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Murray Darling-Basin: blocking water reform « Previous | |Next »
December 12, 2009

Sooner, rather than latter, the flows in the chopped up River Murray will become less and less. The river, in its climate-change-driven decline, will strangle many of the irrigation projects in the arid landscape around it, as there is not enough water to support the heavily subsidised agribusinesses.

The junk science of the industry --the rain will follow the plough!--and that of their state government boosters who based their projections on what we now know was the unusually wet 20th century will become ideological relics of cultural history as many of the towns along the river become ruins. Aridity will kill off much of the agriculture whilst the water to sustain the towns is already vanishing. The waters are insufficient for this kind of desert civilisation.

The way chosen by CoAG to adjust to this new arid reality is the market in the form of water trading, which is designed to facilitate water being traded to its highest value use. These market instruments are opposed by Victoria, who has imposed a 4% cap trading cap on permanent water rights in any irrigation district in its state. Only 4% can be sold in a financial year, and this is to remain in place until at least 2014.Victoria is anti-reform.

Consequently, South Australia has launched a High Court action to force the Victorian government to lift the cap on water trading along the River Murray on the grounds that it is unconstitutional imposition on trade and is therefore invalid.

Vicotria is anti-reform because in cap is done is designed to protect the vulnerable, drought-stricken communities from being destroyed by huge volumes of water being traded out of their area. As irrigated areas shrink, northern Victoria becomes even more important as the state's food production centre. The Victorian state government has no inclination to buy back water entitlements from its irrigators. Such purchases are left to the Commonwealth, and so there is no fundamental change in the Victorian allocations regime, despite the widespread recognition that some of the Basin’s water resources need to be redirected to the environment.

The Victorian approach is to obtain water for the environment is by subsidising the cost of upgrading infrastructure in its food bowl region by reducing losses to leakage and evaporation in exchange for the rights to some of the water ‘saved’. This is designed to ease irrigators’ transition to lower levels of water availability; to recover water for the environment; and to protect viable irrigation communities by ‘securing’ a long-term future.

The Productivity Commission says that it has examined the experience of Australian programs for recovering water through subsidising infrastructure and concluded that they tend to be slow, cumbersome, and generally much less cost effective and efficient than buybacks.

For example, the buyback has obtained high reliability entitlements in Victoria for approximately $2400 per megalitre (ML). In comparison, an investment of $1 billion planned for the Stage Two Food Bowl project in Victoria is expected to yield water for the environment at a cost of up to $10 000 per ML. Subsidising irrigation infrastructure projects that benefit private irrigators is a poor use of taxpayer funds, relative to buybacks, and is inconsistent with the cost recovery principles agreed to by governments under the NWI. It can also impede rather than facilitate structural adjustment, and it is inequitable for those who have
already made such investments privately at full cost.

This infrastructure modernisation is not about achieving a permanent reallocation of available water to the environment. It is about subsidising and protecting the state's irrigation industry in an era of climate change at the expense of South Australia.

| Posted by Gary Sauer-Thompson at 3:55 PM | | Comments (6)


Thanks for pointing out that Victoria doesn't want water trading to destroy the remnants of its food bowl. Its very attractive for irrigation block fruit growers to sell their water to Timbercorp and Great Southern Plantations but the net effect is that the remainder of 'blockies' pay more for their irrigation infrastructure and, more importantly, Australia now imports foods we used to grow like stone fruit, canned stone fruit, dairy.
42% of Australia's food is grown in the Murray Darling Basin.
Historically Victoria established irrigation colonies in the 1890s to grow grapes, orchards for stone fruit. The blocks are too small for modern agriculture. Victoria's dairy farms are on irrigated Murray pasture.
NSW has massive irrigation farms developed from the 1930s for rice, grapes, citrus

Discussion of the future of the Murray Darling Basin needs to consider future population levels, whether Australia will have a food production policy, as well as whether Australia wants an environmental policy and what the future of South Australia is.
I can't see that discussion happening so I see the basin sliding inexorably toward desertification.

"42% of Australia's food is grown in the Murray Darling Basin."

Ah but is it grown using irrigation water?

Or does the 'food bowl' and the irrigation areas merely occupy the same habitat but different niches?

Or to put it another way, how much of Australia's food [excluding that which is exported] is produced BY IRRIGATION, in the Murray Darling basin?
Cos that's not the same figure as the one you have quoted.

And that is before we get on to consider [subsidized] costs.

at a time of water scarcity we have plans to save the River Murray from ecological destruction wrought by capitalist expansion by ever more expansion. This is to be done by bringing the efficiency of the market to bear on nature and its reproduction.

yep we have a “trickle-down ecology.” We are told that, by allowing unrestrained accumulation, the environment will be improved through ever-greater efficiency in irrigation.

Sounds suss doesn't it.

Encapsulated in the last comment which sums up the previous, is that the ubiquitous Canute-ish massage that social democracy, captured by neoliberalism, will abandon, for no better than reinforcement of a delusionist policy, something REAL, that doesn't dove tail nicely with the theories predictions and projections of their dogma.
The issue is supposed to be efficient apportionment of scarce resources, for anyone with half a brain. But for neolibs this is peripheral to more marketisation, no matter how inefficient and dislocated from reality.

Fred I understand that 42% of food consumed by Australians, when the population was about 18 million people, referred to food grown in irrigated areas of the lower Murray Darling basin i.e. dairy, orchard fruit, vine fruit, feedlot beef, pigs.
Most of our export crops are grain, some of which is grown in irrigation areas, but it is expected that as our population increases Australia will no longer be an agricultural produce exporter.

Australia's largest exports
1. coal
2. mining
3. tertiary education
4. race horses
5. grain (wheat for Iraqi oil leases)

John Elliott was so annoyed that he was blocked from Griffith water for his rice crop he is a keen proponent of water trading. The Griffith rice growers were frightened he would build such a big farm he would control the market and the existing farmers would be reduced to being price takers.

"Victoria is well recognised as the food bowl of Australia, particularly Victoria’s
northern irrigation region. Irrigated agriculture generates $9 billion in production
annually and $1.53 billion in exports"

Compare that with the $1.2 billion dollars a year to be spent by Govt over 10 years on the MDB, and it's hard to come to the conclusion that water savings are uneconomic. At the very least expenditure on the MDB being covered by taxes paid by irrigated agricultural activity.

I wasn't aware that the food bowl project was anything other than a political sweetner to offset Melbournes requirement for more water. The project was estimated to cost 2 billion for 450GL in savings. Less than $5000/ML. It is misleading to pretend the savings were focused on the environment in the first place.