It’s the first day of the corn harvest and as a header moves cautiously through the crop, a message is delivered via two-way radio.
“Don’t be afraid to use a bit of speed,” says one of the managers in a nearby truck.
That is a polite way of saying hurry up, as not only the wet season approaches, but as the latest foreign entrant to the Ord River in remote northern Australia pushes hard to prove its concept can work.
After five years of often halting development, political pushback and general scepticism within the farming community, the Chinese-backed Kimberley Agricultural Investments (KAI) is accelerating a plan that, if successful, will create one of the biggest irrigated farms in Australia, an operation to rival Queensland’s Cubbie Station within a decade.
“I spend half my life being excited and the other half shit scared it’s not going to work,” says Jim Engelke, the general manager of KAI.
His excitement is easy to comprehend.
As Australia’s eastern states battle rolling drought, the irrigation channels around the Ord River are bursting with water. In the nearby town of Kununurra, the parks are a deep green and sprinklers shower even the footpath, as if to boast about the region’s abundance of water.
As for that header, now moving at a more appropriate speed through the laser-levelled black soil, it is harvesting one of the highest-yielding corn crops in Australia ready for export to South Korea.
Water, crop yields or good soil are not the source of Engelke’s anxiety. He’s battling isolation, a lack of infrastructure, skill shortages and nearly 80 years of history.
“This is not about building a farm, it’s about building an entire region,” he says from the front seat of his Toyota Land Cruiser as it moves across the farm.
Corn is the start, cotton and cattle are to come.
‘Valley of the gods’
Back in Kununurra, where the lack of federation-era charm is more than offset by pre-wet season hustle, the restaurants are busy, the hotels booked and there’s even an espresso bar.
Established in 1961, as a fulcrum for those forging north, these days the town of 7000 people is an eclectic mix of farmers in elastic-sided boots, construction workers, backpackers doing their time in regional Australia, the local Aboriginal community, grey nomads and workers from nearby Argyle Diamond Mine.
For a little more colour there are crocodiles in the rivers and brown snakes in the bush.
Creating an expansive irrigation district around the Ord River in Western Australia’s East Kimberley has been the ambition of successive governments since the Durack family helped establish the first experimental farm in 1941. Sixty years before, Alexander Forrest had identified this land of “good grass and water”, first prompting the desire to forge north and develop.
What drove the Duracks and those who followed was the black soil plains of the Ord Valley, laid down by an ancient river which cut the sandstone cliffs that now frame this region.
Water was the other mesmeric factor. Australia may be the driest inhabited continent on earth, but this region on the Cambridge Gulf can get as much as 1.6 metres of rain during the wet season, filling the man-made Lake Argyle with 18 times more fresh water than Sydney Harbour.
In the updated vernacular this is “the valley of the gods”.
Investment on an unseen scale
For all the alliteration and divine comparisons, however, the dream of creating a food bowl in the north has largely gone unfulfilled amid commodity market fluctuations, a lack of scale and the sheer isolation of this community, 827 kilometres by road from Darwin.
But the region’s 80 years of promise is now closer than ever to being fulfilled. The turnaround started when the WA government and the Commonwealth committed $529 million in 2008 to develop more farmland and upgrade roads and social infrastructure in and around Kununurra.
That money opened up a new irrigation district known as Ord Stage 2, providing some much needed scale to the 15,000 hectares developed gradually from 1963.
This opportunity brought with it Chinese money from the privately owned Shanghai Zhongfu Group, controlled by property developer Wu Puingai.
Its local subsidiary, KAI, won the development rights in 2012 and the accepted narrative that has followed Wu ever since is that only “patient Chinese capital” would have ever attempted such a project.
“That’s rubbish,” says Engelke.
“They are as impatient as the rest of us.”
That might be true but Wu has already spent $250 million clearing land, building irrigation channels, buying the nearby Carlton Station and associated assets such as a machinery dealership and the local Country Club.
Despite a scale of investment unseen in the north, outside the mining sector, KAI is not even halfway through its land development plan.
It will nearly double its irrigated area to 7400 hectares within the next 18 months and over the following five years is targeting a further 10,000 hectares.
At $10,000 a hectare to develop that’s an additional $130 million in required investment.
“The question is will they get a stitch,” says one prominent agricultural investor from Melbourne, who is watching KAI with interest.
“Can they sustain this level of investment or will they leave like many before them?”
This is the source of Engelke’s anxiety.
“In many instances it’s the second or third investor which makes the money. It’s my job to make sure that does not happen this time,” says the 47-year-old.
The early signs were not encouraging. KAI quickly backed away from its promise to develop a sugar mill, then experimented with ancient grains including chia and other crops like sorghum as it gradually opened up land once covered in heavy scrub.
But in the past two years the very basic question of what to grow has largely been settled.
Cotton is the future of what Engelke describes as an “integrated but diversified” farming plan.
“Cotton is the enabler of everything,” he says.
After two seasons of experimenting with new varieties, Engelke is certain cotton is the transformative crop the Ord requires. KAI planted 350 hectares this season as part of a trial and is targeting 12,000 hectares within a decade.
The next step is to build a cotton gin, costing up to $30 million, which KAI will make a final investment decision on by year’s end.
If the gin goes ahead it will be back to the future for the Ord, which had cotton as its foundation crop in the 1970s. It only lasted four seasons as the local caterpillar population quickly developed resistance to chemical sprays. New genetically modified cotton, which is bug resistant, is proving more successful.
The ‘water chasers’
“The results this year have been really good,” says Carolyn Palmer, an agro-scientist working at the Ord River District Co-operative, which provides consulting services to KAI and others.
Like many working on farms across the Ord, she is a self-described “water chaser” from the western NSW cropping region of Wee Waa, which only planted small areas of cotton this year due to the drought.
“”All my friends at home are pretty jealous of the crops [in the Ord] we planted this year,” says Palmer.
Known to all as “Tommy”, she will move up to the Ord full-time next year, a small part of a migration of farmers from the southern states looking for more reliable access to water.
This is the other giant narrative working in the Ord’s favour.
“As the climate in the eastern states becomes more variable, reliable supply from the Ord is going to become even more valuable,” says Robert Boshammer, a local farmer and business owner.
He came to the Ord in 1985, after experiencing one too many droughts in Queensland and South Australia.
“I saw the water and never left,” says the 60-year-old.
Touring his 1500-hectare block in Ord Stage 1, the water differential from eastern Australia is impossible to ignore. His chickpea, mung bean, corn and hay crops are thriving, fed by water from Lake Argyle.
As tractors are busy picking up recently bailed hay, Boshammer outlines what he sees as the next chapter for the Ord, one that is all about cotton being the enabling crop, described by Engelke, and cattle the end game.
Cotton to cattle
If KAI goes ahead and builds its planned cotton gin, the lint will be exported for spinning, but the residual cotton seed will provide a valuable source of protein, which has long been lacking at an economic price in northern Australia.
The cotton seed, combined with Boshammer’s hay and locally grown corn, can then be fed to cattle during the dry season enabling them to put on weight. This provides the opportunity to supplement the low-value live export trade with heavier cattle to be slaughtered locally or shipped as more valuable animals.
“Live export is the lowest-value option available,” says Boshammer.
Feeding during the dry season should also raise calving and branding rates, which now sit around 50 per cent on the cattle stations surrounding the Ord – in eastern states calving rates are usually above 90 per cent.
“Farmers are already finding their cattle doing much better on our hay,” he says.
Boshammer expects to grow about 12,000 tonnes of hay next year, up 20 per cent from this year, and is in advanced stages of establishing his own feed yard on the edge of Kununurra.
He sees the opportunity to feed more than 30,000 head of cattle, which could be exported, slaughtered locally or returned to their stations after the dry season.
His family also expects to devote about 30 per cent of their farm to cotton by 2020 if the gin is built.
Chinese play essential role
This is the “integrated but diversified” model Engelke is championing, where farmers loosely co-operate to develop an industry built around cotton, feed crops and cattle.
This latest vision for the Ord is largely dependent on the success of KAI and Wu’s ability to keep funding its development for at least five more years.
That makes China the swing factor once again, like it has been in the mining sector for the past decade. And that exposes the Ord to the byzantine world of Chinese politics and Wu’s ability to navigate the often perilous path of being a private entrepreneur inside a communist and increasingly totalitarian regime.
Staying on the right side of the Communist Party is one risk factor, continuing to get money out of China is another. Both add an additional layer of complexity to an already ambitious undertaking.
Engelke says the funding pressure on Wu will ease somewhat as the farms begin to throw off reasonable cash in three to four years, subject to land-clearing approvals and building a cotton gin. Providing a return on his $400 million in scheduled investment should come in a decade.
“It’s the same for farmers all around the country who make long-term investments,” says Engelke.
David Farley, the former chief executive of AA Co, which was the under-bidder to KAI on Ord Stage 2, is a believer that cotton is the right crop for the Ord.
“The Ord is unique in its isolation, but it is not unique in terms of its growing conditions. Cotton regions in California, Texas and Mexico are very similar,” he says.
“The issue is the incredible capital cost. We [AA Co] didn’t baulk at the challenges of agriculture in the Ord, we just got outbid. I think we will look back in 25 years and think this was one hell of an investment.”
Farley, who was also a former cotton executive, says the Ord’s ability to access water is better than anywhere in Australia. “KAI’s success will be determined by how quickly they can achieve scale,” he says.
That is about 20,000 hectares of cropping land, which should happen within 10 years, according Engelke.
That would make KAI slightly smaller than Cubbie Station in developed land area, but with far greater security of water and none of the political heat around diverting river flows and starving growers downstream as far as Adelaide.
“The amount of land is an irrelevant number. It’s about how much water you can access,” says Engelke.
That is not a problem for the Ord. The valley’s water requirements can be met with just a couple of days of average wet season falls.
The challenge, as the corn harvester was politely told, is making it all happen quickly enough.