The Australian Dairy Industry Council’s (ADIC) has expressed concern in a submission to the
Senate Inquiry into the Murray-Darling Basin Plan, regarding the impact of the Basin Plan on dairy business viability.
In the submission the ADIC states its support for a plan with clear and appropriate targets to recover water for the environment provided farms remain
viable. So far, more than 1160GL of a possible 1500GL transferred from irrigation to the environment through buybacks.
Dairy farmer and Chair of the ADIC Water Taskforce, Daryl Hoey said in its current form the Basin Plan isn’t achieving the right balance, setting unrealistic
timelines as well as a lack of planned transition and structural adjustment.
“A significant pain of adjustment is already being felt in the dairy industry, even if no more water is transferred from the irrigation pool across
to the environment,” Mr Hoey explained.
“We can clearly see the impacts on dairy farming systems through exposure to higher water prices, a more volatile temporary water market; reduced viability
of some irrigation districts; and overall, difficulty in growing our milk production.”
Dairy Australia analysis indicates that, based on conservative estimates, the 120GL of high reliability water entitlements dairy farmers in the Goulburn
Murray Irrigation District sold to the Commonwealth as buybacks, could have resulted in the production of an additional 289 million litres of milk
if those entitlements were still owned. That 289 million litres of milk would be worth approximately $144 million at the Farmgate.
Farmers in the same district are now sourcing around 275 GL a year from the temporary market to meet their needs (due to reduced ownership of entitlements)
have added a cost impost of $41million at $150/ML. On 12 October 2015 temporary water was trading at $300/ML.
The ADIC is calling for Government to “press pause” on the Basin Plan to ensure it can achieve the right balance, and therefore achieve genuine outcomes.
“To get the Basin Plan back on track we need more realistic timelines and a clearer picture of socio-economic and environmental effects before more
water is taken from the irrigation pool,” Mr Hoey said.
“This includes a clearer understanding of the water market and more appropriate approach to the 450GL “upwater”. We are also seeking greater flexibility
to trade environmental water and an appropriate sustainable diversion limit adjustment mechanism.”
The ADIC has welcomed the Commonwealth Environmental Water Holder’s decision to sell 20 GL of temporary water in the Goulburn system, which will enable
more trading of temporary water. However, the ADIC said it is vital producers in the region benefit from the availability of this water through
a fair process to trading the water.