September 21st 2019


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COVER STORY Federal Government should abolish Renewable Energy Certificates

ENERGY BP annual Review shows consumption, production up

CANBERRA OBSERVED NSW Labor caught in Panda's paws doing 'whatever it takes'

RELIGIOUS FREEDOM Religious discrimination bill: A litany of questions

FOREIGN AFFAIRS Boris' brinkmanship shakes up Britain, EU

WATER POLICY Angry farmers protest over Murray-Darling Basin Plan ... again

TECHNOLOGY Are we the dumbest devices in the room?

HISTORY AND POLITICS Lord Acton, nationalism and multiculturalism, Part 2

LITERATURE D.H. Lawrence: The Modernist in exile

MUSIC Dialectical transcendence

CINEMA The Farewell: Elegant and bittersweet

BOOK REVIEW Owning up to market imperfections

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WATER POLICY
Angry farmers protest over Murray-Darling Basin Plan ... again


by Patrick J. Byrne

News Weekly, September 21, 2019

Around 1,500 angry farmers have called for a pause to the Murray-Darling Basin Management Plan, while others have accused non-farmer water investment companies (water barons) of holding back water from sale in the middle of today’s severe drought to spike the water price.

In early September, the protesting farmers held a “sit in” on the bridge at Tocumwal across the Murray River.

Languishing on zero water allocations, farmers in the NSW Murray region are frustrated that the river has been running high all year, taking water past their properties for environmental flows down the river, while they have no water to grow crops.

Furious at the Federal Coalition for its refusal to acknowledge the Murray-Darling Basin Plan has been a failure, an effigy of Federal Water Minister David Littleproud was thrown from the bridge.

The $13 billion Murray-Darling Basin Management Plan was initiated by Malcolm Turnbull when he was Minister for the Environment and Water in the latter years of the Howard Coalition government, and was finally implemented by the Gillard Labor government in 2012, when the Plan was written into federal law.

The Murray-Darling catchmenet area.

Its major component was the buyback of about 30 to 40 per cent of all irrigation water in the Basin for reallocation to environmental flows.

The consequences have been dire for farming communities. A rally organiser, Darcy Hare, told Macquarie Radio: “We’ve seen as much as 76 per cent irrigated agriculture job losses.”

He said that while dry-land areas, which do not depend on irrigation, bounced back after the Millennium Drought, the irrigation areas “never recovered, we had our productive capacity taken away”.

He said the irrigation districts are calling for the Basin Plan to be paused so producers can check stock, and to update the science behind the Plan; and they accuse politicians of ignoring the dire state of these regions.

Making and breaking the food bowl

After World War II, the Murray-Darling Basin was developed as Australia’s inland food bowl using water from major dams like Hume, Dartmouth and others in the Snowy Mountains to hold water in high rainfall years and to be released down the Murray and other river systems where it can be diverted into thousands of kilometres of irrigation channels to farmers.

This managed system provided water for a wide variety of crops and pastures on fertile soils in an otherwise arid- to-desert region. It provided a reliable water supply that mitigated the risk to agriculture in a region that was otherwise unpredictable and difficult to farm because there could be huge rainfall at one time followed by years of low rain and drought.

When this complex system was put in place, the agreement between governments was that half the water in the Basin’s storages would be for environmental flows and half would be for irrigation, towns and industry. Given the Basin’s climate, this meant that water from good rainfall years could supply irrigation farmers in a five to seven year drought.

However, the arrangement was fundamentally changed when the Millennial Drought of 2001–09 spooked federal and state politicians into believing that, as one federal MP said to me, “it would never rain again in the Basin and that the Murray River was dying”.

In reality, the Basin’s rivers are highly variable and naturally experience boom and bust periods as the climate varies between drought and flooding rains.

By the time the biggest wet in recorded Basin history happened in 2010, the die had been cast for a new Plan to change the water-sharing agreement such that around 30 to 40 per cent of the irrigation water previously allocated to farmers would be bought back by governments to be prioritised for the environment. This became the major focus of the bipartisan, $13 billion Basin Management Plan.

Today under this new arrangement, the huge water storages can only reliably supply water from the good years of rain to farmers for two to three years in a drought. In other words, the risks of farming have increased dramatically.

Further, the Basin Plan allowed anyone to buy up irrigation water. It allowed companies that are not involved in farming to buy water and then trade the water to farmers, making handsome profits for non-farm investors, particularly in drought years.

In 2006, I and several farmers published the book, High and Dry: How Free Trade in Water Will Cripple Australian Agriculture. We warned that open water markets would allow “water barons” to buy water and “manipulate the water supply in a tight market, pushing prices to very high levels, particularly in times of drought”.

We pointed to a comparable situation in the 2001–02 Californian electricity crisis, when private traders controlling only 6–8 per cent of the market could massively spike the price of electricity by shorting the market. Interestingly, California does not allow non-farmers to trade water.

Water barons

At the same time that farmers were angrily protesting in Tocumwal, representatives of about a dozen horticultural industries sent a letter to Water Resources Minister Littleproud claiming that the non-farm water investors, or water barons, were causing great hardship for farmers by holding back water from the market to spike water prices.

They said that this “squeeze” had pushed the price of irrigation water from a long-term average of about $135 to $800 a megalitre.

Darren Minter, who farms citrus, almonds and asparagus near Mildura, told The Australian that he would lose money this year, and next year may have to cut off water to his almond trees and not grow asparagus, resulting in no work for 150 employees. “We want action today because, if we keep going this way, it’s going to drive a lot of farmers bust,” Mr Minter said. “Water barons who own water, who don’t own land, should be stopped immediately.”

An overhaul of the Murray-Darling Basin Plan is long overdue. However, there are major political obstacles. The Plan was written into federal law and there is no political will to change the federal water act; farmers are up against a strong and vocal environmental lobby; and any change in water-sharing arrangements risks vital Coalition seats in South Australia.

Another Basin inquiry may help some farmers. However, the rural discontent that saw the Shooters, Farmers and Fishers take seats at the last NSW election points to a hard reality – solutions to the Basin’s woes are unlikely to be found in appeals to science and to a sensible understanding of the river and land in the nation’s food bowl, but in farmers getting politically organised.

Patrick J Byrne is national president of the National Civic Council and co-author of High and Dry: How Free Trade in Water Will Cripple Australian Agriculture (2006).




























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