Not for the first time Four Corners this week aired an alarmist program on the Murray and irrigation, full of dark forebodings of graft and corruption, overlaid on the familiar green left theme that Murray Darling basin, the source of over 40 per cent of the nation’s agricultural produce, was witness to a robbery of our environmental heritage.
Chris Corrigan defended his business Websters against the claim that he had somehow inveigled $40 million from the regulatory custodians. The President of the NFF had an article supportive of the plan that has taken 20 per cent of the water from the Basin’s farmers and claiming that the ABC got it wrong because it excluded the returned water not used by irrigated crops in their growth process.
Irrigation farmer, Ron Pike had a piece in Quadrant that accurately stated how the Murray Darling plan had evolved and was destroying the region’s prosperity, though most of us would disagree with one of his solutions that involves restricting the trading of water.
I had this article ($) in the Spectator pointing out
Dams transformed the highly irregular flows of the system (the annual variation being between 7,000 and 118,000 gigalitres) into a placid river. This not only allowed some 12,000 gigalitres of water out of the average 34,000 gigalitres to be allocated to irrigation use, but also gave us a river far more suitable for recreation as well as for fish and birdlife. The Murray Darling became a working river like the Nile, the Mississippi, the Indus, and the Po.
Climatic factors mean the irrigated area of Australia is low by world standards, less than one per cent compared to 20 per cent in many well-watered countries.
Having created a valuable agricultural resource, Australia’s predilection for (normally destructive) policy meddling has, since the 1990s, worked on tearing it down.
In 2007, Environment Minister, Tony Burke, a former Wilderness Society member, created a 400 strong quango, the Murray Darling Basin Authority, tasked with buying or otherwise finding 2,700 gigalitres to be poured down the river as environmental flows. The $13 billion program was carefully constructed to comprise funds to save water by better channels and so on, as well as direct purchases from farmers.
This week’s Four Corners program “Cash Splash” attacked the symptoms of the debacle rather than its cause. Its target became the “speculators” who had bought water rights (usually without the land to which they were previously attached) and were seeking to profit by selling them. It also criticised as wasteful the part of the scheme that involves payments for water saving through improved infrastructure.
Speculators’ activities enable resources to be switched from those who value them less highly to those who are willing to pay most for them. Speculators therefore have a beneficial effect. The fact that the water licences are detachable from the land they originally served is a vehicle for ensuring this (and informal trading among licence holders has been common for decades).
The real tragedy is that the scheme exists in the first place. There is no evidence that the former allocation of some 11,000 gigalitres of water to irrigation was excessive. The claims that it was so were rhetorical and have mainly been refuted (for example, no species have become extinct, the rainfall has not been reduced, salinity – a natural rather than human caused problem – was easily resolved.
Meanwhile the Plan has taken 20 per cent of the water from irrigators, derating the nation’s most valuable agricultural region, reducing its annual output by some $3 billion. For the region this has meant less work for suppliers, contractors and those servicing the now diminished agricultural industry. For Australia as a whole it is yet another self-harming policy that makes us considerably less wealthy.