The total use of water for agricultural production has been decreasing, while the total gross value remains steady, according to a report issued today by the Australian Bureau of Statistics.

The country's total Gross Value of Irrigated Agricultural Production (GVIAP) for 2007-08 slightly went down to $12.3 billion, from almost $12.5b in 2006-07. In general there has been a rising trend in GVIAP since 2000-01 when it was $9.7b.

Water use for irrigation declined from 7,636 gigalitres in 2006-07 to 6,285 gigalitres in 2007-08.

Director of the Centre of Environment and Energy Statistics at the ABS, Michael Vardon, said, "It's tempting, but wrong, to conclude that productivity in irrigated agriculture is improving and that the highest value use of water is to grow vegetables, flowers, grapes and fruit. But, we simply cannot tell at the moment what is going on with productivity in irrigation as water is only one of the factors of production."

"You also need labour, land, energy, tractors, sheds, fences and so on to produce food. Growing vegies in glasshouses on the edge of Melbourne has a completely different set of cost structures to growing wheat near Berrigan in New South Wales. The overall costs of growing vegetables mean that while their gross value is higher, the profit to the farmer is not necessarily the highest," Dr Vardon said.

"It is also interesting to see that the value of rice production fell sharply, while cotton also slid a long way. Both of these crops rely on large quantities of water, so in dry years most farmers simply don't plant them. The patterns of water use and gross value of irrigated production fluctuate from year to year so it will be interesting to see what happens in the next set of data, which is due out in November in the ABS Water Account."

For the first time, the ABS has estimated GVIAP for Australia's Natural Resource Management regions. The region with the highest gross value is Goulburn Broken in Victoria, with $896 million. Meanwhile, the region with the greatest change in value between 2005-06 and 2007-08 was the Murray region in NSW, declining from $439 million to $205 million.