The NSW Irrigators’ Council (NSWIC) is urging caution of further water buybacks driving up water prices for farmers, contributing to cost of living pressures and rising food prices.
“Rising input costs for producers means rising bills for consumers,” said NSWIC Policy Manager, Christine Freak.
“Water policy decision-making has a direct link to both the availability and affordability of food in supermarkets, and therefore the flow-on effects throughout the economy,”
For example, ABARES data reveals water buybacks have already driven water allocation prices above $200/ML in three out of 10 years, and estimates taking another 450 GL from farmers (no matter whether through direct or indirect buybacks), would push this to eight out of 10 years[1].
“Water reform has led to 1 in 3 litres of water previously available for irrigation, now being transferred to the environment. While a positive for the environment, this has caused a spike in prices farmers must pay for the remaining water on the market,”
Concerns are not only the cost-push inflation from higher input prices of water, but simultaneously, the reduction in production further compounding this effect on food prices through decreased supply.
A Victorian Government report found additional buybacks to make up expected shortfalls[2] in the Basin Plan would lead to up to 17,500 hectares of horticulture being dried off in a repeat of the Millennium Drought.[3]
“Irrigation typically provides more than 90% of Australia’s fruit, nuts and grapes; more than 76% of vegetables; 100% of rice and more than 50% of dairy and sugar,”
“Governments ruling out further shrinking the water available to grow food and fibre is necessary to help take the pressure off,”
It has been encouraging to hear the NSW Premier, Chris Minns, tell Parliament his Government wants to deliver a Plan that supports our farming communities.[4] It has also been pleasing the federal Government has commenced community consultation to get better ideas on delivering the remainder of the Basin Plan.[5]
“This doesn’t mean doing nothing, but doing things differently, to deliver a Basin Plan in a way that works together with Basin communities to target key degradation drivers like invasive species, habitat degradation, and fish passage, which can’t be resolved by adding water alone,”
NSWIC reports have found the NSW-share of the additional 450 GL is the equivalent of removing nearly half of the high-security water left for farmers in the NSW Southern Basin.[6]
[1]https://www.agriculture.gov.au/abares/research-topics/water/future-scenarios-smdb; https://www.agriculture.gov.au/abares/products/insights/economic-effects-of-water-recovery-in-murray-darling-basin
[2] Under a scenario of the Federal Government buying back an additional 760 GL (372 GL for ‘Bridging the Gap’ plus 388 GL for Efficiency Projects)
[3] https://www.water.vic.gov.au/murray-darling-basin-plan/what-is-the-murray-darling-basin-plan/social-and-economic-impacts-of-the-basin-plan-in-victoria
[4] Legislative Assembly Hansard – 24 May 2023 – Proof (nsw.gov.au)
[5] Consultation hub | Delivering the Murray-Darling Basin Plan – Climate Change (dcceew.gov.au)
[6] https://www.nswic.org.au/wp-content/uploads/2022/08/2022-08-01-450-Report-FINAL.pdf
