RURAL AFFAIRS: News Weekly
Farmers protest as water crisis deepens
, October 13, 2007
Some 800 farmers from the Murray-Darling Basin protested recently over government failure to consult them over water policy.As Australia's drought reaches proportions not seen since Federation, 800 angry irrigators met in the Victorian town of Mildura on the Murray to call for assistance and to protest over policies that threaten the future of irrigation farming.
The irrigators came from Victoria, NSW and South Australia to plead for assistance that will be vital to their survival. However, they pointed out that such assistance will prove fruitless if the Federal Government proceeds with its plan to take 29 per cent of the Murray-Darling Basin's irrigation water out of production, and if governments continue to provide huge tax breaks for managed investment schemes (MIS), which are destroying market-driven, family farms.
Most of the nine resolutions were passed unanimously, with only a handful of no votes on a couple of resolutions.Maintain farms
The meeting called on the Federal Government to commit to assisting local councils so that they could waive all charges for water and council rates from farmers, and to provide low-interest loans and grants for existing farmers to re-establish their irrigated farms after the drought has passed.
The farmers called for an end to MIS, either directly or by placing a ban on the opening up of new land not previously irrigated. MIS have created ongoing distortions in the commodity and water markets.
MIS are large corporate farms that have been created by taking advantage of large tax concessions to wealthy city investors. These corporations borrow up to six times the capital cost of establishing these farms, giving them funds to buy irrigation water, which in turn forces up the price of water in a drought crisis.
In a normal drought sequence, the cost of buying temporary water (traded for one season) used to be $250-300 per megalitre. In this drought, MIS have bid up the price of water to around $1,000 per megalitre.
MIS are leading to over-investment in a range of rural industries, causing over-production and low prices that force genuine farmers out of business. Most MIS take many years to make a profit. Investors usually just want the up-front investment tax break, leaving the MIS company holding valuable land and water titles after about 15 years.
Addressing the meeting, Ken Trewin, mayor of the Walkool Shire and head of the Murray-Darling Basin Water Crisis Management Council, said the farmers needed to become as militant as the French farmers to push their demands up to Canberra and the state governments.
NCC vice-president, Patrick Byrne, told the audience that it was pointless bailing out drought-stricken farmers if the Federal Government went ahead with its plans to take around 29 per cent of all irrigation water for environmental flows and to extinguish irrigation licences. This would destroy a third of the Basin's agriculture, and the competition for water would so force up prices that probably many more farmers would be forced out of business. This loss of agriculture would push up food prices and threaten $28 billion, or 3 per cent, of Australia's GDP.
Farmers cheered the proposal to protest in Canberra, demanding an immediate three-year moratorium on permanent water-trading out of irrigation districts before the loss of water permanently damaged the agricultural economy.
It is only because the federal and state governments have detached permanent water-rights from land title that MIS, towns, water-traders and the federal and state governments can now purchase permanent water. Permanent water-trade has been driven by governments under the National Water Initiative and National Competition Policy.
Another resolution called for a weir to be built immediately at Wellington on the Murray in SA, with pipes to supply farmers and towns down stream. The weir is needed to hold water back in the river and in the upper Snowy Mountain's storages.
Over one million megalitres, the equivalent of about 8 per cent of the irrigation water in the Basin, evaporates in the lower lakes at the mouth of the Murray in the course of supplying water for Adelaide. These are the biggest single losses in the system.
Farmers also called on the federal and state governments to immediately commence building new dams and water storages for securing future supplies of water to cities and farmers.
The meeting expressed disgust at the lack of consultation with farmers across the Basin over water policy.
It strongly supported "the demands by the Murray-Darling Water Crisis Management Council, for an immediate public consultation process in NSW, Victoria and South Australia, to cover all aspects of the National Water Initiative (NWI) and National Water Plan and the water impacts of the drought".
The meeting demanded that "the extensive consultation process be presented to a ministerial meeting, at which key user-groups from each irrigation area and region of all three States are to be represented".