Member presentation

John Pettigrew (Environmental Farmers Network spokesperson on water issues) prepared the following paper as background for the Voices for the Murray Darling Partnership when attending the MDBA forum in Sydney during the second week in October 2011

Social & economic impacts of the Murray Darling Basin Plan

A critique of perceived concerns of irrigators.

The Guide to the proposed  Basin Plan was released in October 2010, and based on scientific input identified a volume of between 3000 and 7600 GL required to be returned to the basin’s rivers for the environment.
Two scenarios were identified to be further progressed, they being volumes of 3000 and 4000 GL.

The release of the Guide to the Draft Basin Plan and the use of a ‘town hall” communication strategy provided fertile ground for those opposed to the return of water to the environment.  Irrigators in particular, concerned at the loss of up 30% of entitlements reacted strongly, culminating with the burning of the Guide at a public meeting in Griffith.
Much of this reaction resembled mass hysteria, fueled by politics, half-truths and lack of understanding of water procurement processes proposed.
Since the Guides release, campaigns from well organized and financed organizations appear to have been effective with a “compromise” volume of 2800GL being canvassed by the MDBA.

This paper assesses the claimed and perceived impacts on irrigators and the productive capacity of the Murray Darling Basin based on returning approximately 4000 GL of environmental flows.

Water reforms
In the 1980’s a change in focus from the continued development of new resources to the more efficient management and use of existing resources took place.
As a result a wide-ranging program of institutional and legislative reform was implemented in the late 1980s to ensure that water is managed effectively and used efficiently and that appropriate protection is given to environmental values.
This program of reform has continued in the context of the national water reform agenda adopted by the Council of Australian Governments in 1994, which was subsequently included in the National Competition Principles Agreement in 1995.
The programs and policies that have been implemented as part of the water reform agenda are providing a foundation for the sustainable and efficient management and use of resources. These reforms have led to significant movement of water into higher-valued uses by introducing strong incentives for efficiencies in water distribution and use, which are driving major upgrading of on-farm and water authority infrastructure.
The environment was recognized as having a valid right to water.
The 2007 Water Act, The Murray Darling Basin Authority and Basin Plan are all components of assessing sustainable water diversion levels and proposing processes for the return of over allocated water to maintain a healthy working system into the future.

Irrigator and farmer organizations both State and National representing the irrigation industry have claimed the loss of water to the environment will result in hardship for individual irrigators, a loss of production throughout the basin, a loss of jobs both on-farm and in manufacturing industries and economic impacts on towns and country communities. 
These concerns together with food security for a growing population, the hardships of past drought and market conditions were put forward as evidence in arguing for minimizing water volumes for the environment.

To judge the validity of these claims there is a need to understand the benefits available to irrigators following water reforms and other measures over the last 20 years in the Victorian water industry.

The separation of land and water instantly realized locked up capital value of water entitlements and created valuable management flexibility for irrigation entitlement holders.

The water market both temporary and permanent allowed individuals and industries to adapt new management models ensuring growing regional productivity.
Water trading has also allowed the opportune production at short notice, of crops based on commodity prices and has been instrumental in the transfer of water to highest value returning production, a win for the irrigator and the Nation.

Carry-over of allocation.
 This recently adopted reform ends irrigators need to “use or lose” annual allocations prior the year end. This ability allows an irrigator or an industry to maintain a level of water security that best suits the needs of their management models or the particular commodity produced.

Reserve policy change
Water security increases that ensure a more reliable early allocation to irrigators.
This policy compliments the carry-over policy and allows more flexibility in the management of early irrigation.

Delivery infrastructure upgrades
 The modernizing of ageing delivery infrastructure by State and Federal Governments to secure water savings is providing irrigators a highly increased level of service.
Water on demand and increased flow rates are all required to service modern irrigation technologies and managements models.

On-farm irrigation efficiency programs (water saving programs)
These programs provide financial assistance and are allowing irrigators the advantage of up-gradeing delivery services and utilizing water efficient technologies on-farm.
These programs effectively maintain or enhance current farm production outputs using much less water.

Government water buybacks
Water is now a valuable tradable asset and any reduction in consumptive entitlements could be expected to increase the value of entitlements remaining in the ownership of irrigators.  

Conclusion
Irrigator gains over the past 20 years have and will continue to exceed any likely productive impacts arising from the Basin Plan.

It is also important to understand that no irrigator will lose water entitlement unless they agree to sell or take part in water savings programs.

The four decades prior to the past drought saw the $ value of irrigation production in Victoria doubled every decade. This was prior to most water reforms being enacted.

Many of the productive gains flowing from past reforms and current upgrades are yet to be achieved by the irrigation industry. Productivity will continue to increase.

The fears of job losses, impacts on industry and economic hardship caused by reduced consumptive water entitlements are without foundation and not fuelled by reality, history or lessons learnt from the past drought.

With many world countries experiencing diminishing water supplies and a loss of soil fertility, irrigation industries of the Murray Darling Basin are very well placed to supply a growing world population.

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