Home > Economic policy, Environment > Framing and farming

Framing and farming

November 4th, 2010

My column in last week’s Fin was about the communication and policy failures surrounding the release of the draft plan for the Murray Darling Basin. I still hope that a solution can be salvaged, but the release was a fiasco.

No one will be forced out

Accidents of timing sometimes work out in interesting ways. Early this year, the Risk and Sustainable Management Group at the University of Queensland, which I lead, planned a workshop to review the draft plan for the management of the Murray-Darling Basin, then due for release in July. The rather optimistic title was ‘Water policy in the Murray-Darling Basin: Have we finally got it right?’ and the idea was to allow leading economists and scientists, with the hindsight of a few months, to review the plan and its reception.

Instead, because of delays to the election, the workshop was held only a couple of weeks after the release of the ‘Guide to the Draft Plan’, copies of which were still smouldering on the steps of community halls around the Basin. In this context, the sub-title ‘Have we finally got it right’ took on a tone of sardonic irony.

Surprisingly, though, the consensus of the workshop was that, in substantive terms, the draft plan did mostly get it right. Many of the problems we have seen are the result of poor communication and an excessive bureaucratic reliance on the provisions of the 2007 Water Act, under which the report was required. Others could be addressed with sensible government policy responses to the problems inevitable in dealing with the consequences of decades of largely failed policies.

The big communication problem was the media framing of the plan in terms of ‘cuts’ to water entitlements and allocations, resulting in a string of news stories of farmers saying their businesses would be ruined by cuts of the magnitude envisaged in the plan. The presentation of the draft plan by the Murray Darling Basin Authority did little to challenge this framing. As a result, the Gillard government was left to play catch-up, protesting that it had already committed itself to ensure that water would be acquired only through voluntary participation in purchases or water-saving investments.

The discussion of economic impacts was similarly misleading and similarly poorly handled. Model estimates of changes in employment levels were translated as ‘jobs lost’, when in reality they mean nothing of the kind. The most direct impacts will be on the number of irrigation farm operators. Given reliance on voluntary buybacks, the number of operators who will lose their jobs, or be forced off the land, can be precisely estimated at zero. The reduction in employment will primarily take the form of operators choosing to sell their water entitlements to fund either retirement or a shift into other industries.

For most towns and cities in the region, the ‘job loss’ estimates will be similarly notional. Total population in the Basin is growing, and so is employment. A small change up or down in projected employment growth over a decade or so is little more than a modelling artifact.

These purely notional estimates serve to distract attention from the more important results, focusing on the minority of communities in the Basin where a contraction in irrigated agriculture is likely to produce a reduction in total employment or to exacerbate existing adverse trends.

Communication failures are never the whole story. The government should have had, at the ready, a regional development package that would address both unmet needs in regional Australia as a whole and the specific needs of communities in decline, regardless of the cause of this decline.

Instead, policy responses have been narrowly focused on irrigators and irrigation infrastructure. Billions of dollars have been allocated to projects to improve the efficiency of irrigation, despite evidence that very little water is ultimately lost to the system through processes such as leakage and seepage, which mostly return water to rivers and groundwater systems. If even a fraction of this sum were allocated to improvements in social infrastructure, it could generate enough new jobs and social returns to more than offset the adverse impacts of a contraction in irrigated agriculture.

A solution to the environmental, economic and social problems of the Murray Darling Basin is within our reach. A combination of voluntary repurchase of excess water entitlements and investment in social infrastructure could be funded from the $10 billion already on the table for the Water for the Future initiative. Success or failure will tell us a lot about the capacity of the Gillard government to deliver meaningful reform.

Categories: Economic policy, Environment Tags:
  1. Sam
    November 4th, 2010 at 13:03 | #1

    It looks to me like a repeat of the mining tax PR disaster

  2. Hermit
    November 4th, 2010 at 13:52 | #2

    Perhaps no-one will be forced out but lifestyles may become less attractive as towns shrink. Not so good when the only shop or supermarket is the petrol station that sells baked beans at double city prices. Not so good when bright teenagers have to board at city schools because the nearest school still open has low academic standards.

    I haven’t read the report but I hope it includes an estimate of costs and foregone revenue. Bob Katter claims we will import more food from NZ. We will export less. Country folk will move to the city and impose a greater burden on urban infrastructure. Apart from social costs I also believe we can lessen the need for such large environmental flows. In my opinion giant evaporation pans like Lake Alexandrina SA and Menindee Lakes NSW should be severely reduced in size. If they are so attractive make tourists pay hefty user fees to buy water allocations on the open market.

  3. rojo
    November 4th, 2010 at 14:03 | #3

    I think the job losses mentioned in the plan are now void as basically every irrigation area within the MDB ramps up for a near “normal” season and the necessary help is re-employed. It’s true that drought has severely affected irrigatioon employment, and that buy backs on a zero allocation aren’t going to lower production. Things have changed in the last 6 months, storages have filled, wetlands are wet, the lower lakes are full and water is flowing out to sea. I suspect the Basin Plan would have had less a polarising effect if the MDBA had not delayed it for so long.

    In my region the govt has elected to distribute water back to farmers, even though a record drought has only just had a mild break. And the MDBA want’s another 20% cut from our valley! Please let’s ensure the science is valid before we have to have social engineering.

    As a farmer I had hoped some of the $10 billion would go toward improving environmental water use efficiency. Improving the environment and at the same time using less water. That may be by channeling/pumping water to key sites, banking off sites so that water doesn’t escape target zones and timing deliveries for best advantage. This won’t appeal to strict naturalists I’m sure, but I can’t see value in providing flows of 80GL/day simply to get water levels high enough to provide the 5GL that might be req’d by say Chowilla Nat. park.

  4. November 4th, 2010 at 14:19 | #4

    Well put John. It seems to me that Rudd-Gillard (and Obama) find it impossible to explain the reason for a problem, and what they are doing about it, in simple terms. It is costing them electorally. I had a go here http://davidhortonsblog.com/2010/10/14/start-here/ at suggesting a way that, say, Barnaby Joyce might approach things in an intelligent manner, but it could equally be used by Tony Burke. He, waking in fright at the manufactured furore, has sought “legal opinions” and is clearly backing away rapidly from doing anything to support the Murray/Darling environment. It didn’t have to be like that. It is rapidly becoming impossible, as farming/mining/industrial/forester groups learn media techniques, to achieve any conservation measures. Our grandchildren will regret this.

  5. wilful
    November 4th, 2010 at 15:05 | #5

    Pretty much a bog standard approach for most major natural resource access reforms. Every VEAC/ECC/LCC I’ve been aware of has made spurious claims about how many new tourism jobs will be created by new national parks, and the ‘willingness to pay’ of distant city-dwellers is seen as the economic justification for the change.

  6. Salient Green
    November 5th, 2010 at 07:07 | #6

    The most efficient water users in the basin, the crops which return the greatest dollars and the most employment per Megalitre are the fruit and vegie crops which have been punished severely by a free market ideology which gives assistance to the most inefficient users of water, export crops like rice, cotton and pastures for meat production.

    As well as assistance by free market ideology which hurts the efficient producers, these export oriented users apparently require massive amounts of cheap water using the cheapest, and most inefficient, application method available, flood watering, in order to compete in the supposedly free markets they are exporting to.

    I’m all for growing our own rice, cotton and meat but where is the sense exporting vast amounts of water when doing so ruins the environment as well as efficient water users in the Basin.

    Flood watering, open channels and large shallow dams have got to go. Fix up all man-made infrastrusture, get it into the 21st century and everyone will be surprised at how much more water there will be for the environment and how much more productive those rehabilitated irrigation districts will become.

  7. Ikonoclast
    November 5th, 2010 at 07:08 | #7

    D. Horton said, “… suggesting a way that… Barnaby Joyce might approach things in an intelligent manner.”

    ROFL (Rolling on floor laughing)!!! Barnaby has proven many times over that that’s impossible.

  8. JamesH
    November 5th, 2010 at 09:18 | #8

    As a dedicated lefty I think the capacity of the Gillard Government to deliver meaningful reform is somewhere between zip and nil.

  9. rojo
    November 5th, 2010 at 18:51 | #9

    Salient, I would agree that fruit and vegies are high gross earners. Fruit requires a reliable source of water, that the Murray provides 99% of the time. That reliability is built on ricegrowers and pasture based production having no water for their crops when inflows are poor. Most people who have an interest in water realise that annual crops like rice and cotton only flourish when there are big enough water inflows like this year, and go without in drier years – leaving water to be allocated to permanent plantings. How would orchards and groves have gone these last couple of years if the area had been doubled? Rice and cotton were certainly going without.

    Vegies are very much a supply and demand product, one or two cotton fields worth of horticulture would flood the market punishing all.

    I wonder why water entitlements in cotton growing areas are as expensive as high security Murray water if, as you allude, cotton is inefficient. I also wonder why you believe you pay more for water than a cotton grower?

  10. Alice
    November 5th, 2010 at 19:00 | #10

    @JamesH
    James H – me too – I always thought I was centre – but apparently these days Im a lefty for daring to think the government can and should run public trains and public buses..imaginthat? The things governments used to provide in this country as a matter of routine government business have now become a communist plot if you even mention “public services”.

    I tell you – this country has gone mad. We are paying for governments who do absolutely notrhing except wreck the country with their adherence to righjt wing “market knows best” mantras.

    Oh when will they just go and when will the stupidly moronic voters wake up. The only consolation is, the voters afre even more stupid in the US. Must be lead poisoning that the average man can be so stupid.

  11. Salient Green
    November 5th, 2010 at 20:42 | #11

    rojo@9 thanks for the reply. I think part of your reply shows a very ‘industry-centric’ view of water use rather than an ‘eco-centric’ view. I don’t think it is helpful to your case to say that high value high efficiency crops exist only because low value low efficiency crops don’t take their water in low water years. That to me is pure spin. Rice and cotton are recent crops in the MDB and are the main contributors to the crisis in the basin. Not that I’m blaming individual farmers.

    I don’t need to reference my water bill to know that I pay more than $60 per Megalitre for water plus other access charges, and that cotton growers pay nowhere near this amount. Cubby station would be paying, at this rate, $30,0000,000 for it’s 500 Gigalitre entitlement.

    This shouldn’t be an us or them situation. Up river irrigators have acted hysterically for the reasons John Q has described but at least it shows irrigators are not going to be a walkover and that augers well for a continuance of some sort of prosperity for regional areas.

  12. Salient Green
    November 6th, 2010 at 09:25 | #12

    Cubbie in fact pays just $3700 a year for it’s water but another cotton farmer pays $30/ML.
    I pay between $110 and $140/ML depending on consumption and the spread of fixed costs.

  13. Jill Rush
    November 6th, 2010 at 18:13 | #13

    The failure to explain clearly can be sheeted home to a failure to train public servants in policy development or anything much else. Public servants are located in Canberra devising policy which they rarely have to deliver or explain. The explanations they develop are long on bureaucratise and short on comprehension because they don’t understand that the normal person lives in a different world.

    The government has relied on these people to develop the policy and to write their scripts. The lack of training and the failure to develop public service capability anywhere but Canberra, as the ideas set in train in the Howard years continue, has been the biggest policy failure.

    The reason that the wonks in Canberra and Washington can’t communicate is because they live in a different world where there is no pressure to pay bills or where failure is very often rewarded.

    The rest of us knew that bringing wasteful irrigators to the table would be very difficult and yet there was no preparation for this eventuality with the Murray Darling Basin Authority relying on people being nice at their public meetings. There is a need to work out how to get the ideas across other than relying on lengthy tomes, ministerial press releases which are long on spin or the popular media which will always prefer a beat up to the details. So many press advisors with so little nous.

  14. BilB
    November 6th, 2010 at 19:18 | #14

    “where there is no pressure to pay bills or where failure is very often rewarded”

    heresy I say, heresy!!!

  15. Ikonoclast
    November 7th, 2010 at 08:46 | #15

    If the public service is a mess it is because it was gutted and politicised by the arch right-wing society wrecker, John Howard.

    As for the subsidised irrigators, that’s the trouble with subsidies to business. It encourages an entitlement mentality worse than anything in the ordinary welfare sector.

  16. Alice
    November 7th, 2010 at 13:24 | #16

    @Ikonoclast
    Im amazed (not) to find the desalination plant at Kurnell is sucking in ecoli bacteria at alarming levels from raw seawater. Guess this is on the cards when you build a desalination plant in between two ocean sewerage outfalls. The true meaning of recycling courtesy of the perennially stuff up prone NSW State Government.

  17. Hanrahan
    November 8th, 2010 at 10:24 | #17

    Welcome to Public Sector Land, where perfection is barely adequate and any rational explanation is deemed “spin”.

    I honestly don’t know why anyone bothers to try and do anything for a better Australia. It seems a successful career in Australian politics involves mastering the art of doing as little as possible and then leaving the mess for someone else to clean up.

  18. derrida derider
    November 8th, 2010 at 11:35 | #18

    Alice whatever the argument about the other merits or demerits of desalination, intake water quality is a non-issue. No virus, let alone bacterium, is going to get through a reverse osmotic membrane that stops sodium atoms. You could easily put raw sewage in and have absolutely sterile water coming out (not that I’m actually suggesting that because there are less thorough but cheaper ways to recycle sewage).

    Also, its diffcult to find any natural source of water (including littoral seawater) that doesn’t have SOME coliforms in it, because the bug is ubiquitous in all mammalian guts; Kurnell is close enough to swimming beaches for that alone to put measureable amounts in. It’s the concentration that matters – higher concentrations of E coli are used as an indicator that there may be other less common (hence harder to detect) but more troublesome faecal bugs present, rather than the E coli itself being a big concern.

  19. rojo
    November 8th, 2010 at 22:18 | #19

    salinent, I disagree. Sometimes more water is available than the environment requires, proven by the Basin Plans upper requirement of 7600GL, which in the end it didn’t deem necessary even though it believed it’s brief was environmental protection. Let’s look at a 4000GL cut, that still leaves approx 7000GL for irrigators which cannot be used exclusively for high security water as we are well aware inflows can be as little as 1000GL a year.

    In summary annual plantings are necessary to ensure reliability for permanent plantings. Unless of course we should simply waste water the environment doesn’t need and flood property unnecessarily.

    It’s all very nice to wish that we could all be ecocentric, however that would be easier if I hadn’t purchased water entitlement and developed infrastructure prior govts changing the groundrules. It’s pretty easy to accept reform if you have nothing to lose.
    It would also be easier to take if the govt wasn’t actually selling the very water purchased for the environment back to irrigators given the drought has barely broken in my valley. And yet the MDBA “need” another 20% back. Lets be sure about what the environment needs in the first place.

    The Basin plan shows that 17% of water flow leaving my valley would reach the Murray Mouth. At $2239/ML the govt has paid for buybacks that means it would be cheaper to pay $12000/ML for SA entitlement. Actually $30000/ML because my reliability is about 40%.

    I’m not sure how to compare our costs. Last year we were able to pump 150ML yet paid approx $20000 in fixed costs to Statewater alone. $150/ML before further levies applied by the Nsw office of water. The previous year I got nothing for that $20000, which makes it hard to put a $/ML figure on. A nearer normal allocation will cost $40/ML to Statewater. All before pumping and opportunity costs.

    To buy someone elses surplus is about $250 at present. If I were a Murray irrigator I could buy surplus water for $60/ML.

    I note some resentment that Northerners were allocated water in relatively recently in historical terms. I can only say I purchased my entitlements in good faith and feel I am using those entitlements to the best of my ability.

Comments are closed.