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Murray-Darling Basin: obstacles to reform « Previous | |Next »
June 9, 2010

A more sustainable Murray-Darling Basin (reduced water allocations, greater environmental flows, better agricultural practices) has been on the agenda for several decades. The recent drought and climate change have made this more urgent, especially when the recent floods in Queensland will not reach the lower Murray.

There is not enough fresh water to keep the Lower Lakes artificially fresh any longer.


Many policy analysts were buoyed by the recent CoAG reforms which signalled a move to a more rational allocation of water resources and greater concern for the underlying requirements to maintain ecosystem health. The Commonwealth’s assumption of greater control over water policy has been justified on the grounds that a ‘national approach’ to the problems in the Murray-Darling Basin is required to resolve the ills of the Basin.

Reform is slow and difficult. The changes required are substantial--eg., the Wentworth Group estimates that irrigators will have to reduce the amount of water they take from the Murray-Darling by 30 per cent if the river is to return to an environmentally healthy state.

The Nationals and the National Farmers Federation oppose any attempt to favour the environment at the expense of the needs of rural communities and farmers. So do the state governments in practice, in spite of their often strong advocacy of the reform agenda. Their conception of reform states that increasing efficiency in agriculture can provide a solution to the water crisis in the Basin and result in ‘wins’ for all players. Water-use efficiency’ is portrayed as an environmental saviour and thus deserving of support from the public purse.

One of the major obstacles to a mire sustainable basin is is Victoria's attempts to keep as much of the River Murray water for its own irrigators in the Shepparton and central Goulburn foodbowl area and to take River Murray Water for Melbourne through its north south pipeline. This takes the form of a $2 billion food bowl modernisation of the rundown existing irrigation system--spun as a national building project by the Brumpy Government.

That means it is in the national interest akin to the Snowy Mountains scheme and the Commonwealth has agreed to fund 90 per cent of the project costs. Is it?

The "water-use efficiency" policy of the food bowl project is one designed to save water through public investment in new irrigation infrastructure (more subsidies) rather than reducing water allocations to irrigators and so shrink the irrigation system. It is a subsidy because the irrigators are only paying around $100 million of the $2 billion cost; a subsidy designed to prevent Victorian irrigation districts being forced to close down.

It is dubious policy because it is investing in infrastructure for farms that will eventually be rationalised; the claimed water savings from improved irrigation infrastructure are just not there; and what are deemed leakage actually seeps back to underground aquifers pumped by farmers and to the river. There is lot of mythology surrounding irrigation efficiency and increased productivity and in all probability we may well be left with a whole heap of irrigation infrastructure that will sit there like a giant white elephant.

What this shows is that state governments have generally resisted calls for national control of water resources, unless coupled with substantial financial incentives usually from the commonwealth. Decision-making at the state level also encourages excessive investment in local water-saving projects since this maintains the resource, and the benefits that accompany that resource, in a given jurisdiction.

In this decision making irrigators, have been, and still are, being put ahead of environmental needs.

| Posted by Gary Sauer-Thompson at 8:49 AM | | Comments (13)


Those of us who live in downstream states such as South Australia know in our bones that SA will be a significant loser as a result of upstream ‘renovation’ and 'modernization' of irrigation in Victoria. It has always been thus. All the talk about 'food security' is spin.It is a good deal for Victorian irrigators.

Why doesn't Melbourne increase its drinking water from stormwater recycling rather than taking it from the River Murray?

The Murray-Darling Basin Authority is preparing a draft plan for the basin, which is expected to outline cuts to irrigation allocations.

You can bet your last dollar that irrigators in the Murray and Murrumbidgee will receive smaller cuts to their water entitlements than what the Wentworth Report recommended last week---they recommended water cuts of 39 per cent in the Murray and 65 per cent in the Murrumbidgee. Irrigators were furious.

The Murray-Darling Basin Authority's latest estimate is that only 220 gigalitres from Queensland and New South Wales floodwaters have reached the lower lakes in South Australia.

Up to 620 gigalitres had been predicted to reach the lower end of the Murray.

Where has all the water gone? South Australian Greens MP Mark Parnell says too much has been taken out of the system for private storage.

Argggh!! I just wrote a long [and brilliant of course] comment and lost it.
Short version.

Please read the report.

The scientists propose a scheme [option 3] which will:
-give the river enough water to be healthy.
-give the irrigators lots of money [billions] and time [at least a 2 year special transition period] and enable most, the vast majority, with minimal decrease in production, to stay in the industry as efficient producers
-provide money and schemes that will cushion the minimal loss sustained to the local communities
-provide assured supply of urban/domestic/manufacturing
-at less money than is currently budgeted
-all within 3-4 years.

Its simple and would be easy IF there were not so many snouts in the trough oinking loudly.

Please read.

Peter, there are enormous losses on the floodplains above The Menindee lakes. The Paroo, on which there is negligable extraction if any, was supposed to put thousands of megalitres into the Darling, but last I heard pulled up short altogether. Of the 6000GL that supposedly crossed the Qld border only a few hundred are captured upstream of Menindee Lakes.
The merit of holding water in the Menindee Lakes is questionable, but to blame the lack of water on private extraction is pure BS.
If nothing else the situation demonstrates how small an impact Northern irrigators really have on the river Murray.

I can't see how farmers on the Murray/Murrumbidgee could be less than "furious" that they will lose up to 65% under the Wentworth plan. Especially if the W group suggest minimal compensation be paid.
How would the average person feel if they we're told their wage would be halved. Worse for farmers who tend to work on slim margins. No wage at all.

the core problem in the Murray Darling Basin is the overallocation of licences for irrigators by state governments. They took too much, and saw water for the environment as wasted--some still do. There is not enough water now, and there will be even less in the future. Less water= less irrigation.

Simple market economics---economics 101--- says that there will be a major rationalisation in the industry --many irrigators will be forced to walk from a declining industry. Its been happening thoughout this decade across the basin and the process will speed up. That means a different model of governing the basin to that of the past.

The old days of using the Menindee Lakes as a safety storage in its current form for NSW irrigators is long gone. The same can be said for the lower Lakes--Albert and Alexandrina. The water in the Menindee Lakes needs to be shared in a different way to the past.

re your comment:

I can't see how farmers on the Murray/Murrumbidgee could be less than "furious" that they will lose up to 65% under the Wentworth plan. Especially if the W group suggest minimal compensation be paid.

I don't understand this compensation for irrigators stuff. Sure the commonwealth should buy up the water and land if the irrigators want to sell, the price is right and the water can be returned to the river. That is the way the market works.

But compensation? The manufacturing or white goods industry don't get compensation when they decline, or go out of business. What is offered is an adjustment/retraining/transition package by state governments for workers so they have the skills to work in a new industry. The companies themselves are not given compensation by the government.

Why should the irrigation industry be treated any differently?

the Wentworth Group report has been dismissed as extreme and so it won't be read. They place healthy rivers above irrigator interests. Irrigator interests are no 1. This priority is set in stone handed down aeons ago. It cannot be questioned, even when the basin is drying out from climate change.

It is to the credit of the Wentworth group that they do question this type of governance; that they talk about the basin's ecosystems be placed at risk of collapse; and highlight how the Water for the Future program will deliver insufficient water to ensure healthy ecosystems.

It's the old story of capitalism isn't it--the irrigation industry privatizes the profits whilst the loses (a badly damaged environment) are socialized. Just like what happened with Wall Street and the banks. The justification for the agrarian socialism? --food security!

As David Horton points out in his Swings and Arrows post at his Watermelon blog:

Don’t know about you but if I was running an organisation charged with looking after the interest of farmers I would be trying to prepare them for the reality of the future climate of Australia, rather than lulling them into a false sense of security which might be a comfort in the short (very short) term, but in the longer term is going to make them wonder what hit them.

Even the Murray-Darling Basin Authority has accepted the ecological reality of a drier basin, that the irrigation system was designed for a much wetter climate, and that improved efficiencies and improved technologies will not be enough.

Substantial cuts to irrigation licences will need to be made to return over-allocated system to sustainability while combating the harmful effects of climate change and drought. The Authority has accepted that:

new sustainable diversion limits will be based on how much water we need to retain to preserve key environmental assets and key ecosystem functions. The limits will be based on how much water we need scientifically, not how much we traditionally extracted.

We are living through a period of fundamental change.

The irrigators profits do not include in part or in whole, the externalised costs of environmental damage these agribusinesses have failed to pay, and which the rest of society must carry.Their perspective, and that of the state governments, was marked by short termism (profit) not what would happen in the long run.

The costs of the consequence of failing to take future costs into account are going to mount as the chickens come home to roost. It is similar situation to what is happening to BP and the oil spill in the Gulf of Mexico.

From rojo:
"How would the average person feel if they we're told their wage would be halved."

Mildly to horribly shattered, I would imagine, particularly in the even worse situation where they lose their entire livelihood by getting sacked.
Such as that which happened to the car workers in SA a few years ago. They were given very minimal compo and years later some are still out of work and suffering stress.
Hundreds of them, probably in this one example more people losing their entire livelihood than all those irrigators who would suffer minimally when the industry is forced to become sustainable for its own longevity .
And many people, thousands upon thousands every year, lose their jobs through no fault of thir own without any compo at all. Happends every day, or didn;t you know that?

I come from a rural city where nearly 2,000 workers of one employer were notified one Friday afternoon that all jobs would disappear one week later.
The population of the town halved.
Think of the closure of the steel works in Newcastle, the cut backs in the civil service of tens of thousands of workers in the past and the same policy [essentially] announced recently by the current leader of the opposition.

I must say that the attitude that irrigators who have valuable disposable assetts and are given years of transition and to whom the Wentworth scheme directs billions of dollars in compo and assistance are somehow exempt, 'special' in some mysterious way, from the normal economic forces that face people in this country is well ....a little strange and even offensive.

The old much abused media phrase 'holding the country to ransom' springs to mind.

The Wentworth Group report was very coy as to what type of water regime should occur in the Lower Lakes as a result of their 40% and 65% cuts to irriagtors upstream.

One of the 3 goals of their report: "Manage the Coorong and Lower Lakes as a healthy
functioning river estuary;"

It's significant that they've put "Lower Lakes" and "estuary" in the same sentence.

Apologies for my absence - been busy planting wheat to feed the multitudes.

Firstly, Nan and fred I believe buybacks fulfil my definition of compensation. The govt purchases it's requirements directly or via water savings. That should in itself protect the remaining entitlements in terms of access and consequently value.
My point is if govt simply say you can only have 35% of your previous right, then that is out of the control of the owner and should be compensable. Just like when govt doesn't forsee the need for a road and compulsory aquires your house. Obviously that doesn't affect the risk the farmer faces that there may be no water available for allocation.

gary, there will be change. I think you are off track if you think irrigators are weilding any power, though authorities are indeed under pressure from irrigators to demonstate that decisions are based on science and not politics. It's a bit hard not to conclude we're in a drier climate during drought. The outcome should be more about equitable sharing than simple limitation.

You'll have to forgive us for wishing to retain our communities - they too being part of the environment.