November 10th 2007

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Articles from this issue:

COVER STORY: Farmers' protest in Canberra over national water plan

EDITORIAL: Howard and Rudd - the Coke vs. Pepsi election?

RURAL CRISIS: Crocodile tears and hand-wringing over drought

CANBERRA OBSERVED: Why voters have turned on John Howard

INTERNATIONAL TRADE: China's aggressive trade strategy pays off

FOREIGN INVESTMENT: Risk for Australia in dependence on China

PUBLIC AFFAIRS: Overdue steps to ensure open government

STRAWS IN THE WIND: Victoria's hospital fiasco / Shooting fish in a barrel / Misreading America

POLITICAL IDEOLOGIES: How family-friendly is the free market?

DRUGS POLICY: Illicit drugs and the federal election

REPRODUCTIVE HEALTH: Exposing the abortion-breast cancer link

OPINION: A Rudd election win will be a disaster

OBITUARY: A Labor Party statesman remembered - Hon. Kim Edward Beazley Snr. AO (1917-2007)

AS THE WORLD TURNS: Christian foster-parents face deregistration / Marital status and poverty - study

BOOKS: CREATORS: From Chaucer to Walt Disney, by Paul Johnson

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COVER STORY: Farmers' protest in Canberra over national water plan


News Weekly, November 10, 2007

The Federal Government's misguided water plan could wipe $28 billion off the Australian economy.

Recently, over 400 farmers protested in Canberra over the federal water plan, which could wipe $28 billion off the Murray-Darling Basin's economy following the drought.

"The plan is set to induce a man-made disaster across the Basin, which will force up food prices long into the future," warned Ken Trewin, chairman of the Murray-Darling Basin Water Crisis Management Council (MDBWCMC).

"The Federal Government has announced billions in drought relief. What is the point of drought relief to help farmers take up to seven years to re-establish permanent plantings, if the next government proceeds to take approximately 3,500,000 megalitres out of irrigation production to extinguish water licences and for environmental flows? This amounts to 29 per cent of all the irrigation water in the Basin.

"Taking this water out of production will wipe $28 billion off agriculture and associated industries, or 2.9 per cent off the economy. One megalitre of water produces on average about $2,000 at the farm gate, and then is worth about four times that value to downstream processing and agricultural supply industries.

"These huge losses will cause water shortages, force up the price of irrigation water, cut food production and increase food prices to Australian families," said Mr Trewin.

Urgent solutions canvassed

The occasion also saw the launch of a colour brochure on the water issue, produced jointly by the National Civic Council, the Crisis Management Council and the Growers' Action Group Inc.

The brochure, which analyses the water crisis and outlines urgent solutions, is available at News Weekly's web site:

It points out that the developing crisis started with the National Water Initiative (NWI), which separated farmers' water entitlements from land title. In the 10-year run up to the 2004 NWI agreement, farmers were told that the plan was to allow water to be traded from low to high-value agriculture. In reality, it allowed water to be permanently traded to cities and towns, other farmers and other industries; and to be purchased by corporate water-traders (water barons) and by governments for environmental flows.

Water-trading has allowed the Federal Government to propose taking around 29 per cent of the Basin's irrigation water.

It is also allowing cities to buy water from farmers. In fact, this was explicitly advocated in a submission from the Prime Minister's own Science, Engineering and Innovation Council to the Productivity Commission - which the commission included in its 2005 recommendations (see Recommendation 8.7, p.209).

The submission said that the new national water-trading market "opens up the opportunity … for the city to purchase irrigation water from willing sellers. It is probably the cheapest source of new water for several cities, and it is already taking place to some extent." (Review of National Competition Policy Reforms, Productivity Commission Inquiry Report, No. 33, February 2005, p.206).

Further, the federal Water Minister, Mr Malcolm Turnbull, in a feature article he wrote for The Australian (October 2, 2006) on the national water shortages, said that "among the six major options for our big cities" is "buying water from irrigators", and that this was already "proceeding in Adelaide and Perth".

Now it is proceeding on a much larger scale, with pipelines from the Goulburn Valley to Bendigo and Ballarat, and soon another direct to Melbourne, with the blessing of Mr Turnbull, the National Water Initiative and the PM's National Water Plan, and with the support of the Federal Opposition.

As part of the solution, the water crisis brochure calls for: a moratorium on permanent water-trade out of irrigation regions; preservation of irrigators' entitlements to water; emergency assistance to farmers; and an immediate and comprehensive consultation between governments, irrigation groups and farmers to solve the array of water issues across the Basin.

Issues not grasped

Mr Trewin concluded: "Over the past 12 months we have been to Canberra several times to try and explain the consequences of open, permanent water-trading out of irrigation regions, and of taking water for cities, huge environmental flows and to extinguish water licences. However, neither the politicians nor their advisors have grasped the complex issues involved.

"Instead, they have bought the national competition line that permanent water-trading is the cheapest way to supply the cities using irrigation water, and the extreme environmentalists' line that vast amounts of water are needed for environmental flows, all at the expense of farmers and consumers."

- Patrick J. Byrne is national vice-president of the National Civic Council.

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