Ministerial Council agrees on socioeconomic criteria to avoid further hardship
Anyone interested in the details (and there's a lot of detail!) from the Basin ministerial council on Friday 14 December can read the communique here, which has a link to the strengthened socio-economic impact criteria for the 450 GL upwater. The bottom line? The 450 GL is now explicitly conditional on no third-party or water market impacts. The criteria run to 4 pages, and are nothing if not comprehensive. Big thanks to the ministers for making sure this time there was little if any room for creative departmental interpretation.
What happens if the full 450 GL hasn't been recovered by 2024? Nothing. Despite some in DAWR and the MDBA making it sound like the 450GL is mandatory, it can't be when participation is and always has been voluntary. Legally, the Plan only requires that enough of the 450GL is recovered to meet key indicators. The ministers say that's 62GL, and it'll likely come from off-farm. Any more is a bonus.
Merry Christmas everyone, and thanks so much for your support and engagement over what's been a tense and difficult year, and remains so with the drought conditions. A special shout-out to Speak-Up which did such a great job bringing the country to the city last Friday, so communities could speak for themselves on what matters to them.
It is disappointing that regional communities keep having to do the work of Government, but we couldn't wait any longer for the promised socioeconomic test for the 450 GL 'upwater', much less them consult on it.
So here is the simple, robust test we expect to see when Basin Ministers meet in December:
• The 450 GL ‘upwater’ program must first undergo an independent, comprehensive and transparent Cost-Benefit Analysis. It must not be implemented if it does not pass.
• Further, these questions must be asked of all ‘upwater’ projects and proposals:
1. Will this recover more water from the consumptive pool?
2. Will this increase water prices, or create other distortions in water markets?
3. Will individual projects collectively result in adverse third-party impacts on other water users, enterprises and the broader community?
4. Will individual projects collectively result in adverse third-party impacts by transferring costs to the irrigated production supply chain?
• If any of the above can be answered as a ‘yes’, the project or proposal will have failed, and must be struck out or redesigned for re-evaluation
Community Economy Environment
The Goulburn Murray Irrigation District (GMID) in northern Victoria covers 27,000 km2, stretching from Cobram in the east to Cohuna in the west. It is Victoria's foodbowl, generating $5.9 billion worth of dairy, fruit, vegetables, meat and cereals. One in three jobs are on farms, farm services and food processing. Almost all GMID irrigators are family farmers.
About 1772 GL of water has been recovered for the environment in the southern Basin, including more than 1100 GL from irrigators. The GMID is the largest contributor: 340 GL: 31% of the 1100 GL, and more than 20% of the GMID's water.
While we are pleased to see this water being used to good effect with promising early signs of environmental recovery, it comes at a price. Reduced production is costing the GMID economy $550 million a year, and an estimated 1000 jobs have disappeared. GMD irrigators are paying $20 million a year more for water due to the inflationary effect of the Commonwealth intervening in the market to buy water and reduce the pool.
The Plan has a process and it includes flexibility to get the best environment outcomes without causing more hardship. Politicians need to respect the processes and flexibility they agreed to when the Basin Plan was approved in 2012.
Goulburn Murray Irrigation District (GMID) Water Leadership was formed in late 2015 as a strong voice for water security. The Forum’s members are leaders in horticulture, dairy and cropping, food processing, local government, community and politics.
What must be done
1. Deliver the full 650 GL in environmental offsets to benefit our waterways and catchments.
2. Accept the 450 GL ‘upwater will inevitably cause additional negative socio-economic effects if recovered from irrigators, and abandon the Commonwealth On-Farm Further Irrigation Efficiency (COFFIE) program.
3. Redirect the $1.5 billion earmarked for COFFIE into environmental improvement projects and farm upgrade incentives with water savings remaining on farm.
4. No further water removed from production either through buyback or on-farm upgrades that require farmers to transfer entitlements to the Commonwealth.
5. Develop a regional economic development plan to attract new agricultural investment to the GMID and retain High Reliability Water Shares in the region.
The Basin Plan is a 2750GL plan
The Basin Plan is not a 3200 GL Plan. It is a 2750 GL Plan, but with flexibility to vary the volume to reflect new knowledge on socio-economic impact and environmental management since the Plan was enacted in 2012. The Basin Plan is an adaptive management plan. As such, it is delivered legally in full if the volume recovered is within the range 2206 GL to 3200GL. The range reflects the Basin Plan model’s limits of change to ensure its environmental objectives and indicators are met.
Water recovery for the environment
2100 GL billion litres has been recovered for the environment so far, most (1772 GL) from the southern Basin, and most of that (1100 GL) from irrigators. There is a push to recover more water from irrigators - up to 450 billion litres - under a political deal with South Australia in the last weeks before the Basin Plan was signed in late 2012.
Recovering more water from irrigators will cause substantial additional hardship in irrigation-dependent communities, particularly in the GMID which has contributed more water than any other region. It will also affect the water market, making water much more expensive, particularly in dry years.
The States and the Commonwealth have other options to deliver the Basin Plan's environmental objectives without recovering more water from irrigators.
450GL was promised, not guaranteed
If 450 GL was 'guaranteed' to SA in the Basin Plan, then why would it need to be legislated separately? The Plan is already a legislative instrument. The push to legislate the 450 GL is an admission the supposed 'guarantee' was only ever a political deal. In the Plan itself, the 450 GL is no more guaranteed than the 650 GL in environmental offsets allowed in the Plan. How much of either is delivered is conditional on socio-economic and environmental impacts.
Water recovery for the environment has left a lasting legacy of reduced production, lost jobs and hardship in towns and communities. Reduced production, is costing the GMID economy $550 million a year, and an estimated 1000 jobs have disappeared. GMID irrigators are paying $20 million a year more for temporary water because the Commonwealth intervening in the market to buy water has reduced the pool for production and therefore had an inflationary effect.
Multiple studies undertaken over the last two years, using different methodologies, all come to the same conclusion: the GMID is at a tipping point if more water is recovered from irrigators in the southern Basin.