Don’t blame the Murray-Darling Basin Plan. It’s climate and economic change driving farmers out


Sarah Ann Wheeler, University of Adelaide

For the thousand or so farmers in Canberra in the past week venting their anger at the federal government, it’s the Murray-Darling Basin Plan to blame for destroying their livelihoods and forcing them off the land.

We can’t comment directly on their claims about the basin plan. But our research, looking at the years 1991 to 2011, suggests little association between the amount of water extracted from the Murray-Darling river system for irrigation and total farmer numbers.

That’s not to say there aren’t fewer farms in the basin now than a decade ago – there are – but our analysis points to the more important drivers being the longer-term influences of changing climate, economics and demographics.

Indeed our study predicts another 0.5℃ increase in temperature by 2041 will halve the current number of farmers in the basin.

Hostility to water recovery

The waters of the northern basin run to the Darling River and the waters of the southern basin run to the Murray River.
MDBA

Over many decades state governments in Queensland, New South Wales, Victoria and South Australia licensed to farmers more entitlements to water than the river system could sustain. The basis of the Murray-Darling Basin Plan, enacted in 2012, was to rectify this through buying back about a quarter of all water licences to ensure an environmental flow.

A water entitlement, despite its name, does not guarantee a licence holder a certain amount of water. That depends on the water available, and that is determined by the states, which make allocations to each type of licence based on its type of security and current conditions.

With drought, farmers have seen their allocations severely cut back, sometimes to nothing. And partly because they see there’s still water in the River Murray, some are very angry.




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Hostility to water recovery in fact predates the plan’s enactment, to when the federal government began buying back water entitlements in 2008. The Commonwealth now holds about 20% of water entitlements across the basin. More than two-thirds of these licences were recovered between 2008 and 2012.

Lack of correlation

Our research thus covers the period of most significant water buybacks. It also covers the period of the Millennium Drought, from 2001 to 2009, when the amount of water extracted from the river system dropped by about 70%.

Yet we see little evidence reduced water extractions led to more farmers exiting the industry.

As a very broad overview of the situation, the following graph illustrates the lack of correlation between measured water extraction in the Murray-Darling Basin and decreasing farmer numbers.



Water extractions have varied significantly between years, with a big decline over the decade of the 2000s even while farmers’ need for irrigated water increased due to lack of rain. La Niña brought record rains in 2010-11. The current drought across the basin took grip from about 2017.

Yet farmer numbers have declined at a relative steady rate. Within the basin in the time-period we modelled, they fell from about 90,000 in 1991 to 70,000 in 2011. This can be seen as part of a wider trend, with total farmer numbers in the four basin states falling from more than 230,000 in 1976 to barely 100,000 in 2016.

It might be argued that because irrigated farms make up only a quarter of all farms, the overall numbers might mask a greater correlation between water extractions and decline in irrigated farms. While the specific impacts on irrigation farming in recent years warrant further study, there’s no signal in our data pointing to extractions making a discernible contribution to farmer numbers throughout the basin.

Modelling farmer movement

Our findings are based on a specialised data set of population and agricultural census information from statistical local areas from 1991 to 2011. We used climate risk measures from 1961 onwards.

The following infographic shows the exit pattern of farmers by local area between 1991 and 2011.



We included as many climate, economic, farming, water and socio-demographic characteristics as possible to capture historical farmer movements and create a model able to predict movements based on variables such as average temperature.

Need for a multifaceted response

Overall our modelling results suggests the most significant and largest influences on farmer exit are rising temperatures and increased drought risk, followed by the economic factors that have have been reducing the proportion of the population engaged in farming for more than a century.

Declining commodity prices, higher unemployment and urbanisation are strongly associated with farmer exit. Urbanisation, for example, has made it attractive for farmers on city fringes to sell their land to property developers and exit the industry.

Research suggests irrigators in psychological distress are more likely to want the basin plan suspended. Our research suggests their distress is probably not primarily driven by the federal government buying water entitlements from licence holders who sold them willingly. Water recovery and the basin plan is simply an easier focal point of blame than the longer-term trends making the farming lifestyle less viable.




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Nothing will be gained by focusing on short-term “fixes” at the cost of longer-term environmental harm. The problems facing all farmers cannot be addressed in isolation from longer-term global climate and economic trends.

As a society we have to decide what we value: do we want to see such a mass exodus of farmers from the land in the face of a drying climate? If not, future policy for the Basin must consider the real long-term drivers of farm exit and take a multi-faceted approach to climate change, water, land, drought and rural development.The Conversation

Sarah Ann Wheeler, Professor in Water Economics, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Fish kills and undrinkable water: here’s what to expect for the Murray Darling this summer



Dry conditions will make for a difficult summer in the Murray Darling Basin.
AAP/Dean Lewins

Jamie Pittock, Australian National University

A grim summer is likely for the rivers of the Murray-Darling Basin and the people, flora and fauna that rely on it. Having worked for sustainable management of these rivers for decades, I fear the coming months will be among the worst in history for Australia’s most important river system.

The 34 months from January 2017 to October 2019 were the driest on record in the basin. Low water inflows have led to dam levels lower than those seen in the devastating Millennium drought.

No relief is in sight. The Bureau of Meteorology is forecasting drier-than-average conditions for the second half of November and December. Across the summer, rainfall is also projected to be below average.

So let’s take a look at what this summer will likely bring for the Murray Darling Basin – on which our economy, food security and well-being depend.

A farmer stands in the dry river bed of the Darling River in February this year.
Dean Lewins/AAP

Not a pretty picture

As the river system continues to dry up and tributaries stop flowing, the damaging effect on people and the environment will accelerate. Mass fish kills of the kind we saw last summer are again likely as water in rivers, waterholes and lakes declines in quality and evaporates.

Three million Australians depend on the basin’s rivers for their water and livelihoods. Adelaide can use its desalination plants and Canberra has enough stored water for now. But other towns and cities in the basin risk running out of water.




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Governments were warned well before the drought to better secure water supplies through infrastructure and other measures. But the response was inadequate.

Some towns such as Armidale in New South Wales have been preparing to truck water to homes, at great expense. Water costs will likely increase to pay for infrastructure such as pumps and pipelines. The shortages will particularly affect Indigenous communities, pastoralists who need water for domestic use and livestock, irrigation farmers and tourism business on the rivers.

Water in major storages as reported at 13 November 2019.
Murray Darling Basin Authority

As we saw during the Millennium drought, when wetland soils dry some sediments will oxidise to form sulfuric acid. This kills fauna and flora and can make water undrinkable.

Red gum floodplain forests and other wetland flora will continue to die. Most of these wetlands have not had a drink since 2011. The desiccation, due to mismanagement and drought, is likely to see the return of hypersalinity – a huge excess of salt in the water – with river flows too weak to flush the salt out to sea.




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If drought-breaking rains do come, as they did in 2010-11, this would create a new threat. Floodwaters would inundate leaf litter on the floodplains, triggering a bacterial feast that depletes the water of oxygen. These so-called “blackwater” events kill fish, crayfish and other aquatic animals.

The risk of blackwater events has largely arisen because government authorities have failed to manage water as they had agreed. In particular, the NSW and Victorian governments have not worked with farmers to allow managed river flows to inundate floodplains.

The prospect of thousands of dead fish in the Murray Darling Basin looms large again this summer.
AAP/GRAEME MCCRABB

How did we get here?

The severity and impacts of this drought should not come as a surprise. In the 1980s, the CSIRO’s first projections of climate change impacts in the basin foreshadowed what is unfolding now.

Despite the decades-old warnings, water management authorities in some catchments favoured water extraction by irrigators over rural communities, pastoralists and the environment. For example, the NSW Natural Resources Commission in September found that state government changes to water regulations brought forward the drying up of the Darling River by three years.




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Since the basin plan was adopted in 2012 our federal and state political leaders have reduced the volume of real water needed to keep the rivers healthy, supply water to people and flush salt out to sea. For example, in May 2018 the federal government and Labor opposition agreed to reduce water allocated to the environment by 70 billion litres a year on average, without a legitimate scientific basis.

The basin plan is based on historical river flow records, without explicitly allowing for diminished inflows resulting from climate change. Australian water management has followed what’s been termed a “hydro-illogical cycle” where drought triggers reform, but government leaders lose attention once it rains. This suggests meaningful reform must be implemented when drought is occurring and politicians are under pressure to respond.

Severe drought and mismanagement means a dire summer for the Murray-Darling river system.
Dean Lewins/AAP

How to fix this

Governments must assume that climate-induced drought conditions in the basin are the new normal, and plan for it.

Action should include:

  • Revising water allocations consistent with climate change projections

  • Investing in managed aquifer recharge to supply more towns with reliable and safe water

  • Restoring rivers by reallocating enough water to sustain their health

  • Increasing wetland resilience by reconnecting rivers to their floodplains in wetter years

  • Improving river health, such as by fencing out livestock.

Investing in these adaptation actions now would provide jobs during the drought and prepare Australia for a much drier future in the Murray-Darling Basin.The Conversation

Jamie Pittock, Professor, Fenner School of Environment & Society, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Paddling blind: why we urgently need a water audit



There’s broad support from communities and farmers for proper water audits.
John/Flickr, CC BY-SA

Quentin Grafton, Crawford School of Public Policy, Australian National University and John Williams, Australian National University

In the wake of a damning royal commission and an ABC Four Corners investigation, the federal government has created an Inspector General for the Murray-Darling Basin, to combat water theft, ensure water recovery and efficiency projects are delivered properly, and essentially make sure everyone is acting as they should.

While this is a laudable aim, the Inspector General – currently former Australian Federal Police Commissioner Mike Keelty – cannot hope to do this job without knowing how much water is being used in the Basin, by whom it is used, and where.




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This might seem like basic information, but the Bureau of Meteorology, the Murray-Darling Basin Authority and state water accounts are not up to the task.

We urgently need a comprehensive audit to track the water in the Murray Darling Basin, so Inspector General Keelty can effectively investigate what he has already described as a “river ripe for corruption”.

Up the creek

Back in 2004 all governments in Australia agreed to track and provide information on water in terms of planning, monitoring, trading, environmental management, and on-farm management.

But water accounts still lack many essential features including double-entry accounting. When applied to water, double-entry accounts means that when one person consumes more water, someone else must consume less.




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The technology to track this already exists: satellites that can quantify surface water are successfully being used used in the United States.

If we had monthly water consumption measurements, we could see how much water is being used, by whom, when and where. This would help decision makers see problems before they emerge, such as the mass fish deaths in the Darling River, and respond in real time.

As a recent report from the Natural Resources Commission shows, without proper accounting, too much water is taken upstream – seriously harming downstream communities.

Wide support for an audit

An independent Basin-wide water audit is supported by communities and some irrigators.

In July NSW farmers voted in support of a federal royal commission into “the failings of the Murray Darling Basin Plan”. In our view, this vote shows many farmers support much greater transparency about how much water is being consumed, and by whom.




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Double-entry water consumption accounts would help identify whether the billions of dollars planned in subsidies to increase irrigation efficiency will actually deliver value for money. But irrigation improvements only generate public benefits when more water is left or returns to flow in streams and rivers. Such flows are essential to healthy rivers and sustainable Basin communities.

Irrigators’ crops benefit from increased efficiency, so subsidies help farmers greatly – but it is very unclear whether they do anything for the public good. In fact, they seem to reduce the amount of water that finds its way back into the rivers. Research also shows infrastructure subsidies to improve irrigation efficiency typically increases water consumption at the Basin level.

Our research, published earlier this year in the Australasian Journal of Water Resources shows federal irrigation infrastructure subsidies may have reduced net stream and river levels. This is even after accounting for the water entitlements irrigators provided to the government in exchange for these subsidies.




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Independent audits

Just like financial accounts, water accounts must be independently audited.

For the average taxpayer, who has to justify every dollar they get from the government, it’s hard to imagine how some corporations can be given millions of dollars in subsidies without actual measurements (before and after) of the claimed water savings.

If Newstart recipients need to report and manage their income and have a job plan, as part of a system of appropriate checks and balances, shouldn’t the Australian government also be checking whether billions spent on subsidies for irrigators actually saves water?




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A water audit would cost less than 1% of the money already spent on water infrastructure subsidies in the Basin. Unlike irrigation infrastructure subsidies, a water audit is value for money.

Importantly, independent water consumption accounts would allow the Inspector General for the Murray-Darling Basin to effectively manage our most critical nature resource, water.The Conversation

Quentin Grafton, Director of the Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, Australian National University and John Williams, Adjunct Professor Environment and Natural Resources, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

NSW’s water plan is ‘not working’ but we can save the Barwon-Darling


Barry Hart, Monash University

The plan to manage water in the Barwon-Darling is not working, according to a draft review released last week.

The New South Wales Natural Resources Commission, which released the draft report, found the Barwon-Darling is an “ecosystem in crisis”. The report provides a robust blueprint for a more sustainable water-sharing plan.

The review confirms criticism the existing plan gives too much water to irrigators and has added to pressures on the entire Murray-Darling ecosystem.




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What the plan covers

The draft review examines the 2012 Water Sharing Plan for the Barwon-Darling, which covers 1,600km of the river from Mungindi to Wilcannia. The river here flows south-west through a relatively narrow floodplain with a tightly meandering channel and a highly variable flow pattern.

The river is unregulated and depends heavily on upstream rivers for its water (for example, Condamine–Balonne, Border rivers, Gwydir and Namoi).

January’s massive fish kills around Menindee are only the most recent example of the pressures on the river’s ecosystems. Alongside the fish deaths, research has shown that other aquatic species in the system, such as river mussels, have suffered losses that will take many decades to recover.




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Communities that live along the river told the commission people can no longer fish, swim or drink the river water. Graziers struggle to provide water for their stock because the river dries up more often.

Indigenous communities are particularly affected because without water their strong connection to the river – the Barka – is being damaged. A Barkandji elder told the commission:

The river is everything. It’s my life, my culture. You take the water away from us, we’ve got nothing.

Bad priorities

While the review found drought, upstream water extraction in NSW and Queensland and climate change have all contributed to these problems, the greatest effect comes from inappropriate water-sharing rules, particularly when water levels are low.

The law underpinning river management in NSW prioritises protecting the environment and basic landholder rights (including native title) over irrigation. However, the commission found the current plan does not achieve this.

In fact, the plan has been highly controversial since it was enacted in 2012. This in large parts arose because major changes were made between the draft plan circulated in 2011 and the actual plan gazetted in 2012. The commission documents 16 such changes in the review and rates six as substantial.

The NSW government did not publicly explain the reason for such significant alteration in 2012, but there has been much speculation powerful vested interests influenced the government to provide more water for irrigation.

The most important effect of these changes was letting irrigators take water even when the river is very low. The review concludes:

These provisions benefit the economic interests of a few upstream users over the ecological and social needs of the many.




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What to do?

The review recommends the NSW government urgently change water-sharing rules so these better comply with the legal requirements to protect the environment and other water users, restore community trust and make the river more resilient to future shocks.

Key priorities for the NSW government are:

  • redesigning the water-sharing rules so environmental protection and basic landholder rights cannot be harmed by lesser priorities such as irrigation

  • introduce new flow targets to more effectively protect critical ecosystems and enhance river health

  • change rules relating to water extractions by A Class licence holders during critical low-flow periods, particularly those relating to commence-to-pump, cease-to-pump, and the size of pumps.

  • introduce and enforce more effective metering and monitoring

  • develop strategies and rules that address the inevitable impacts of climate change

  • develop and implement more integrated management of water resources in the northern Murray-Darling Basin.

The commission did note there have been positive changes to the NSW government’s approach to water policy and management since the ABC 4 Corners report Pumped in 2017 and the subsequent Ken Matthews report.

However, the Murray-Darling Basin Plan required NSW to complete a new water resource plan for the Barwon-Darling River by June 2019. The state missed this deadline. The NSW water minister has requested an extension to December 31 2019. A recent assessment by the Murray-Darling Basin Authority suggests NSW is still some way from completing this water resource plan.




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While NSW delays, the Barwon-Darling river system and its communities suffer. The NSW government now has an excellent blueprint for a new plan. It must urgently implement the review’s 29 recommendations and complete a new plan for the Barwon-Darling before the end of 2019.The Conversation

Barry Hart, Emeritus Professor Water Science, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Drought and climate change are driving high water prices in the Murray-Darling Basin


Neal Hughes, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Water prices in the southern Murray-Darling Basin have reached their highest levels since the worst of the Millennium drought more than a decade ago. These high water prices are causing much anxiety in the region, and have led the federal government to call on the Australian Competition and Consumer Commission to hold an inquiry into the water market.

Inevitably, whenever an important good becomes more expensive – be it housing, electricity or water – there is a rush to identify potential causes and culprits. In the past few years high water prices have been blamed on foreign investors, corporate speculators, state government water-sharing rules, new almond plantings and the Murray-Darling Basin Plan.




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While some of these factors have had an effect on the market, they are in many ways a distraction from the simpler truth: that high water prices have mostly been caused by a lack of rain.

Supply drives the market

The waters of the northern basin run to the Darling River and the waters of the southern basin run to the Murray River.
MDBA

Market reforms in the 1980s and 1990s enabled water trading in many parts of Australia. By far the most active market exists in the southern Murray-Darling basin, which covers the Murray River and its tributaries in northern Victoria, southern New South Wales and eastern South Australia.

The market allows users – mostly irrigation farmers – to trade their water allocations (effectively shares of water in the rivers’ major dams). This trading helps ensure limited water supplies go to the farmers who value them the most, which can be crucial in times of drought.

Historical data shows the main driver of water market prices in the southern basin is change in water supply.

The following chart shows storage volumes (in orange) and water prices (in red) in the southern basin since 2006. Prices peaked at the height of the Millennium drought in 2007. During the floods of 2011, they fell near zero. Prices have increased again during the latest drought, and are now at their highest levels in a decade.


Water allocation prices and storage volumes in the southern Murray-Darling Basin.
State government trade registers, BOM, Ruralco Water, ABARES estimates.

Lower rainfall, higher temperatures

While water prices have always been higher in dry years and lower in wet, we’ve been getting a lot more dry years in recent decades.

Over the past 20 years, rainfall, run-off and stream flow in the southern basin has been far less than historical conditions.

The below chart shows modelled flow data for the Murray River, assuming historical weather conditions and no water extraction, over the past century. It shows that average water flows this century are about 40% below the average of the 20th century.


Modelled ‘without-development’ annual Murray River flow, 1900 to 2018.
Murray-Darling Basin Authority.

We know these reductions are at least partly related to climate change, driven by both reduced winter rainfall and higher temperatures.

Lower rainfall and higher temperatures also make crops thirstier, increasing demand for irrigation water. This was evident in January, when temperatures exceeded 35℃ for 14 days and irrigators’ demand for water spiked from about 4.5 gigalitres to 7 gigalitres a day.




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The basin plan in perspective

The Murray-Darling Basin Plan seeks to improve the environmental health of the river system by recovering water rights from irrigation farmers. To date, more than 1,700 gigalitres of water rights – about 20% of annual water supply – have been recovered in the southern basin.

By reducing supply, water recovery was always expected to increase water prices. However, the effects of water recovery on supply – while significant – are still small relative to the effects of climate over the same period, as shown in the below chart.


Water allocation use in the southern basin with and without water recovery.
State government agencies, Department of Agriculture, ABARES estimates.

Measuring the precise effect of water recovery on prices is difficult. Water buybacks are straightforward and have been modelled by ABARES and others. But the effects of infrastructure programs – where farmers return a portion of their water rights in exchange for funding to upgrade infrastructure – are harder to estimate.




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‘Carryover’ rule changes

Historically farmers had to use water allocations within a 12-month window. The introduction of “carryover” – most recently in Victoria in 2008 – means users can now hold their unused water in dams. This rule change was a good thing, as it encourages farmers to conserve water and build up a buffer against drought.

But it might also have contributed to anxiety about the water market’s operations.

Since water allocations can be bought and held for multiple years, information about future conditions can have a big effect on prices now. For example, we see large jumps in price following news of worse-than-expected supply forecasts. This may have helped fuel concern about “speculators”.

Over the longer-term, the ability to store water helps to “smooth” water prices, with slightly higher prices in most years offset by much lower prices in drought years. Again this is a good thing, but it may have added to the perception of higher prices in the market.

Water demand is rising

When a profitable new irrigation activity is willing to pay more for water – as is the case with almond farms in the southern basin – competition for limited supplies can potentially drive up prices.

ABARES’ research shows that between 2003 and 2016 there was little change in irrigation demand (aside from that linked to rainfall). Growth in demand from expanding activities such as almonds and cotton was offset by reductions in others including dairy, rice and wine grapes. However, there is evidence since 2016 that demand for water has started to increase, contributing to higher water prices. Longer-term projections suggest this trend may continue.

With drought and climate change reducing water supply, and demand for both environmental and irrigation water increasing, high water prices are only likely to become more common in the basin in future.The Conversation

Neal Hughes, Senior Economist, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Murray-Darling Basin scandal: economists have seen it coming for decades


John Quiggin, The University of Queensland

Nations behave wisely, Israeli foreign minister Abba Eban observed five decades ago, “once they have exhausted all other alternatives”.

One can only hope that proves the case with water policy in Australia’s Murray-Darling Basin, the nation’s largest river system and agricultural heartland.




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The ABC’s Four Corners program Cash Splash, aired last night, illustrates how thoroughly we are exhausting the options that don’t work to keep rivers being sucked dry by irrigators. Billions of dollars have been spent on infrastructure schemes that have failed to deliver any measurable improvement in water flows or the state of the environment.

The Murray–Darling Basin is Australia’s largest and most complex river system. With 77,000 km of rivers, it is the food bowl of the nation.
Murray–Darling Basin Authority

This failure is no surprise to economists who have studied the problems of the Murray-Darling Basin for decades.

The central problem is well understood, as are the workable (and unworkable) possible responses.

The basin covers four states: Queensland, New South Wales, Victoria and South Australia. All state governments have allocated permits to extract water for human uses (irrigated agriculture and urban water). The allocations grew rapidly in the second half of the 20th century, exceeding the sustainable capacity of the natural environment.

One sign of the failure became dramatically obvious in 1991, with an outbreak of toxic blue-green algae over 1,200 km of the Darling River. Algal blooms are fed by nitrogen and other nutrients in fertiliser runoff and sewerage. They continue to occur.

This event underlined the need to leave enough water in rivers for “environmental flows” to keep the system healthy.

Acting with what now seems like impressive promptness, the Murray-Darling Basin Ministerial Council (made up of the water resources ministers from the basin states, the Australian Capital Territory and the federal government) imposed a cap on water extractions in 1995. It limited extractions to the volume of water capable of being taken out by the infrastructure (pumps, dams, channels, management rules) that existed in 1993-94.

The cap was supposed to be a temporary measure. It wasn’t intended to solve the problem, just stop it getting any worse in the short run.

The long-term solution was to be a system of trade in water rights, introduced by the Council of Australian Governments in 1994. Combined with the right price signals from environmental purchases, this system was meant to allocate water to its most productive uses while reducing extractions to sustainable levels.

A quarter-century on, the cap is only now being phased out, and a vast array of measures have come and gone, including the National Water Initiative, the Water Act of 2007, Water for the Future and the Murray-Darling Basin Plan.

Buying block

The failure of these initiatives rests on one simple fact: the refusal of irrigation lobby groups to countenance the government buying water rights on the open market to increase environmental flows. Their opposition has been immovable, despite many individual irrigators being keen to sell their water rights and use the money to invest in alternative cropping activities or retire.

On the other hand, there are a lucky (often politically well-connected) few who have done very well from “strategic” purchases of water. Investigative journalist Michael West has noted the National Party’s Barnaby Joyce has been publicly hostile towards buybacks of water entitlements but authorised, as federal water resources minister, three major “strategic purchases”.

Instead of water purchases, politicians like Joyce have put their faith in subsidies to infrastructure, to improve the efficiency of water use.

The idea has a lot of intuitive appeal. If less water can be used, it should be possible to increase flows in the river system without reducing agricultural output. With rare exceptions, this appealing vision has dominated the thinking of politicians and much of the public.

The reality is sadly different. The failure of infrastructure-based water recovery was both predictable and predicted.




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I pointed out the main difficulties in a piece for ABC Online in 2012. The article didn’t contain any remarkable insights. It simply stated views shared by every independent economist who has worked on the issue.

The illusion of efficiency

Among the many problems with infrastructure schemes, two have stood out.

First, the measured cost of saving water through infrastructure schemes is two to three times as much as that of buying water on the open market.

Second, and more importantly, much of the supposed water savings are illusory. Much of the water “wasted” in irrigation systems is not lost to the environment. Most of the water leakage and seepage from irrigation channels eventually returns to rivers through groundwater systems. So “saving” this water through infrastructure efficiency doesn’t actually add anything more to environmental flows.

My 2012 analysis assumed a scientifically based effort to secure water savings at the lowest possible cost to the public. As the Four Corners report has shown, that assumption was massively over-optimistic. In reality, the scheme has been characterised by lax monitoring, cronyism and rorting.




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After the expenditure of billions in public money, the system may be worse off than before. As a result, environmental disasters keep on happening.

Along with recurring algal outbreaks, we are witnessing disasters such as the massive fish kills like that in western New South Wales in January. The massive fish kills have been attributed to little or no flow in the Darling River combined with plunges from high temperatures, starving the water of oxygen.

Hundreds of thousands of dead fish in waterways around Menindee, far-west New South Wales, in January 2019.
Graeme McCrabb/AAP

As the riverine environment keeps deteriorating, there’s no sign of any positive change in policy.

Eventually, though, we must hope Abba Eban will be proved right. Having exhausted all the options that don’t work, we will have to turn to those that do.The Conversation

John Quiggin, Professor, School of Economics, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Billions spent on Murray-Darling water infrastructure: here’s the result


Q J Wang, University of Melbourne and Avril Horne, University of Melbourne

Earlier this year, researchers suggested the amount of water returned to the Murray Darling Basin under a federal program has been “grossly exaggerated”, to the tune of hundreds of billions of litres.

The report argued that government investment in irrigation improvements might even result in a net loss of water for the environment.




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To investigate these claims, the Murray Darling Basin Authority commissioned us to undertake an independent review to examine the best available data for every irrigation efficiency project funded across the basin.

We found the government investment into irrigation efficiency projects has achieved 85% of the 750 gigalitres per year target. The remaining 15% of the target may be affected by unintended side-effects.

This result highlights the need for continued review of risks to the basin plan, as Australia grapples with the management of an extraordinary complex natural system.

How is water for the environment recovered?

The Water Act 2007 introduced significant reforms aimed at setting aside more water for the environment. At the time, record high levels of surface water were being consumed. Aiming to save 2,750 gigalitres of surface water (water flowing in the open air, rather than underground) the federal government began buying back water rights and investing in more efficient infrastructure.

The Commonwealth is providing A$3.1 billion to buy these water rights, of which A$2.5 billion has been spent. It is also providing more than A$8 billion for modernising infrastructure and water efficiency improvements, of which more than A$4 billion has so far been spent.

These projects aim to improve water delivery – reducing leaks and evaporation – and make irrigation more efficient. The water saving generated from these projects is shared between the governments for environmental use, and irrigators.

Mass fish deaths earlier in the year raised serious concerns about the health of the Murray-Darling system.
DEAN LEWINS/AAP

What are “return flows”?

To understand why the government investment in irrigation efficiency projects have not achieved 100% of the original target, we need to talk about return flows.

When water is diverted from the river for irrigation, not all of it gets consumed by the plants. Some water will make its way back to the river. This is called return flow. A large part of the return flow is through groundwater to the rivers, and this part is extremely difficult to measure. More efficient infrastructure and irrigation generally means less return flow to the river.

If these reductions are not considered when calculating the water savings, it is possible there will be implications for irrigators, the environment and other water users downstream, that previously benefited from return flows.

What we tried to determine is how much the efficiency projects reduced return flow.




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Are the water savings real?

For the first time, we attempted to bring together data on individual projects in order to assess return flows across the basin. We developed a framework for calculating return flows, which took into account water in the rivers, groundwater, and efficiency projects.

This is the first attempt to bring together the existing data on individual projects to assess return flows in the basin at a detailed level. A large portion of the data used in this study was collated for the first time and not previously available in a readily accessible format.

We found a reduction in return flow of 121 gigalitres per year as a result of the government funded projects. This is comparable to 16% of the recovery transferred to environmental entitlements.

What does this mean for the Basin Plan?

There are several important details that must be considered to assess the importance of the return flow volume for the environment and Basin Plan objectives. We do not attempt here to quantify the outcomes, but instead to raise a number of important considerations beyond simply “volume”.

1. Recovered water should be legally protected

Return flows are good for the environment, but are essentially accidental. As irrigation becomes more efficient, inevitably they will diminish.

On the other hand, formally allocated environmental water entitlements are legally protected. It is more secure for the environment – and far easier to keep track of.

2. It’s not ‘efficiency vs the environment’

Part of this debate centres around the idea that reducing return flows means less water for the environment. But in Victoria and New South Wales, before water is allocated to anyone (irrigators or the environment), a base level is set aside. This is the minimum required to keep the rivers physically flowing and to meet critical human needs.

Efficiency projects mainly affect this base-level flow of the river. This means the water reduction is shared across everyone who holds a water licence – the majority of which are irrigators.

This policy means it does not make sense to compare the effect of efficiency projects directly with the recovery of environmental water.

3. Volume is a crude measure of environmental benefit

The focus of the debate around return flows has been based on the annual volume of returned environmental water in comparison to the stated Basin Plan target.

However, the real objective of the water recovery is to achieve environmental objectives in the Basin. This is not just about annual volumes, but the quantity, timing, and quality of fresh water.

How should we move forward?

Our review has particularly highlighted the need for better ongoing data collection and regular evaluations.




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Both taxpayer investments and the water market are changing irrigation to become more efficient and reducing the river’s base flow. With this in mind, we need to regularly reexamine how we share water between everyone (and everything) that needs it, particularly in extended dry periods.

The Murray-Darling Basin is a constantly changing system, both in terms of climate and irrigation. Return flows are one of a number of potential threats to the Basin Plan. As the system is continually changing, these threats will need to be reassessed with each Basin Plan review.


A Four Corners program on the $13 billion Murray-Darling Basin Plan will air on ABC at 8.30pm on July 8.

This article was co-written by Glen Walker, a former CSIRO employee and now private consultant, who worked with the University of Melbourne on the independent review.The Conversation

Q J Wang, Professor, University of Melbourne and Avril Horne, Research fellow, Department of Infrastructure Engineering, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.