Joint response of the Murray Valley Horticultural Alliance to the Proposed Basin Plan

Transcription

1 Jint respnse f the Murray Valley Hrticultural Alliance t the Prpsed Basin Plan 1 Intrductin Wh we are This respnse has been prepared by the Murray Valley Hrticultural Alliance, which is made up f the: - Almnd Bard f Australia (peak bdy) Dried Fruits Australia Inc. (peak bdy) Summerfruit Australia Limited (peak bdy) Murray Valley Citrus Bard Murray Valley Winegrwers Inc Murray Valley Table Grape Grwers Cuncil We draw ur membership frm Victria, NSW and SA stretching frm Cbram in the East t the Riverland in the West. We have frmed the alliance t address majr issues f cmmn cncern and this includes the Prpsed Basin Plan. This submissin This submissin is structured in 3 parts. 1) Intrductin; 2) Cncerns with the Prpsed Basin Plan; and 3) What changes we wuld like t see t the Prpsed Basin Plan. Overarching statement We recgnise the imprtance f managing the river and its beneficial uses in an efficient and sustainable way and we acknwledge the imprtance f prtecting and enhancing the envirnment. It is in the interest f ur industries t have a healthy river and envirnment and this is essential t secure ur future. We wuld like t see prvisin made fr greater incrpratin f the lcal knwledge and expertise held by reginal cmmunities in strategies prpsed fr achieving the gals f the Plan. We are unclear abut the envirnmental utcmes being sught frm the Prpsed Basin Plan and cnsider that the current apprach may cme at the unnecessary cst f further prperties being taken ut f prductin and lst emplyment, with assciated sci- Murray Valley Hrticultural Alliance respnse Page 1

2 ecnmic impacts. The issues raised in this submissin are relevant t many regins and the cmbined industries wish t emphasise the need fr: - water sharing arrangements that recgnise the need fr high security water t prtect the capital intensive and lng lead times t full prductin (3-10 years); planned structural adjustment and aviding the adhc drying ff f prperties with its assciated csts arising frm the Swiss cheese effect and stranded irrigatin assets; avidance f cntinued cmmunity angst generated by lack f clarity arund management arrangements and benefits t be achieved with envirnmental water. Imprtance f ur industries Figures frm the ABS 1 fr 2009/10 shw that fruit and grape prductin alne represented ver 40% f the Grss Value f Irrigated Agricultural Prductin (GVIAP) in the Murray Darling Basin. In the Murray Darling Basin (MDB) regin, the ttal GVIAP was $4.4 billin,. In , the cmmdities with the highest GVIAP in the MDB were fruit at $1.1 billin, grapes valued at $719 millin. Our industries are majr emplyers and we draw ur membership frm Cbram in the East t the Riverland in the West. The fllwing table prvides an indicatin f the level f activity in each f the key sectrs. Table 1: Estimated prductin Murray (SA, NSW and Vic) includes Gulburn fr Summerfruit area (ha) estimate Mature demand (ML/y) estimate Peple (fte) estimate Farm gate value ($M) Estimate lng term expected values Almnds 29, ,000 1, (current) 558 (mature) 2 Wine-grape 41, ,000 4, Table grape 8,000 68,000 3, Citrus 13, ,000 1, Dried fruit 5,000 37, Summerfruit 6,000 46,000 2, Ttal 102,000 1,006,000 12,000 1, Grss Value f Irrigated Agricultural Prductin, t Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 29/11/ Almnd Bard f Australia Statistics Natinal value $319 M, & $575 M lng term, 97% f area & value in Murray Valley And %20Swan%20Hill%202011%20.pdf $77 M plus Riverland prductin $105M frm 4 $240 M Mildura Regin Ecnmic Prfile Estimated at $14,000/ha fr citrus. 6,000 ha in Murray Valley (NSW and Vic) and 7,000 ha in Riverland 6 Estimated at $8,500/ha fr dried fruit 7 Renmark, Swan Hill, Sheppartn & Cbram represent 50% f Australia s summerfruit prductin $180 M GVAP, Area estimated at $30K/ha runded and water use at 7.6 ML/ha. Emplyment c2,000 surce pers cmm. Summerfruit Australia. Murray Valley Hrticultural Alliance respnse Page 2

3 Related ecnmic activity There is an extensive prcessing and supply chain assciated with ur prductin. This includes majr and minr wineries, packing sheds, prcessing plants, transprt, marketing and exprting activities. This generates cnsiderable additinal value and further reginal emplyment. This is a very significant industry that underpins many twns and cmmunities. These cmmunities include the twns f the Riverland, Mildura, Rbinvale, Swan Hill, Cbram and Sheppartn. As an example, it is estimated that irrigated prductin supprts 33% f emplyment in the Mildura Regin and smaller twns wuld be expected t have an even higher percentage. 2 Our main cncerns with the Prpsed Basin Plan Our main cncerns with the Prpsed Basin Plan are related t the reductin in the cnsumptive pl f water as a result f the Sustainable Diversin Limit (SDL). We nte that t achieve the SDL prpsed that the Suthern MDB is required t have a ttal reductin f 2,360 GL (1,389 GL in valley and 971 GL shared reductin). It is unclear where the water will cme frm fr the 971 GL shared reductin and what type f water entitlements will be required. It is a mistake t believe that high value hrticulture will nt be affected by the reductin in the cnsumptive pl. We expect significant reductins in hrticulture activity will ccur when water allcatins are lw and there culd be insufficient water t supprt perennial plantings. In these situatins ur industries will bear cnsiderable csts assciated with:- the need t purchase water frm the smaller temprary market. Fr example if ur industries were faced with a seasn that required the purchase f 50% f ur usual irrigatin requirement f 1,000,000 ML then at a cnservative value f $500/ML fr the purchase price then this wuld cst ur industries $250 M fr that ne seasn; the lss f sme plantings that are dried ff, plus their replacement cst fr redevelpment, and nging annual lsses until these plantings reached maturity; lss f prductin frm ther plantings that are mth balled r under irrigated. It is likely large parts f the perennial hrticulture industry wuld be unable t absrb the high cst f purchasing temprary water and remain viable. We believe that the SDL prpsed as it stands will: - Reduce the cnsumptive pl f water during drught perids. During the millennium drught water allcatins were s lw that the market price fr temprary water exceeded $1,000/ML initially and hrticultural plantings were dried ff. We believe that the cut in available water as a result f implementing the new SDL is likely t exacerbate this prblem during the next drught. The lng-term impact f this will be a lack f cnfidence in replanting and there will be a lss f high value hrticultural prductin with a subsequent flw n causing an ecnmic dwnturn in the dependent rural cmmunities. Murray Valley Hrticultural Alliance respnse Page 3

4 Result in changed river and strage management. We are unsure f hw this will impact n the fllwing aspects that are critical fr irrigated perennial crps: - the security/yield f water entitlements, the peratin f carry ver and spill-able water accunts, ratining when river channel capacity is reached. Reduce ecnmic activity as nging buy backs stifle cnfidence fr: - reginal industry develpment, industry planning, investment in prcessing infrastructure, and access t finance. Reduce the viability f cmmunity irrigatin districts as their revenue base is threatened by the unplanned and unpredictable Swiss cheese effect frm dried ff prperties and the increase in water charges fr thse remaining. Create nging cmmunity angst as lng as it remains very unclear: - a) What specific envirnmental utcmes will be achieved with the additinal 2,750 GL t be made available t the envirnment? b) Hw much additinal envirnmental benefit is achieved frm different levels f SDL. What is the marginal return per GL fr the envirnment? Hw can we be sure that additinal water fr the envirnment will be used efficiently t achieve envirnmental utcmes when there are already significant cnstraints in perating the River, such as third party impacts frm flding? c) What type f water the Envirnmental Watering Plan requires, when it requires it and fr what envirnmental assets? d) Wh will be respnsible and accuntable fr the use f the envirnmental water? e) Whether the 2015 review culd decrease the prpsed SDL and result in further reductins in the water available fr irrigatin use. f) Hw the shared dwnstream reductin (971 GL in the suthern MDB) will be allcated against each regin. g) Hw much f the reductin t the SDL will be met frm high security entitlements that will impact n high value users. h) Whether the prpsed water quality targets are realistic r nt and whether they will be met by dilutin flws frm the envirnmental water. i) Whether there is an abslute guarantee that n cmpulsry acquisitin f water will be required and that annual allcatins will nt be negatively affected. The water security f entitlements shuld be maintained. j) What adjustment packages will be available t assist cmmunities t respnd effectively in a planned way? 3 What changes we wuld like t the Basin Plan T imprve the Prpsed Basin Plan we wuld like t see the fllwing changes: - Murray Valley Hrticultural Alliance respnse Page 4

5 A shift away frm the buyback t a much greater emphasis n the fllwing 3 methds t meet the gap t the SDL: - 1) irrigatin supply infrastructure t create water savings; 2) n-farm irrigatin efficiency upgrades t create water savings; 3) engineering infrastructure t efficiently achieve the specified envirnmental watering bjectives. This is mst imprtant. We believe that these appraches will help maintain and enhance reginal cmmunities, while buy backs create decline. Assurance that the envirnmental utcmes will be achieved using the mst efficient ways f delivering flws t the envirnmental assets. This includes the incrpratin f engineering infrastructure mentined abve. It is essential that these engineering wrks infrm the SDL needed, and nt find ut later that the bjectives culd have been achieved with much less water. The delay f buy back until it is clear that a) envirnmental water needs are better defined, including the use f engineering infrastructure t achieve the envirnmental bjectives; and b) that all significant cst effective irrigatin supply and n farm infrastructure savings have been fund. If buy backs d prceed then they shuld be strategic and targeted t grups f irrigatrs wh agree t be part f a managed shut dwn f a supply system. This als needs t be crdinated with mdernisatin initiatives s that mdernised irrigatin assets d nt becme stranded/unused. Greater clarity n hw the envirnmental water manager will use the water and perate in the water market. We wuld like t see envirnmental water be made available t the market in extreme drught years. This wuld greatly benefit effrts t prtect perennial plantings. Clarity n what envirnmental utcmes will be achieved. We d nt understand the benefits r the evidence that is driving the water requirements fr the Murray Muth t be pen 9 years in 10 r the need t shift 2 millin tnnes f salt per year. A full cnsideratin f imprved river management t achieve envirnmental utcmes. It needs t be demnstrated that all the efficiency gains in hw the river is run have been made. Fr example, can imprved crdinatin r real time management f flws help achieve the envirnmental gals? Mre emphasis n the brader pprtunities t get better envirnmental utcmes frm the water that is already utside f the cnsumptive pl. Clarity and transparency n pssible future water refrms that may be intrduced, as the envirnment becmes the driver f river peratins and hw this may affect irrigatrs. e.g. impacts n delivery shares, extractin shares, spill-able water accunts, pssible river capacity cnstraints/ratining impacts when envirnmental flws and irrigatin flws are scheduled etc. Clarity n hw the Basin Plan will impact n each industry and regin and in particular hw much high security water the envirnment is likely t require and hw the shared reductin will be surced. Murray Valley Hrticultural Alliance respnse Page 5

6 Structural adjustment packages that reflect the impacts and can practically assist cmmunities and irrigatin districts adjust. We think it is crucial that these packages are develped and delivered in partnership with the affected irrigatin industries. There shuld be an emphasis n new prgrams that imprve irrigatin efficiency, develped in partnership with industry. We have a lt f experience t ffer the MDBA that is nt being utilised. A new emphasis n cperatin with industry and all levels f gvernment t achieve the mst efficient utcme fr all stakehlders. We are cncerned that there appears t be duplicatin and pssibly cmpeting interests with regard t the rles f: - The MDBA, The Cmmnwealth Envirnment Water Hlder, State wned envirnmental water and its managers, State water agencies, and their water managers Department f Sustainability, Envirnment, Water, Ppulatin and Cmmunities. Better engagement with cmmunities such as wrking with reginal grups and industries t identify and implement: - envirnmental assets, bjectives and efficient watering regimes, water savings frm infrastructure investment in the water supply system, water savings with n-farm efficiency measures. Clarity f hw the water quality targets will be met and if they are realistic. We need t knw if these targets will be met by the use f envirnmental water r ther water. We need t knw if the adptin f these targets culd influence the security f entitlements/ annual allcatins. Murray Valley Hrticultural Alliance respnse Page 6