargement of, and specialization in, agricultural enterprises. As policy-makers and researchers re-affirmed the importance of sustainable development, they re-discovered the multiple functions of agriculture and, more holistically, of rural areas (Brouwer 2004; Kroger and Knickel 2005). Three main concepts underpin the eco-economy model of rural development. Interrelations between the functions of agriculture and the development of rural areas This is a central idea of multifuntionality—i.e. agriculture and rural areas fulfil a broad range of functions for society in addition to its primary one of providing food and fibre. They include the generation of employment and income in rural regions, the conservation of natural resources (such as water, soil and air) and wildlife, the provision of space and landscapes for recreation and tourism, and the maintenance of an agrarian and rural culture (OECD 2001; Thompson 2008). Core features of the eco-economy may thus be seen as multifunctional agriculture and forestry/agroforestry, together with other landbased and service enterprises embedded in a region, as put forward by Kitchen and Marsden (2009) and depicted in Fig. 1. Note that all the potential sectors of the eco-economy are related to natural (renewable) resources, with the sole exception of ‘mining and quarrying’ which utilises non-renewable resources. The place of agriculture within society—Re-embedding agriculture in society The renewed emphasis on a multifunctional agriculture can be considered as the result of the changing needs and demands of consumers and society. In this context, it is argued that rural enterprises need to adopt new strategies that are variously described under headings like ‘diversification’ and ‘pluractivity’ (van der Ploeg et al. 2002; Knickel and Peter 2004). In addition, new approaches are being adopted, notably in terms of network and institutional (governance) arrangements (Renting et al. 2008; Knickel et al. 2008). The relation of multifunctionality with sustainability While the interrelations between functions and social re-embedding of agriculture are both at the heart of the ecoeconomy model and multifunctionality, their effect becomes substantial if they facilitate


Fig 1 Potential sectors of the rural eco-economy

sustainable development. 4 In terms of resource use, sustainability is about utilising natural resources in a way that can be sustained in the long-term. Multifunctionality applies, more specifically, to the multiple uses of land, through the activities implemented. It follows that multifunctional agriculture has the potential to contribute to sustainable development and that increasing the multifunctionality of agriculture can make an important contribution to sustainability, even though it might not be necessarily sustainable (European Commission 2005). On the basis of the foregoing discussion, the definition of the eco-economy, put forward by two of its main proponents, can now be stated: BThe eco-economy consists of cumulative and nested webs of viable businesses and economic activities that utilise the varied and differentiated forms of 4

However, multifunctionality and sustainability are different notions. Sustainability is a normative approach related to society’s readiness and capability to develop resource-conserving lifestyles and consumption. It is an ‘end’ towards society should move; whilst sustainable development is the ‘path’ towards that end. As a resource-oriented notion, sustainability requires maintaining some aggregate measure of economic, natural and social capital, with a possibility of trade-offs between them (in a ‘weak’ interpretation of the concept) in order to meet the needs of future generations (Pearce et al. 1989). Therefore, it has a temporal dimension (Cairol et al. 2009). Multifunctionaliy is an activity and outcome-oriented notion. It describes the characteristics of farm production and the diverse functions of the land resource, focusing on the connections. It lacks a direct temporal dimension. In most research, multifunctionality has nevertheless some normative emphasis, but it is better used as a conceptual and analytical framework. See also National Research Council of the National Academies (2010).

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environmental resources (as combinations of natural, social, economic and territorial capital) of rural areas in sustainable ways^ (Kitchen and Marsden 2009, p. 289). This interpretation (and definition) is different from what in some policy and academic arenas has been termed the ‘bio-economy’, which tends to focus on the (largely corporate-controlled) production of biomass and bioenergy, together with other strands including biotechnology, chemical engineering and enzyme technology (see, for example, Juma and Konde 2001).

Study Region The study region where the methodology (to be explained in the next section) was applied is Gippsland in the State of Victoria, Australia. Gippsland, a predominantly natural resource-based region, is located to the south-east of Melbourne; its western boundary is about 90 km from that metropolis and extends about 300 km from east to west. The development of Gippsland substantially depends on two strategic drivers of change (or driving forces): (i) a strong economy based on its natural resources, and (ii) the adaptive capacity (or adaptability) of its people and organisations to the changing times. Gippsland’s natural resources underpin the region’s and Victoria’s economy (see Fig. 2). They comprise agriculture produce, including significant dairy exports from high value agricultural land; vast areas of public land and state-owned forests; coal resources in the Latrobe Valley; oil and gas from the Gippsland Basin; and nature resource-based tourism in the Gippsland Lakes and other important coastal and mountain attractions. Gippsland is characterised by the diversity of its urban centres and towns. Most of the region’s population lives in the Latrobe Valley and the major urban centres of Bairnsdale, Leongatha, Sale, Warragul and Wonthaggi and towns close to these centres. Their roles and functions and the relationships to each other are shown in Fig. 3. Gippsland’s population is projected to grow by some 50,000 people through 2026 to around 310,000—a 20 % increase on the current population. Much of the projected population growth will be within the existing hierarchy of centres and towns (GRP PCG 2010). Adapting to climate, and others drivers of, change and transitioning to a lowcarbon economy are significant challenges to Gippsland’s people, industries and organisations. However, this transition also brings enormous opportunities for the region to lead in the research, trailing and implementation of technologies and practices that will enable Gippsland to develop in a sustainable way. In contrast to a constrained brown coal future, Gippsland’s agricultural land is an appreciating resource. Agriculture employs nearly three times as many people as the power industry and is blessed with some of Australia’s best soils and


Fig 2 Gippsland’s conservation and natural resources

Fig 3 Gippsland’s urban centres – roles and functions (GRP PCG 2010)

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most consistent (both current and projected) rainfall. The agricultural sector is also a crucial springboard for others sectors of the economy, such as food manufacturing industries which in Victoria takes over 50 % of the primary agriculture produce and more than 90 % of Victorian milk is used for manufacturing cheese, butter, ice-cream and sweets, and milk powders (Latrobe Valley Transition Consultative Committee 2012; Snell and Fairbrother 2013). Therefore: Gippsland’s successful future and transition to a low-carbon economy and society is inextricably linked to the successful future of its agric u l t u r e . T h i s m e a n s t h a t G i p p s l a n d ’s p a t h w a y t o sustainability—guided by a long-term strategic framework and implemented through short- to medium-term projects—must be rooted in the sustainable development of its agriculture (including forestry, agroforestry and bio-energy). In this context, a study titled ‘Agriculture Industry Transformation— Gippsland’ (AIT-G) is developing a vision and a set of economic, social and environmental opportunities of how Gippsland can adapt to climate, and other drivers of, change and transform into a lower carbon society and economy. Vision and actions will be key components of the strategic framework for the long-term sustainable development of the region (refer to the spatial hierarchical approach mentioned earlier). The AIT-G has already produced for Gippsland: (i) climate information (past, current and projected) at a high resolution (5 km2 grid), (ii) detailed soil information, and (iii) based on this information, it has modelled a variety of agricultural commodities under several climate change scenarios. This information is an important component of the methodology.

Methodology The methodology for the identification, definition and analysis of Production Areas is shown in Fig. 4. At the core of the methodology is the application of biophysical Land Suitability Analysis (LSA) for those agricultural commodities currently cultivated in the region and those that could be grown in the future in the unfolding climatic conditions. LSA is defined as the process of determining the fitness, or appropriateness, of a given area of land for a specified purpose (adapted from FAO 1977; see also McHarg 1969/1992). LSA uses a multiple criteria method—the Analytic Hierarchy Process—AHP (Saaty 2000)—in a GIS environment. In the AIT–G Project, the modelled agricultural commodities were categorised in six groups: fruits (pome fruits— apples), viticulture (warm and cool grapes), vegetables (brassicas and artichokes, carrots, peas, potatoes), cropping (cereals—winter wheat), pastures as proxies for dairy and beef production (perennial rye grass/white clover and


Fig 4 Methodology for the identification, definition and analysis of Production Areas in regions

phalaris/sub-clover), and forestry (blue gum and radiata pine). These commodities were modelled for a baseline (average of the climatic conditions in the period 1996–2005) and in various future years (2030, 2050 and 2070) under three global emission ‘marker’ scenarios developed by the Intergovernmental Panel on Climate Change (IPCC)—from low to medium and very high

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scenarios (B1, A2 and A1FI respectively) (Nakicenovic and Swartz 2000). 5 However, in this article we will only present the projections for 2050 under the very high emissions scenario (A1FI) because observed climatic conditions in the past years indicates that climatic changes are already tracking above the projected trajectory of this marker scenario (Whetton et al. 2014; Climate Council of Australia 2014). The combined suitability for each of the groups, which we have termed agricultural land versatility, enables to pinpoint the areas where a group, say forestry, can be grown in the region and compare it with the results of the modelling of the remainder agricultural commodities (or groups) to finally identify the areas for a possible, desirable allocation of land uses across the region. It is reasoned here that an agriculturally-based region, such as Gippsland, will have a greater capacity to respond to climate, and other drivers of, change if the concept of ‘high value’ agricultural land is associated with the capacity to sustain multiple agricultural uses. Furthermore, land which has been identified as biophysically suitable will have the added benefit of requiring less of those inputs that would damage the environment or are considered a food security risk (e.g. the application of some chemical products). The notion of agricultural land versatility is closely associated with the concept of ‘high value’ or ‘prime’ agricultural land. Over decades, land, environmental, agricultural and soils scientists have discussed ways to define ‘prime’, or ‘high value’ agricultural land. Although there is no universally agreed definition, a generally accepted definition in Europe, for instance, is: Bprime agricultural land includes land suitable for agriculture due to its physical, chemical and biological properties, which best meets the conditions of providing maximum yields while providing least pressure on the environment, and requiring least inputs^ (Verzandvoort et al. 2009, p. 3). For example, the procedure by which to identify ‘high value’ agricultural land for two agricultural commodities (e.g. forestry: blue gum and radiata pine) requires a combination of the resultant LSA for each of these two commodities—this produces a composite map of ‘biophysical agricultural land versatility for forestry production’. When this map is combined with the resultant (similar) maps from the other groups, an overall composite map of agricultural land versatility is produced (see Fig. 9). As shown in Fig. 4, the overlay of several constraints (e.g. flood, erosion and salinity risk) and resources (e.g. water and transport) finally enables the identification of PAs and the land available for various activities within each of them. This leads in turn to the identification of policy responses particularly in terms of ‘infrastructure requirements’.

5 In the IPCC Fifth Assessment Report (AR5) a new set of scenarios—termed Representative Concentration Pathways (RCPs)—was used that largely replaced the IPCC Special Report on Emissions Scenarios (SRES) used in the IPCC Fourth Assessment Report (AR4) (see IPCC 2013a-c, and Nakicenovic and Swart 2000). In contrast to the AR4 (where the scenarios were substantially policy free), the climate change from the RCP scenarios in the AR5 is framed as a combination of adaptation and mitigation. The simulations were carried out under the framework of the Coupled Model Intercomparison Project Phase 5 (CMIP5) of the World Climate Research Program. Four RCPs, representing a large set of mitigation scenarios, were selected from the published literature and are used in the AR5 for climate projections; they have differing targets in terms of radiative forcing at 2100 (IPCC 2013). It should be noted that a more recent climate model ensemble is now available for Australian regional projections (Taylor et al. 2012). However, projected climate changes over Australia differ little from the results shown in this article using the previous models (Whetton et al. 2014).


Based on the extensive analyses undertaken as part of the AIT-G Project, and applying the methodology just described, fifteen potential PAs were identified in the study region. These were discussed with the Steering Committee of the AIT-G Project which led to the narrowing down to only three PAs for analysis: Orbost, Macalister and Moe (see Fig. 5). As an example of the application of the methodology, the following section outlines the main elements of the Macalister Production Area.

Application of the Methodology—Macalister Production Area The Macalister Production Area—MPA (Fig. 6) is located in Central Gippsland and takes its name from the Macalister River, the main source of the region’s irrigation water. The MPA contains the Macalister Irrigation District, an interesting example of intensive land and water use. The irrigation district extends along the main river and covers an area of nearly 55,000 ha with an irrigated area of about 33,500 ha (Fig. 7). The district is the second largest in Victoria and includes 30 drainage sub-catchments that flow into the Macalister, Avon, Thompson and Latrobe Rivers, or directly into Lake Wellington, which forms part of the Gippsland Lakes system. The Gippsland Lakes are a RAMSAR listed wetlands site, a significant tourist attraction and support a number of fisheries (Office of the Commissioner for the Environment 1998). The main towns in the MPA are Sale and Maffra where about 16,000 and 6,000 people, respectively, live. The topography of the MPA ranges from undulating areas characterised by short steep catchments to comparatively flat flood plains. About 50 % of the MPA has light porous soils. Most of the native vegetation – classified as

Fig 5 The three selected Production Areas in Gippsland, State of Victoria, Australia

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Fig 6 Macalister Production Area—Boundaries and main towns

Ecological Vegetation Classes—in this region has been cleared (Fig. 8), and substantially replaced with pastures that require regular input of water and fertilisers to maintain productivity (Christesen 2002).

Fig 7 Macalister Production Area—Irrigated area of agriculture


Fig 8 Macalister Production Area—Ecological Vegetation Classes Conservation status

Dairying is the major agricultural industry in the MPA with approximately 500 dairy farms occupying around 85 % of the land and about 90 % of the irrigated area (Southern Rural Water – Macalister facts and figures; online—accessed on 26/2/ 2014). Commercial vegetable growing is a relatively new industry in the MPA – currently using less than 5 % of irrigated land. However, the favourable soil types provide considerable scope for the expansion of the vegetable industry in this production area as our Land Suitability Analyses have demonstrated. Figures 9 and 10 show, respectively, the agricultural land suitability in the baseline (1996–2005) and in 2050 under the IPCC A1FI emissions scenario. In the maps, the darker green colours show the best areas in terms of suitability for the growth of multiple agricultural commodities. Declines in land suitability in 2050 are substantially associated with reductions in water availability. The MPA is a rain-shadow area and rainfall currently provides approximately 50 % of total plant water requirements. Farmers irrigate to supplement rainfall using a range of sources of water, namely groundwater and drainage water. In recent years, dry climatic conditions have meant the volume of water available for irrigation has substantially declined and become more variable. In addition, the cost of accessing other sources of water has increased with groundwater resources becoming fully allocated while, at the same time, drainage diversions have become increasingly unreliable (Department of Primary Industries 2008). The efficiency of the irrigation system in the MPA is low and has constrained the adoption of improved irrigation technologies and practices that would lead to increased food production (Southern Rural Water; online—accessed on 26/2/2014). A long term planning framework for the development of the MPA should thus be based on capitalising upon the natural advantages of good soils, versatility of agricultural production

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Fig 9 Macalister Production Area—Agricultural Land Versatility in the baseline (average climatic conditions in 1996–2005)

and a comparatively mild climate so that it becomes an increasingly attractive area for living and investment. The opportunity to create water savings and

Fig 10 Macalister Production Area—Agricultural Land Versatility in year 2050 under the IPCC A1FI emissions scenario


flexibility to change growing seasons and crops would also make the area resilient to climate change. Therefore, we have recommended to the Steering Committee of the AIG-T Project that the sustainable development of the MPA should be based on: 1. The continuation of the pasture-related industries, especially dairying and livestock—with the progressive use of varieties of phalaris and sub-clover that are best suited to the likely (i.e. projected) climatic conditions in the future. Associated with this, the development within the MPA of a state-of-the-art plant to produce high value-added milk products, such as milk powder, especially to cater for international (or export) markets (see the Introduction to this article). Branding of the MPA as the Dairy Centre of Victoria. 2. An increased emphasis on intensive vegetable production, particularly vegetable brassicas (a group that includes artichokes, broccoli, cabbages, cauliflower and Brussels Sprouts), potatoes, peas and carrots (all these commodities have been modelled in the AIT-G study) as well as those vegetables currently being grown in this PA including beans, lettuce and sweet corn. 3. Since farmers need to increase their (net) income from selling the agricultural produce in order to: (i) improving their socio-economic well-being, and (ii) being able to contribute to the construction of required infrastructure (see Point 6, below), it seems appropriate that the best areas within the MPA in terms of vegetable suitability (now and in the future) should be reserved/used for intensive vegetable production. 4. Consideration should also be given to other potential agricultural commodities such as cropping (e.g. winter wheat which has been modelled in our study) and biofuel (bio-energy) production (see, for instance, Diogo et al. 2012) associated with the development of Blue-Green Infrastructure (see Point 6, below). 5. Encouragement across the production area of rural agri-tourism based on model farms and the new milk processing plant. 6. Infrastructure for development—two types of infrastructure are being considered: ‘hard’ and ‘soft’. The former includes transport networks (incorporating a new port in Gippsland) which are currently being modelled to serve, in particular, the Production Areas; whilst the latter includes Blue-Green Infrastructure (BGI). BGI is an interconnected network of various components, including water bodies and green and open spaces, both natural and designed, that can provide multiple functions that are critical to ecosystem health as well as services such as (i) water reservoirs for irrigation, (ii) flood control or increased water security during droughts, (iii) water and air purification, (iv) natural pest control, and (v) wildlife habitats and recreation. At present, we are applying an optimisation method, based on a Genetic Algorithm (see, for example, Benke et al. 2011) to investigate desirable spatial allocations of the agricultural commodities mentioned in Points 1 and 2, above, to maximise regional income and/or minimise environmental negative impacts. These strategic recommendations do not imply, however, that other agricultural commodities should not be grown in the MPA; for example, viticulture and pome fruits could be grown in particular areas where LSA has revealed their highest

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suitability rankings (i.e. above 90 %). However, it does clearly highlight that, based on our analysis, greater benefits/returns would accrue in the future if production within the MPA concentrates in the commodities mentioned above.

Discussion Various government interventions have shaped the landscape of the case-study region over the course of 150 years. In the 1840s, graziers starting settling the region and ran cattle over large tracts of land. The cattle fed on native grasses and vegetation, and were driven to Melbourne or the coast for export. After the gold-rushes of the 1860s, Victoria’s population increased significantly so the government introduced legislation that promoted more intensive land use. Under a series of land acts, gold miners were able to ‘select’ land for development into farms according to strict conditions (for example, on a given property it might have been necessary to fence the boundaries, build a house, clear the land of trees and cultivate the land each year). Selectors began arriving in Gippsland in 1865 and had a major impact, despite setbacks that included floods and fire—they were responsible for clearing the land, establishing many of the towns that still exist today, and for founding regional institutions like schools, churches and local governments. Much of the grazing land was progressively converted to mixed farming and dairying, particularly on the dry plains that would one day become the MPA. Government policy intervention continued when in 1898 the Closer Settlement Act was introduced, to promote more intensive land use, increase agricultural exports and increase rural populations. Under this scheme, the government purchased large estates and subdivided them into smaller allotments. However, the allotments were generally too small to create viable farms so the policy was a failure. Despite this, the scheme was expanded after World War I to repatriate returning soldiers on farms. Some returned soldiers abandoned their small and unviable farms, while others struggled due to their proximity to flood-prone rivers. In the 1930s, a new distribution of land was carried out to increase the size of farms and to assist those on flood plains to move to farms on higher ground. After World War II, a much better conceptualised soldier settlement scheme was implemented with more success. It was during this period that the government introduced two critical pieces of infrastructure that underpinned the long term success of agriculture in this region; irrigation and roads. The Closer Settlement Act required farmers around the Boisedale district to supply 10 acres of sugar beets to the government owned sugar beet factory in nearby Maffra. A severe drought in 1914 caused farmers to band together and lobby the government to establish a dam on the Macalister River. The first water was delivered from the dam (Glenmaggie Weir) to Boisedale farmers in 1925. This was the forerunner of the Macalister Irrigation District. Similarly, representatives from 18 Gippsland councils lobbied the government in 1911 to fund the construction of a road. The Gippsland ‘main road’ was operational by 1913 and formed the primary coastal link between Melbourne and Sydney. The council representatives then lobbied the government for ‘development roads’—roads that provided farmers with access to railways. The Development Roads Act was passed in 1918, which sparked the construction of many such linking roads.


In the 1970s, governments starting subdividing farmland on the fringe of regional towns, in order to provide what is known today as ‘life style’ properties or hobby farms. While this practice often revitalised towns in the short term, it often meant that intensive farming (such as dairying) was forced elsewhere. Today, urban expansion of regional towns is a contentious issue because of competition and conflict with agricultural land uses. So, government intervention in the past has (to some extent) dictated where production of particular commodities took place. Should government intervention continue in order to realise modern Production Areas? A standard justification today for government intervention in economic activity is the existence of market failure—that is, some problem that results in inefficient outcomes. Often, market failure is caused by information asymmetry (where information is only available to some parties to a market transaction) or by misperception of risk. In both cases, government can play a key role to address market failure by providing information to increase awareness (knowledge of risks), by developing and implementing appropriate policy instruments and by direct regulation. The methodology presented here is a means to inform government intervention in the looming market failure that is climate adaptation in regional production areas. As the word indicates, a methodology is a logos of methods; i.e. it can be considered as a generic framework that provides the structure within which models, methods, techniques and tools (broadly referred here as ‘methods’) are deployed to achieve the specified objectives of a particular research or study. Methodologies are based, explicitly or implicitly, on assumptions concerning the phenomena under study and the appropriateness of various forms of action (Midgley 2000). The methodology explained in this article has a strong sustainability underpinning. Its core method—Land Suitability Analysis—enables the identification of the best areas of land to grow particular agricultural commodities in terms of requiring less inputs (which in turn may have environmental benefits such as reduced nutrient or pesticide run-off into waterways). This also has an associated financial benefit to the farmer in reducing the funds required to produce the commodity in question. Other types of models could be deployed in our methodological framework, instead of LSA, to determine the behaviour of agricultural commodities under different conditions such as those termed ‘production models’. For instance, the use of CSIRO 3-PG2 model (ABARES 2011) or APSIM (Keating et al. 2003) to assess, respectively, climate change impacts on forestry and cereals. However, some of these models rely on extensive information on plant growth parameters, such as daily values of climatic variables, which, when projected into the future, become quite problematic. An important advantage of our spatial analysis methodology is the use a Geographic Information System (GIS) tool to produce the main outputs in the form of GIS layers (as illustrated in Fig 2), complemented by succinct and clear explanations. It permitted, in particular, the rapid transmission to stakeholders of relevant outputs in a form that can be easily understood and/or their immediate use in presentations in public forums and workshops to communicate findings and encourage debate on key issues, such as climate change. This has been especially valuable in engaging during the development of the project with farmers, agribusinesses, government agencies and private organisations. In addition, GIS-layers and supporting information are building blocks of a Regional Information System (being developed) that in the future can be upgraded to

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an interactive Decision Support System (DSS). In the same vein, we are currently investigating ways of producing certain outputs of the project in CD-ROM format for widely distribution to people and organisations in the study region, as was already done on the historical and projected climate information for the study region. The eco-ecology model of regional/rural development was very useful in guiding the thinking on possible determinants of the sustainable development of Gippsland—a non-metropolitan, predominantly natural resource-based, region. This also included consideration of Blue-Green Infrastructure and ‘green’ sources of energy (e.g. biofuel production) as key components of the sustainable developmental approach. Moreover, the encouragement to regional/local organisations, especially Local Governments, to adopting a more pro-active role to regional/rural development was underpinned by reference to real-world overseas examples of the eco-ecology model.

Concluding Comments There is an imperative need to prepare society for a complex, uncertain and risky future brought about by multiple driving forces, such as those of climatic changes that will unfold whatever the trajectory of GHGs emissions. For regions, their communities and, particularly their agricultural and forestry industries, to realise their aspirations in turbulent contexts, we need to anticipate the changes and develop and implement adaptation actions now. In a very perceptive and holistic analysis of environmental, including climatic, changes in past societies, Diamond (2005) argues that two types of choices have been crucial in tipping their outcomes towards success or failure: (i) long-term planning and (ii) a willingness to reconsider societal core values. The first of these choices has depended on the courage to practice long-term, strategic thinking as well as to take bold, courageous and anticipatory decisions at a time when problems have become perceptible but before they have reached crisis proportions and critical thresholds have been overcome. This type of decision making is precisely the opposite of the short-term and reactive one which often characterises how decisions are made in government and private organisations. The other crucial choice informed by the past involves the courage to make, sometimes painful, decisions about core values. This implies, in particular, a fundamental rethinking on the economic basis of our societies to move towards sustainability in all areas of living and work. The creative use of Production Areas, and possible key components such as the Blue-Green Infrastructure, are one of the most promising actions for adapting to rapidly changing human and environmental circumstances in regional/rural systems. This ought to be recognised in the planning process, especially in the formulation of Regional and Rural (Spatial) Development Strategies. The scale and interconnectedness of the problematic situations confronting regional/rural systems, its human communities and natural ecosystems are such that only well-thought systemic intervention practices, which are ethical, take account of multiple viewpoints and are sensitive to the ecology we are a part of, would offer hope of successfully tackling them.

Development of Regional Production Areas in a Changing Climate Acknowledgments This article outlines research that was supported financially by the Gippsland Local Government Network (GLGN, which comprises the six Local Councils of the Gippsland region), Region Development Australia—Gippsland Committee, Deakin University, The University of Melbourne, and the (former) Victorian Department of Primary Industries. We would also like to thank the manuscript reviewers who provided valuable comments that made the final version of this paper significantly better.

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