Executive Summary | Environment Victoria

Executive Summary

We have a problem in northern Victoria

Northern Victoria is facing multiple challenges. These include ongoing drought coupled with the prospect of a permanently drier future, the economic and social challenges posed by the agricultural industry’s declining terms of trade, rising production costs and declining rural population; and the imminent collapse of the river systems on which rural industries and communities depend. Together these challenges create both a ‘wicked problem’ and an historic opportunity.

It’s a tough problem

‘Wicked’ problems are highly resistant to solution. They are hard to define, have many interdependencies and are multi-causal, and require an approach of shared understanding before any attempt can be made at resolving them. This Discussion Paper scopes out some aspects of the problems, current initiatives aimed at resolving them and suggests possible additional and alternative pathways. It is an attempt to generate some of the shared understanding necessary to create the space for shared solutions to the wicked problem to emerge.

Our rivers are on the verge of collapse

Northern Victoria’s rivers and their fertile floodplains are the lifeblood of the region and support its ecological, cultural and economic values. A healthy river system maintains its character, biodiversity and functions over time and achieves a long-term balance whereby the integrity of the natural system is preserved while meeting human needs. It is resilient in the face of environmental changes, including changes in climate and resource exploitation.

The health of northern Victoria’s rivers has been seriously undermined by the harvesting of water from rivers and aquifers, altered flow regimes, loss of habitat connectivity and water pollution, all of which arise from the State’s water management. Drought and climate change exacerbate these impacts, which have accumulated to give working rivers like the Goulburn the worst river health ratings in the Murray-Darling Basin.

The establishment of the Environmental Water Reserve (EWR) in 2005 to give legal protection to environmental water has not halted this decline. Significant additions of high reliability water are required to increase the EWR for all northern Victoria’s rivers, and improved management of both the EWR and catchments are needed to increase its effectiveness.

Recommended additions to the EWR for northern Victorian rivers:

Our communities are being hit hard

Healthy communities also maintain their character and functions over time and are resilient in the face of environmental and economic changes. Communities across northern Victoria have been challenged and severely stressed over the past two decades by declining terms of trade, altered demographics and shifts in government water policy in addition to 13 years of drought and accumulating impacts of climate change.

We need integrated solutions

The combined impact of these trends is to reduce community resilience and community capacity to adapt to change. The region has also experienced a long-term decline in natural capital that ‘business as usual’ will not resolve. These twin challenges together with the inextricable link between communities and their river systems mean that integrated solutions are required.

Land and Water Australia has recognized the need for large scale solutions and has identified the need for planned landscape change that “identifies the underlying landscape-scale processes that drive natural resource condition and the fundamental principles of strategic institutional responses.”

These solutions need to diversify regional economies and move away from reliance on irrigation

Many farmers have already made significant changes in the way they do business and have taken risk-based decisions to move away form irrigated agriculture. They are acting on the need to diversify their economic base to increase their resilience in the face of changing economic and physical climates. One large scale example is the recent decision by Campaspe irrigators to close down their irrigation district and take an exit package.

Changes like these need to occur in a planned and community endorsed framework that will provide multiple benefits. A CSIRO pilot study concluded that irrigated land use can be reconfigured using the ‘Traffic Light Concept’ into three planning zones based on soil, environmental and location characteristics. Different water investment strategies should be applied in each zone to optimize the benefits of irrigation reconfiguration and water purchase. These benefits include increasing the value of agricultural production and ecosystem services, and reducing water delivery costs and salinity loads.

There are many alternatives to irrigated agriculture

Successful strategies for transitioning away from irrigated agriculture need to identify alternative agricultural opportunities, products and production systems, and capture additional benefits in new and emerging markets and income streams. Resilient communities need diversified opportunities and a key requirement is the knowledge and confidence to make change. Further economic research of the region’s assets, capabilities and potential future industries is required. Environment Victoria will be publishing some research in May 2010 that maps potential transition pathways and identifies drivers of change for northern Victoria.

Some farmers have dramatically increased the value of production from their irrigation water by growing new crops while others have successfully managed the transition to dryland agriculture.
Some irrigators have become more opportunistic in response to declining reliability of entitlements for example by switching crops or selling entitlements from season to season. All of these strategies increase resilience in changing conditions.

The potential of strategic, landscape-scale initiatives to address the multiple challenges and build resilience is recognised in the Victorian government’s land and biodiversity white paper Securing Our Natural Future. However there remains a gap between vision and reality and the government is yet to come up with the funds to create the proposed biolinks. So far, business and philanthropic initiatives such as VicSuper’s Future Farming Landscapes project and Habitat 141 are leading the way in attempting to reconfigure the landscape to increase agricultural productivity and restore biological connectivity.

New and emerging markets such as ecosystem services and carbon biosequestration via soils and vegetation have the capacity to provide alternative income streams for farmers as well as increasing productivity, providing biodiversity benefits and mitigating climate change. Other non-traditional opportunities such as renewable energy generation could be pursued in northern Victoria, and innovative social policies to attract diversification of economic activity to the region.

We need a deliberate policy approach which helps communities transition. This will need to include structural adjustment processes

Whole government departments at both state and federal levels are devoted to developing and implementing policy on water management, natural resource management and regional planning. Some of this policy is outlined in the discussion paper, but there remains a lack of overall vision and integration to deal with the complexity of the ‘wicked’ problems it is intended to address.
Governments are prepared to make substantial investment in water buyback and irrigation modernization, but so far have been reluctant to invest in the much more difficult and diffuse area of transitional assistance. Many in the community are ahead of government in their thinking and actions, and are looking for support from government as they adapt.

Structural adjustment is a continuous process which can be driven in a particular direction by government leadership and investment. The current rate of change in economic, social and environmental conditions demands significant leadership by government to speed up the adaptation process. A later stage of the River Rescue and Regional Renewal program will invite regional stakeholders to create a community endorsed set of principles for structural adjustment.

River rescue and regional renewal – Environment Victoria’s action plan

Environment Victoria intends to develop an action plan to take to government that will include principles for structural adjustment and policy options to assist communities to transition away from dependence on irrigation and return water to stressed river systems. Development of the plan will be informed by a regional workshop and economic research, and we invite your comments and ideas about the issues raised in this discussion paper. Please comment through Environment Victoria’s website

Environment Victoria gratefully acknowledges the support of Perpetual Trustees for this project.

Questions for discussion

We welcome your input and thoughts on the questions raised by this discussion paper.

You can comment through Environment Victoria’s website. Your input will be used to inform our forthcoming workshop on River Rescue and Regional Renewal, and help develop the principles for structural adjustment that will for the basis of an action plan.

1. What approaches can we take to address the environmental and economic crisis facing our northern Victorian rivers and communities?

2. What are the priorities for river health in northern Victoria?

3. What is the best way to drive multiple benefits for communities and the environment?

4. What kind of information or support do people need to help them adjust to reduced water avaiability and explore new opportunities?

5. Do all farmers need the same kind of support?

6. What types of people or approaches are likely to be most successful in promoting change?

7. What are the key elements of a structural adjustment package to maintain viable rural communities and allow transition to other economic opportunities?

8. How can existing government programs and funding be better aligned and integrated to drive the kind of change required?