The Murray-Darling water debate

The Murray-Darling water debate

01 Nov 2010

lin-crase-thumb-new Professor Lin Crase

A version of this opinion piece first appeared in the Border Mail on 28 October 2010

The release of the Guide to the Draft Basin Plan has created considerable angst with vocal dissent expressed at meetings in rural centres.  Irrigation lobbyists have raised strenuous objections to the Guide.  Namely, the reductions in water use have been claimed to be too severe and the flow on effects to the wider community have been depicted as calamitous.

They argue that water buybacks should be substantially reduced (although none appear willing to offer an alternative figure) and urge that irrigation infrastructure projects be used as a substitute means of reducing over-allocation. The rationale for this approach is that water buybacks will supposedly benefit individual farmers but irrigation communities as a whole purportedly benefit from irrigation infrastructure.

There are four main problems with using publicly-funded infrastructure projects in irrigation.  First, it is now widely acknowledge that little water can actually be saved by such measures.  In simple terms, the low hanging fruit on water-saving infrastructure has long been harvested so that new infrastructure often reallocates water away from downstream beneficiaries rather than saving water.

Second, this is an extraordinarily expensive means of gaining any water.  The costs per megalitre will be at least four times as great as purchasing water from willing sellers.  This simply means less taxpayers’ dollars to assist in other areas.

Third, irrigation infrastructure makes it harder, not easier, for farmers to adapt to the likely impacts of climate change.  The upkeep costs of gold-plated irrigation make it more difficult for farmers to cope with low allocations or sequences where there are possibly zero allocations.

Fourth, infrastructure does not benefit the community per se.  It benefits particular farmers and disadvantages others. Farmers located away from the backbone to the grossly inflated Northern Victorian Irrigation Renewal Project can attest to this fact.  To portray such projects as benefiting the wider community is either misguided or grossly deceptive.

Recognising the problems associated with using irrigation infrastructure as a means of assisting community adjustment, Professor John Quiggin has proposed an alternative approach.  Willing sellers would have their water purchased by the government and genuine community infrastructure would also be funded.  This could include financing important projects that provide public goods in regional towns – much needed improvements to roads, health facilities, for example.  Amongst the advantages of this approach is that public funding is targeted to provide for community interests and not the individual interest of a select few.  

It remains to be seen how irrigation lobbyists will respond to this proposal.  Failure to accept this approach would surely illustrate whose interests are really at stake in this debate.

Lin Crase is a professor of applied economics and the executive director of the Albury-Wodonga campus of La Trobe University.




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