Taking water from productive use in the NSW Murray region is coming at a massive cost to its communities.
That’s the stark finding from a socio-economic study into impacts of the Murray-Darling Basin Plan.
It shows the reduction in water for productive use is costing $120 million at the farm gate in an average season.
An economically accepted multiplier of three puts the cost to local communities at about $360 million.
Combined reports from the Murray Valley and Goulburn Valley are putting annual losses at nearly a billion dollars.
And the report shows it could get even worse for one of Australia’s most productive food bowls, warning if there was a further reduction of 750 gigalitres available in the consumptive pool, which is possible if there are further buy-backs, water deliveries for food production could drop a further 20 to 30 per cent.
This scenario would ‘‘challenge the viability’’ of Murray Irrigation Limited, which is the major water delivery corporation.
Murray Group spokesperson David May said this would in fact challenge the viability of the entire region because Murray Irrigation is the lifeblood of the region, which relies on irrigation for its existence.
He said it is hoped the report will ‘‘ring alarm bells in the corridors of power’’, and make politicians realise the serious consequences of the Basin Plan’s flawed implementation to our nation’s prosperity.
‘‘Although the NSW Murray Valley is directly impacted, it’s every Australian who should be concerned with the report’s findings,’’ Mr May said.
‘‘How long are we going to be conned by this folly? There is very little scientific evidence that tells us all the water being removed from productive use for the environment is effective, or even needed.
‘‘Apart from this, last year’s floods proved beyond doubt that flow models were wrong and there is no way that huge volumes of water as proposed under the Basin Plan can be delivered to South Australia.
‘‘Surely it’s time to take stock and adopt a common-sense approach to water policy, in the best interest of the environment, people who live in the Basin and the broader Australian community.’’
The report, ‘Basin Plan Socio-economic impacts NSW Murray Valley’ was prepared by RM Consulting Group for the Murray Group.
It is the first stage, with further reports expected to highlight the huge social and economic cost from the Basin Plan to the NSW Murray.
Apart from the $120 million cost at farm gate under the Basin Plan, the report has found that:
●The transfer of 451GL of general security water entitlement to the environment represents some 28 per cent of the general security that was previously held within Murray Irrigation Ltd.
●The main impact has been on annual cropping sectors, in particular rice, which has seen a reduction in production by nearly 30 per cent.
●A reduction in dairy production by around 21 per cent and increased vulnerability in a drought situation with higher reliance on access to the temporary market.
●Regions that are predominantly horticulture such as South Australia, Sunraysia and Griffith have emerged largely untouched by the plan to date.
●The reduction in the size of the consumptive pool has pushed up the average price in the allocation water market. This higher price makes irrigated production of annual summer crops less viable and increased the likelihood that water will be sold out of the area rather than used in production.
●That loss of production impacts both on the irrigation sector and on the sectors who provide services to the irrigation sector.
●The reduction in the volume of water used within the traditional irrigation districts may undermine the commercial viability of the irrigation businesses.
●Any further transfer of entitlement to the environment will further exacerbate these outcomes.