Federal irrigation takeover doubt valid
VICTORIA has legitimate concerns about the Commonwealth takeover of the Murray-Darling Basin irrigation system, says a senior agricultural economist.
In Farm Policy Journal, Alistair Watson says the Commonwealth’s plan is a radical solution to an indisputable litany of problems. These include a history of slow progress and interjurisdictional bickering, and a failure to put a cap on water diversions and to punish miscreant states, he says.
Dr Watson, a freelance economist, is a former chief research economist at the Australian Bureau of Agricultural and Resource Economics and senior lecturer in agricultural economics at Melbourne University.
He says the Commonwealth will revise the water cap, taking into account groundwater, losses from afforestation, farm dams and diminished flows after investment to increase water efficiency. “How revised is ‘revised’ is a matter of conjecture,” he says, an issue that only Victorians have taken seriously.
“Referral powers could result in a future Commonwealth government taking major decisions that could affront farmers or environmentalists,” he says.
Dr Watson says a weakness of the Murray Darling Basin Commission (MDBC) is that it has operated by consensus. “A Commonwealth takeover will not remove the underlying conflicts between the states,” he says.
“Nor will disagreements between irrigators and environmentalists be removed.”
Dr Watson says Victoria has not been a backslider on the cap, and agrees with the Commonwealth on policies for water trade and exit fees.
The state has legitimate queries on the national plan. The Commonwealth has targeted the Goulburn and Murrumbidgee rivers in the south, but not the Queensland and NSW tributaries, where some of the worst abuses occur. “The Commonwealth cannot have it both ways by picking and choosing which rivers it wants to manage,” he says.
Also, would the Commonwealth take responsibility for managing water for plantations and urban dwellers in its area of interest, he asks.
Dr Watson says the national plan is overdue. “There is too much irrigation in Australia because of previous political excesses,” he says, but reform is tricky.
For example, government payments to irrigators for investments inside the farm gate send a confusing signal. “Like all input subsidies, this part of the national plan will distort on-farm decision-making, and is inequitable to those who have acted already in response to market incentives to save water,” he says.
Dr Watson says a Commonwealth takeover would cause administrative confusion. Apart from rural water authorities, other state agencies are involved in water and land management, such as the Environmental Protection Authority, he says.
Rather than a Commonwealth takeover, Dr Watson says Canberra and the states should finish existing programs for the Snowy and Living Murray initiative, and clean up the MDBC by removing the effective veto given to each jurisdiction. “Penalties should apply to non-compliance with the cap,” he says.
Dr Watson says the economic rationalist’s nightmare is that history may be repeating itself. “Excessive reliance on engineering solutions to water shortages is a mirror image of the technology-driven ethos that created those shortages in the first place.”
