Australian growers fuming over lack of water leadership

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Australian growers fuming over lack of water leadership

Australia’s long procession of droughts has been broken, yet as ecosystems flourish and flood water replenishes fatigued catchments, farmers around the nation are finding this valued resource rapidly slipping away.  As political debates rage over the fate of the Murray-Darling Basin and Queenslanders face irrigation prices higher than ever, Australians have been left fuming over a lack of reliable leadership to solve their water woes.

Informed Farmers

On Nov. 28, Australian Federal Government organization the Murray-Darling Basin Authority (MDBA), released a draft Basin Plan which has created pandemonium amongst local communities, with farmers fighting desperately to hold onto their precious water allocations.

The government is concerned that the extensive Murray-Darling Basin (MDB) is over-allocated, with the health of the system in decline, yet finding a balance between economic and environmental standpoints is proving the greatest hurdle.

The plan outlines various key features, in particular a reduction in water use of 2,750 gigaliters (726 billion gallons) each year, despite scientific findings outlining that a minimum cut of 4,000GL (1 trillion gallons) is necessary for the MDB to reap the required environmental benefits of the plan.

National Irrigators Council (NIC) CEO Tom Chesson expresses great concern for the Murray-Darling communities, with fears that cutting water allocations will create extra economic strain.

"Irrigation communities provide real jobs and we say yes to jobs, to growth, to fairness, but if the current Draft Basin Plan is adopted, many of our communities have no future," he says.

"To put it simply if we don’t grow the food or fiber, the food manufacturing sector, which is the country’s largest, will have nothing to process and jobs will disappear."

Chesson urges the MDBA to equally take into account the welfare of society and the economy, as well as environment.

"Pensioners and mums and dads are already struggling to pay the bills and taking water out of productive use as proposed by the draft Basin Plan will increase food prices, which just isn't fair."

MDBA chairman Craig Knowles is confident the steps the authority is taking will ensure that the Basin can be treated as a single entity, rather than governed according to state boundaries.

"This is simply the next step in the ongoing journey of water reform and builds on a lot of good work that has already been done," he says.

"But there is still more to do.  Managing a basin of this size which crosses borders; and where there are many different operating rules, landscapes, and climates means there is no easy or quick fix."

How the Government is going to help?

In an effort to appease the wrath of angry communities, the Australian Government has suggested a buyback scheme, where those not utilizing their water allocations can elect to sell them back to the government.

The government has chosen to invest AUD$4.6 billion (US$4.95 billion) over 12 years to purchase water in the Murray-Darling Basin.

Minister for Sustainability, Environment, Water, Population and Communities Tony Burke, says the buyback scheme will be one further step toward delivering healthy rivers, strong communities and sustainable food production across the entire Basin.

"The water purchased will be used to improve the health of Murray Darling Basin rivers, wetlands and floodplains and will complement the Gillard Government's major investments in more efficient irrigation water delivery and use."

The view from Queensland and New South Wales

New South Wales and Queensland, states usually fiercely competitive, have been united in what is turning into one of Australia’s most widespread wars over water.

Queensland group AgForce, believe that the draft plan will need to be amended before it is received positively by farmers dependent on MDB water.

Despite Queensland’s water extractions from the Basin only representing 1.5% of total usage, the Draft Plan outlined large cuts to allocations, which is a further burden on already struggling farmers.

AgForce water spokesperson Kim Bremner is disappointed with the large cuts, although is pleased that the plan will be reassessed midway through its operation.

"The Sustainable Diversion Limits (SDLs) in this draft plan are still too low, but we are pleased it allows the government until 2019 to buyback water and prescribes a review in 2015 where further refinements can take place."

Bremner also expresses fear over what these cuts will mean for the agricultural and economic well-being of Queenslanders, even with the government’s proposed buyback scheme.

"Let’s be clear that any buyback to water entitlements will result in lower agricultural production which is why we want to be sure the MDBA process is based on solid science and avoids unnecessary impacts on farm businesses and rural communities."

Queenslanders anxiously await their verdict as to whether the government will ignore their desperate pleas and go ahead to introduce additional charges in water bills in many of the large channel irrigation schemes across the state.

After a government commissioned report was released by the Queensland Competition Authority (QCA), in order to determine future SunWater irrigation prices, interim rates were introduced for irrigators at additional AUD$2 (US$2.15)/ML

The New South Wales Farmers Association has also released a document outlining its stance on the issue, expressing great concern about the MDBA’s approach taken to develop the draft Plan.

"We agree that water planning within the Basin must be improved. However, the new Basin Plan must be developed collaboratively with the farming communities that depend on this water for their livelihoods. This process must include careful consideration of the economic consequences to Australia of crippling the production capacity of our most important and productive agricultural system," the document states.

What now?

As the community consultation period for the draft plan draws ever closer to its end, agricultural bodies, farming associations and the MDBA alike are calling on people to voice their opinions on the issue.

Australians are called to reflect carefully on the environmental, social and economic implications of the plan, as there is no doubt that this scheme will have monumental affect upon not just the region, but the nation as a whole.

Whether a genuine environmental concern, or a petty political agenda, Murray-Darling communities must brace for what could become their longest drought yet.

The Queensland Farmers Federation (QFF) believe that SunWater - which owns and manages around AUD$7 billion (US$7.5 billion) in water infrastructure assets and supplies 40% of Queensland's commercial water supply - had poor quality data and plans, contributing to the 12-month long delay of the pricing review, forcing farmer’s to cop the interim prices in the meantime.

QFF CEO Dan Galligan says there are grave concerns for irrigators leading up to the proposal's implementation.

"While this would be a massive impost on irrigators, it would also eventually have flow-on effects to processing operations further along the supply chain. This will be lead in the saddlebags for rural communities and regional economies.

Galligan strongly believes that the current proposal will be unsustainable for many farmers, with some facing up to a 50% price rise.

"For the longer term we need to find a pricing regime that is economically sustainable at the farm gate but also allows for irrigation schemes to invest in the modernization that builds efficiencies and drives down costs."

Local grower's view

Peter Hockings of Bundaberg Fruit and Vegetable Growers, is concerned about the impact the proposed prices will have on the Bundaberg region.

"What they have proposed, when and if they come into effect, will hit every single irrigator in the Bundaberg region quite significantly," he says.

Hockings outlines that Bundaberg and the Lower Mary have been identified as two regions in Queensland that will be heavily affected, facing price rises of 30% and 50% respectively.

"Both schemes are going to really hurt irrigators financially."

"It’s going to further reduce their gross margins for their commodities, which are already seeing some significant reductions through electricity price rises, they’ve already had some bad weather this last year.

"So it's just another notch in the belt of driving the agricultural industry into the ground."

Hockings explains the proposal will actually penalize efficient users, hurting growers in the very dry and very wet years as they will be charged a higher price per ML for water that they don’t have access to.

"The things that we would like to see reviewed further by the QCA (Queensland Competition Authority) is the efficiencies of the scheme operator [SunWater] and the fact that the irrigators, whether they’re horticultural or sugar cane producers, or any other growers that have access to irrigation water, we’d like to see that they are not the ones footing the bill for the entire operation of the scheme.

Hockings believes the proposal does not effectively take into account the wider implications of the price rise.

"There is no consideration whatsoever of the public benefit of being able to provide food and fiber for Australia’s communities."

Although this particular issue is leaving many Queenslanders bitter and resentful, Hockings strives to remain upbeat.

"There’s a lot of positive things happening in the industry as well, but unfortunately we’ve got a lot of these red tape legislation issues going on [which] are really hurting the producer."

SunWater's say

A SunWater spokesperson says the organization has been very transparent about its processes and is surprised at being labeled 'ineffient' by the QFF.

"We were surprised by the QFF’s statement claiming SunWater to be inefficient given their close involvement in the process to date has provided them full access to the independent auditors, whose reports show the complete opposite.

"SunWater willingly opened up its books to ensure the QCA’s price path review was of the highest integrity and we have actively supported and rigorously participated in the review process to assist the QCA in its endeavor to arrive at a fair and reasonable pricing determination for all water stakeholders.

"Our forecast costs indicate that 17 of our 22 river schemes should see no price rises at all, however 7 of the 8 channel systems will require some price rises due to increases in general unavoidable operating costs, not as a result of any operational inefficiency. Any increase required is expected to be capped at around AUD$2 (US$2.15) per megalitre per annum."

The spokesperson has no doubts that irrigators will come around to the proposed price hikes.

"We are confident that once irrigators have had the opportunity to see for themselves the auditors reports on our operational costs they will arrive at the same conclusion; that SunWater is operating prudently and efficiently."

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