Returning water to the environment – how should we do it?
Over the last 100 years, water use for agriculture in the Murray-Darling Basin has increased by over 500%.1 To meet this demand, state governments have given thousands of billions of litres of water rights to farmers for irrigation. But this water use comes at a cost and it’s the environment that’s paying the price.
Reduced flows, increasing salt loads, algal blooms, plummeting fish and bird populations, tree deaths and the closure of the Murray mouth have forced governments into action and the Murray-Darling Basin Plan is the latest in a series of attempts to return water from consumptive use to the environment. The question is – what is the appropriate method for making the transfer?
There are four potential mechanisms available to governments to recover water for the environment:
- Option 1: Compulsory acquisition of water rights and reducing the pool of water available for consumption
- Option 2: Closing down inefficient or unproductive irrigation areas and providing a transition package for affected irrigators
- Option 3: Voluntary buyback of water rights from ‘willing sellers’ in catchments where water recovery is needed
- Option 4: Infrastructure improvements to increase the efficiency of irrigation water delivery and on-farm water use.
Despite its potential attraction from an equity and environmental perspective, no government in its right mind will consider option 1. Any suggestion of reducing the consumptive pool, either with or without compensation, is considered an infringement of property rights and is the first option off the table. Option 2 is also deeply unpalatable to governments as in their view it involves picking ‘winners’ and ‘losers’ – those who stay in irrigation and benefit from infrastructure modernisation, and those who do not.
Which leaves options 3 and 4. Option 3 has been adopted by the Commonwealth government which has now acquired almost 1,000 GL of environmental water through its Restoring the Balance program of purchase from willing sellers. 280 GL of this is high reliability water in Victoria. This water has the same legal status, reliability and security as entitlements held for other purposes such as irrigation.
Voluntary buyback has been heralded by the Productivity Commission as the most efficient and cost-effective way of returning water to the environment and the program has got a gold star from the Australian National Audit Office. Yet the Windsor Inquiry, which has been looking at the impacts of the proposed Basin Plan, has labeled the program ‘non-strategic’ and called for an immediate end to the voluntary buyback. This is despite widespread support from individual farmers who view the buyback as a business opportunity and the fact that every government tender has been oversubscribed.
Option 4 – upgrading irrigation infrastructure - has been enthusiastically embraced by state and federal governments, with billions of dollars worth of investment, and is the preferred method of many irrigator groups including the Victorian Farmers Federation. Yet this is the most expensive way of retuning water to the environment according to the Productivity Commission, and infrastructure projects can cost up to 10 times as much as buyback per ML added to the environmental pool . Many of the most cost effective projects have already been completed and as governments seek fresh projects they are becoming increasingly expensive.
So what is the rational thing to do? The Windsor Inquiry calls for a ‘strategic approach’ without defining what that should be – the implication seems to be that governments should wait for an approach by a group of irrigators who wish to sell up together, an opportunistic version of Option 2. Far better would be a truly strategic approach – a considered evaluation, using the CSIRO traffic lights approach, as to which areas have a long-term future in irrigation in terms of soil suitability and adequate water supply and which areas are better suited to other uses such as dryland agriculture, ecosystem service provision, carbon sequestration or something totally different – for example a new TAFE college, rural residential use or solar power generation.
Areas with a long term future in irrigation can then be targeted for infrastructure modernisation both on and off farm to create state of the art, sustainable and high value land uses and return water to the environment. Areas that are more suitable for other uses can be retired from irrigated agriculture and be targeted for a comprehensive structural adjustment package to transition to state of the art, high value and sustainable land uses and return water to the environment. It’s not a matter of picking winners and losers, it’s more a case of assisting communities to follow different pathways to transition to more sustainable futures, all of which have better long-term prospects than current agricultural and irrigation practice. And the other big winner is the environment which underpins all the economic activity anyway.
Such a strategic approach requires integration across and between governments, and a proper ‘plan for the Basin’. In the mean time, what is so non-strategic about buying water for the environment from willing sellers in stressed catchments? It provides real water where it is most needed and offers a fair price to cash strapped farmers. The federal government should continue its buyback program until its accumulated enough water to restore the rivers of the Basin to health and keep the Murray mouth open.
1 MDBA (2010) Guide to the proposed Basin Plan, p 26
2 See for example DSE (2008) Draft Northern Region Sustainable Water Strategy, p 205
3 Senate Estimates Environment and Legislation Committee, 25/5/11
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