A CLAIM by a leading dairy lobby group that drought is responsible for high irrigation water prices has angered many Murray Valley irrigators.
Australian Dairy Farmers president Terry Richardson made the claim in an opinion article supporting the Murray-Darling Basin Plan.
“Ultimately it is the devastating impact of drought that is most responsible for rising water prices,” Mr Richardson said.
He quoted a report by consultants but the consultants are challenging his interpretation of their report.
“Water policy experts, including Aither, have found the market to be working effectively and that high prices are the result of high demand and low supply caused by persistently dry conditions and below-average rainfall,” Mr Richardson said.
Since the statement was published, the consultants, Aither, said Commonwealth water entitlement purchases had also contributed to the rise in the price of temporary water.
“In Aither’s 2016 report for the Commonwealth Department of the Environment we concluded that Commonwealth water entitlement purchases had increased water allocation prices. We estimated that government purchases increased water allocation prices by 27 per cent in 2014–15.”
The UDV has also issued a statement saying the ADF commentary does not reflect the views of the UDV or farmers.
The UDV has called on the ADF to “clarify its opinion”, saying farmers feel let down by the commentary and the lack of consultation.
The UDV says the basin plan has had a huge impact on the northern Victoria dairy industry and local communities, with farmers feeling stressed and frustrated.
“The UDV believes the basin plan must strike a balance on the impacts it is having in regional communities.”
Mr Richardson was referring to high prices for temporary irrigation water. Prices in northern Victoria peaked around $500/Ml last year, but the region was not in drought.
Aither said Commonwealth purchases played a role in pricing because whenever there was an increase in demand or a reduction in supply, prices were likely to increase.
“While the current drought will end at some point, Aither is of the view that market participants need to be prepared for a new normal. While there will always be seasonal fluctuations, compared to historical prices, higher long term allocation prices are expected to be driven by a mix of increased irrigation demand, new development, and water recovery from the consumptive pool.”
Blighty farmer Lachlan Marshall said his initial reaction to the comments by the ADF was extreme anger followed by disappointment.
“It is difficult to comprehend how the leader of a national organisation could have such a poor understanding of the impact the failing basin plan is having on the industry they are representing.
“For the benefit of Mr Richardson and his ADF colleagues, please take note: The plan is failing your industry. It is not protecting the environment. The science on which it was based is flawed and our communities are suffering.”
Southern Riverina Irrigtors chairman Chris Brooks said Mr Richardson needs to get out on the ground and talk to his dairy farmers.
“Terry Richardson doesn’t realise 50 per cent of cattle farmers have walked off the farm,” he said.
Cobram East dairy farmer and Murray Valley irrigator Paul Mundy said the remarks were ill-informed and missed the point that the the basin plan was creating completely unnatural flows.
Mr Mundy said it was becoming clear that the basin plan was fundamentally flawed.