Northern Australia's cotton growers will soon be spoiled for choice with two cotton gins to be built over the next couple of years.
The Katherine cotton gin broke ground in August and is on track to open in time for the 2022 season, and now Kununurra's farmers have received a boost with the Northern Australia Infrastructure Facility approving a loan of up to $32 million to construct stage one of a cotton gin in the Kimberley town.
The Ord River District Cooperative, Kimberley Agricultural Investment and the Miriuwung Gajerrong Corporation are working collaboratively to build this gin from the ground up.
The cotton gin will establish a new cotton growing industry in northern Australia worth an estimated $925 million and create 30 full-time jobs during construction and 21 new jobs during operations.
Minister for Agriculture and Northern Australia David Littleproud said there was a lack of cotton gins in the region, and that building one will remove the need to transport unprocessed cotton interstate.
"With farmers, including Traditional Owners, working closely together with government, this investment by NAIF shows what economic development can look like in northern Australia," he said.
"The cotton gin has been talked about for a long time, and the construction of local cotton processing facilities will be the trigger for much broader investment in the region."
Tipperary station general manager David Connolly, who is also WANT (Western Australia Northern Territory) Cotton chairman, said the Katherine gin will take the pressure off farmers and logistics.
He said now that growers will have the opportunity of two gins in the north, it will certainly make growing cotton more profitable.
"When Katherine gin is up and running the Ord growers can travel to here instead of the 4000 kms to Dalby or St George, until theirs is built," Mr Connolly said.
"Farmers mainly use wet season rains to grow the rain fed cotton with many more growers converting from different crops to cotton plantings."
Overall 80 per cent of crops are grown using the monsoonal rains with 20 per cent on irrigation.
NAIF CEO Chris Wade said the investment was part of the government's $5 billion loan facility for infrastructure projects across northern Australia and takes the total amount committed by NAIF to date to more than $3.1 billion.
"The NAIF loan is subject to customary condition precedents, which include regulatory and environmental approvals," he said.
The McGowan government has welcomed the significant milestone towards establishing a viable cotton industry in the state's north, with the Kimberley Cotton Company securing funds to progress towards construction of a cotton processing facility in Kununurra.
Regional Development Minister Alannah MacTieman said the cotton gin was central to the development of a sustainable cotton industry in the north - with raw cotton otherwise having to be transported interstate for processing - providing the impetus for growers to increase production to provide the scale and efficiencies for a profitable industry.
"The state is continuing to work with growers to secure the necessary approvals for farmland that will support the development of the cotton industry in the Ord River Irrigation Area," she said.
A new cotton gin could create more than 1000 direct and indirect local jobs in its first 10 years, generating $1.19 billion in cotton lint exports and flow-on value adding benefits from the cotton seed byproduct as a livestock feed.