Water Act Review Progresses but more still to be done

Dec 21, 2015

The Coalition’s response to the independent review of the Water Act 2007 was released in December 2015. The Government’s decision to adopt all of the recommendations, some wholly and others partially, including to provide greater trading flexibility for the Commonwealth Environmental Water Holder (CEWH), is positive new for Australian dairy farmers.

The Australian Dairy Industry Council (ADIC) has lobbied hard for increased flexibility for the CEWH in optimising environmental outcomes in ways that ensure dairy producers have better access to water supplies. Dairy has proved a flexible and responsible user of water. We have adapted our practices to be more water-efficient. However, reduced access to water resources is already putting pressure on dairy’s productivity and profitability. This CEWH flexibility is key to helping our industry remain viable. It will also ensure a balanced approach to achieving environmental outcomes in the Murray Darling Basin.

The Government’s stated commitment to continue to work towards achieving a total 650GL supply offset is also positive. Achieving the full amount through environmental works means more water stays in the irrigation pools.

Chair of the ADIC’s Basin Taskforce, Daryl Hoey described the response as a positive first step but highlighted greater improvements in the implementation of the Act and the Murray Darling Basin Plan are still required.

“That the Government didn’t agree with the submissions of many to amend the Act to unambiguously state a triple-bottom-line objective or to strengthen the current implementation of the legislation is of concern. Such an approach is critical,” Mr Hoey said.

“It’s good to see the Government amend timelines to some evaluations and reviews under the Act. We now need such revisions to be applied to all elements of the Act.

“In particular, there is a need for a robust evaluation of environmental, economic and social impacts before considering an additional 450 gigalitres (GL) of water being taken from agriculture.”

To see the ADIC submission to the Water Amendment Bill 2015 click here.


Pressing pause on the Basin Plan

Nov 01, 2015

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.

Representatives from the dairy industry are seeking to attend the Murray Darling Basin Plan Senate Inquiry hearings scheduled in November. To see the full recommendations from the ADIC submission see http://www.australiandairyfarmers.com.au/submissions

Bipartisan support for water buybacks cap essential

Aug 18, 2015

The Australian Dairy Industry Council (ADIC) has reiterated its long-standing support of the 1500 gigalitre (GL) cap on buybacks in the Murray Darling Basin Plan (MDBP) with its submission to the 2015 Water Amendment Bill last month. The Bill, which will legislate the 1500GL cap as part of the 2750GL target under the Basin Plan, requires bipartisan support to deliver dairy farmers with much-needed certainty about future water availability to sustain their business.

The 1500GL cap provides dairy farmers in the Murray-Darling Basin with much-needed certainty about future water availability to sustain their business. At the same time, environmental water can continue to be recovered through water-saving infrastructure projects, which will benefit the environment, farmers and local communities more effectively than buybacks.

However, there were aspects of the Bill that the dairy industry did not support, in particular the fact that the 1500GL buybacks cap applies only to water recovered towards meeting the 2750GL target. Additionally, the failure to address long-standing limitations in the Water Act 2007 and the Basin Plan in achieving the socio-economic neutrality and triple bottom line outcomes promoted so often by decision-makers is a missed opportunity.

The ADIC’s key recommendations in the submission to the Bill were to:

  • Ensure that the 1500GL cap on buybacks includes the 450GL in the Water for the Environment Special Account
  • Clarify that the entitlement transfer to the Commonwealth relating to infrastructure and reconfiguration for state programs are excluded in the 1500GL cap on buy backs.
  • The Basin Plan socio-economic neutrality test should include collective impacts on irrigation districts, community and water market.
  • Amend the Basin Plan to ensure that the 2750GL target is achieved first before any water recovery is counted towards the 3200GL target, and that any water recovered under the Special Account first covers any shortfall to the 2750GL target.
  • Clarify that the 450GL “up water” is an up-to amount, not a minimum.
  • Enable environmental water trading where the proceeds can be reinvested in works and activities for environmental outcomes, and to cover the Commonwealth Environmental Water Holder’s storage and other costs.

Bipartisan support for the legislative change remains a key priority for the ADIC, with representatives meeting with both sides of parliament to ensure the importance of passing the 2015 Water Amendment Bill is heard and acknowledged across the board.

To see the ADIC’s submission to the 2015 Water Amendment Bill click here

 

 

Audits streamlined to save on farm

Jun 18, 2015

The news that the Department of Environment will remove unnecessary audit requirements from the On-Farm Irrigation Efficiency Programme (OFIEP) has been warmly welcomed by Australian Dairy Farmers (ADF). The relaxation of the requirements, which ADF has been advocating for well over 12 months, will save programme participants in the southern-connected region of the Murray Darling Basin significant time, money and stress.

The issue arose from the Department of Environment insisting that every single farmer who got funding from the OFIEP, had to get an independent audit of their works, in addition to the individual farm compliance documents already held by the delivery partners. All of this was at the farmers’ personal expense and within 60 days of the end of each financial year.

The audits were designed to ensure that each of projects was completed within the terms and conditions of work contracts, and that the Government funding provided was spent appropriately.

On Wednesday 20 May, ADF received a letter from Parliamentary Secretary for the Minister for Environment, the Hon. Bob Baldwin MP, acknowledging ADF’s concerns around the cost imposition and stipulating alterations to the requirements. Farmers are now instead required to undertake an audit at the end of their project, rather than at the end of each financial year, and may use their personal accountant rather than a costly independent auditor to do this review.

Chair of the ADF Natural Resources Policy Advisory Group, Daryl Hoey said that while farmers had no objection to being accountable for their spending, the audits ultimately became red tape.

“The requirements were onerous from both a time and money perspective. Removing the additional requirements for farmers will mean savings of up to $2000, plus reducing the added pressure of going through an audit process,” Mr Hoey said.

“Beyond this it will also assist in streamlining the way in which the programme is rolled out, which may encourage greater uptake of irrigation improvement by farmers.”

ADF is strongly supportive of infrastructure programs under the Murray Darling Basin Plan as they have demonstrated significant cost-benefit, with upgrades to existing infrastructure delivering approximately $9800/ML worth of increased farm productivity.

An important part of the 450 GL recovery through on and off farm infrastructure savings under the Murray Darling Basin Plan, the On-Farm Efficiency Programme involves participating farmers transferring water entitlements back to the environment that are equivalent to half the savings they achieve. In return farmers receive government investment on their farm to improve their capacity to produce more milk from less water.

Upgrades already carried-out under the programme have delivered approximately $9800/ML worth of increased farm productivity per year.

To find out whether you’re eligible for the On-Farm Irrigation Efficiency Programme, click here


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