The Australian Dairy Industry Council (ADIC), the peak national representative body for Australia’s dairy industry, says the government decision to abandon 14 Murray-Darling Basin water projects shows the urgent need for practical environmental outcomes that don’t strip water from food-producing regions.
It follows reporting in The Weekly Times that, after years of planning and tens of millions of dollars in public investment, projects intended to recover water through Sustainable Diversion Limit Adjustment Mechanism (SDLAM) measures will not proceed.
This leaves a potential environmental water shortfall of up to 340 gigalitres (GL).
ADIC chair Ben Bennett said the government had ignored mounting evidence many of the projects would not meet the proposed December 31 deadline.
“If the Australian Government allowed more flexibility, some of these projects could have been achieved,” Mr Bennett said.
“The volume of milk produced in the Basin has already declined by half a billion litres since 2012, raising serious questions about the further consequences for communities if governments seek to recover the water through buybacks instead.
“These projects were intended to prove that the government could deliver the Basin’s environmental outcomes through smarter infrastructure improvements and environmental measures, rather than taking more water away from food-producing regions.”
Instead, dairy farmers and regional communities are being told years of government effort, consultation and investment cannot deliver the promised outcomes.
“The real question now is: what could 340GL of water mean for Australia's food-producing regions, including dairy, if it remained available for productive use?”
The Australian dairy industry commissioned modelling by Ricardo last year to assess the industry impact of water buybacks ranging between 302GL and 683GL.
“The independent modelling found removing 302GL of productive water through buybacks would lead to price increases of about 17.5 per cent and reduce annual milk production across the southern Basin by between 3 and 15 per cent,” Mr Bennett said.
That means less milk, higher costs and reduced confidence for the dairy farmers, processors and regional communities that rely on irrigated dairy production.
“Keeping 340GL in use is an opportunity to produce more Australian milk, strengthen regional dairy manufacturing and export competitiveness, support Australia's food security, and protect the productive capacity of one of the nation's most important dairy-producing regions.
"Every gigalitre taken from productive agriculture has consequences that extend far beyond the farm gate. And now the government has thrown its hands up and said, ‘this is too hard’.”
The Ricardo analysis shows buybacks will increase costs for every remaining irrigator and place additional pressure on an industry already operating in a highly competitive global market.
ADIC deputy chair John Williams said the latest developments also raised concerns about public accountability.
"Governments have already spent millions of dollars pursuing these projects,” Mr Williams said.
“Communities deserve to know what has been achieved, what lessons have been learned and how environmental objectives will be delivered without causing unnecessary harm to food production, the dairy industry and regional economies.
“The answer cannot be to withdraw these projects and simply default to more buybacks. That would represent a failure of policy, not a success of environmental management.”
ADIC is calling on all Basin governments to use the current review of Murray-Darling Basin Plan implementation to refocus efforts on practical environmental outcomes, modern infrastructure, operational improvements and flexible water management arrangements that benefit both rivers and regional communities.
“We support environmental stewardship and a healthy Murray-Darling Basin,” Mr Williams said.
“But after years of investment, the lesson from these cancelled projects should be that governments need smarter solutions, not more blunt instruments.
“If 340GL can no longer be delivered through these projects, the priority must be for government to work collaboratively with the dairy industry to find better ways forward that deliver environmental outcomes while protecting Australia's capacity to produce food, support regional jobs and keep Australian dairy products on supermarket shelves.”