August 9th 2003

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Articles from this issue:

COVER STORY: IVF - 25 years on

EDITORIAL: America, Iraq and ... Australia

CANBERRA OBSERVED: National Party and the Anderson legacy

COMMENT: Courts turn children into commodities

STRAWS IN THE WIND: Wisdom of Solomons / Do as I say and not as I do / A touching story

SOUTH AUSTRALIA: Water restructure will destroy Murray communities

ENVIRONMENT: Will the Federal ethanol package work?

What a US free trade deal means for Australian media

DEMOGRAPHICS: Russia's population implosion a warning to Europe

ECONOMICS: US-Australia free trade negotiations based on dubious assessments

ASIA: North Korean time bomb still ticking

BOOKS: MARIE ANTOINETTE: The Journey, By Antonia Fraser

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Water restructure will destroy Murray communities

by Paul Russell

News Weekly, August 9, 2003
Millions of dollars of public funds are being spent in dredging the mouth of the Murray River in a concerted effort to protect the health of the Coorong - a pristine section of waterway that runs parallel to the seaboard from near Victor Harbour for 80 kilometres or more to the South East.

The Coorong is unique. It sustains an array of bird life, providing nesting grounds and food sources and is also a breeding ground for many fish species. But would the closure of the Coorong's connection to the sea have preempted an ecological disaster?

There is evidence, both in our history since European settlement and in land surveys, that the mouth has been completely closed at least half a dozen times.

Incomplete picture

Australian history buffs will recall that at the end of his epic trip, Charles Sturt found the mouth closed. Like the greenhouse issue, the science concerning the health of this region is incomplete - the real ecological effect of closure, inconclusive.

Yet most would believe the $4.1 million of Federal and State funds, which will have been expended on this project by years' end, was well spent. SA Minister for the Environment, Conservation and the River Murray, John Hill, admits that this operation is a band-aid measure, acknowledging that increased environmental flows throughout the Murray system are the real answer.

The word conservation in modern usage conjures up images of land and water care and rehabilitation. The River Murray Water Allocation Plan, adopted by the South Australian State Government in July 2002, certainly fits within this understanding. Yet its assumptions and implementation (more correctly: lack of implementation) seem to ignore almost totally other vital areas of conservation: food production, jobs and families.

Irrigators, particularly dairy farmers in the Lower Murray Irrigation Area, are extremely upset at what they see as a "triple whammy" of blows to their viability and future, which could see up to 80% of them cease production within the year. A number have already given up the fight.

On top of record prices for feed, the two major milk processors announced recently a drop in the farm gate price for milk of at least 3 cents per litre, with the possibility of more to come.

Further, the new water restriction regime recently introduced by an Act of Parliament seems to single out irrigators below Mannum for "special treatment".

Most if not all irrigators in this area have never had formal water licences. Whereas other irrigators have had their allocations reduced by 35%, the Lower Murray region has had their extractions reduced by 20%. Responsible irrigators elsewhere who have not been using their full allocations may well experience only minor water losses, whereas those in the Lower Murray will lose 20% of current use, regardless of whether or not their previous practices were sound. Effectively, the Government is rewarding bad practice!

In what can only be described as a bureaucratic oversight, the Act and its implementation make no reference to what are known as "sleeper licences", that is, licences already in existence in other areas that have not been utilised in recent years.

With the reduction in allocations and extractions, owners of these dormant water licences may well seize upon the opportunity to lease their water to other parties. This could conceivably increase the total water out-take in spite of the restrictions.

Major losses

The Lower Murray dairy industry is one of the most productive dairy regions in Australia. With the pending dairy crisis in Western Australia, where up to 50% of farmers could cease operation this year, production from this region of South Australia is critical for the domestic Australian market.

Yet the restructuring and rehabilitation plan for this region, in the words of many in the local industry, seems to suggest that dairy farmers and their farming practices are the main cause of both salt and nutrient run off and that their continued presence along the river is barely tolerable.

No one questions the need for a rehabilitation plan. Some water gates in use in the region date back to the First World War. Pumping stations - owned mostly by the Government - are in various states of disrepair from poor management, in spite of all irrigators having paid a levy for maintenance and renewal of the infrastructure for decades.

The plan looks to a retirement of 20% of the irrigation area and the creation of a rehabilitation plan for those remaining in the industry. Following a round of consultations and public meetings over the early part of this year, those farmers who have decided to continue have been asked to undertake a Farm Business Plan.

To date, only 25 of a total of 128 farmers have applied, a fact that is taken by many to reflect the confusion and uncertainty within the community.

No indication has been given as to what criteria will be applied to the eventual (and now overdue) allocation of water licences. Farmers are reluctant to comment publicly because of a widely held belief that to do so would prejudice their chances. Once the licences are in place, each farmer will have to contribute 50% of rehabilitation costs whereas farmers in other irrigation districts were required to meet only 20% of costs.

This impost has the local bank branches extremely nervous. They risk over exposure on property where licences are not granted and a heavy commitment to additional debt for rehabilitation when farm income is at an all time low in real terms.

Uncertainty growing

It is no wonder then that many farmers, faced with diminishing returns, uncertainty about licences and an increase in debt financing, are on suicide watch. Yet the process drags on with no resolution in sight. Regional meetings now resemble therapy groups with many grown men openly weeping.

Like circling vultures waiting for their prey to die, water traders are appearing on the scene, ready to buy up land holdings from nervous farmers. Water licences, when they appear, will not be tied to the land (except for a minor environmental component) and will be able to be traded up and down the river (and off-river) with some minor restrictions.

In some cases, consortia of cotton growers interstate are buying up land holdings with the intention of moving the licences upstream to their own operations when they become available. Others, known as Water Barons, simply want to buy licences up in the belief that, in the short term, water will be a valuable commodity from which they can gain significant profit with little or no effort.

What, then, happens to the farmland once the water is removed? Normal irrigation practices serve to leach the salt from the soil - particularly in the lower swamp reclaimed areas - a practice that, if managed properly, keeps the salt content under control.

Many farmers believe that without proper management, non-productive land will see the salt content steadily rise - an unfavourable outcome that is not addressed anywhere in the management plans. This will eventually affect adjacent working dairies and some have admitted that to manage this they may have to purchase neighbouring property.

The South Australian Government recently passed legislation for the collection of a water levy from householders and other water users. This will raise $79 million over three years which will be split 50/50 to restore environmental flows and for specific projects such as wetlands and salt interception.

No further money is allocated to meet the expenses of the lower Murray irrigators in the rehabilitation and maintenance of their farms yet there is no way, given that milk prices are set by a market controlled by the major supermarket chains, that farmers can recover their costs from the end user.

Surely, it is only reasonable that the "user-pays" principle applies - if the cost of production is not reflected in the market price, then any hope of maintaining an industry that supplies both local and interstate markets may be lost forever to overseas interests.

In an interview on ABC Rural radio's SA Country Hour in July, CEO of the Murraylands Regional Development Board, David Altmann, said that the area created "farm gate milk production of about $36 million with a flow-on effect of another $100 million worth of dairy products to the state and regional economy - and then a further flow-on effect of another $108 million through other jobs and investment in the region. We're talking about 1,300 jobs that are linked to the local dairy industry representing about 10 per cent of all the jobs in the Murraylands."

Bleak outlook

The outlook for the entire Murraylands region, regardless of whether the drought breaks or continues, is bleak indeed. Already one major engineering firm in Murray Bridge has ceased its operation. The local meat works will reopen soon and has already bookings for the slaughter of over 20,000 dairy cows.

Even if the industry is given a lifeline by a bureaucratic change of heart, 20,000 less in the herds means a significant loss of production and less breeding stock. Regional newspapers have covered the issues thoroughly, yet the Adelaide media outlets have been silent - likewise, the Minister.

Saving the Murray has long been an issue - the drought crisis has merely served to bring the matter to a head. What is disappointing, at least from a South Australian perspective, is that the Labor Government has adopted a blinkered approach to the problem, forging ahead with restructure while entire communities and a crucial industry are left to pick up the pieces and wonder legitimately, why them?

  • Paul Russell is SA State President of the NCC

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