Murray Darling farming: a victim of green-induced government policies

I have a piece in The Australian today on the government induced water price increase and shortage  in the Murray Darling which is responsible for over 40 per cent of the nation’s farm output.  Here is an extract.

Drought Minister David Littleproud is to meet today with farming representatives to discuss a fivefold increase in prices of Murray Darling water.  The Minister attributes this to speculator hoarding together with another villain, climate change, which he says “is leading to hotter days, meaning droughts”.

Neither of these factors are the cause of the farmers’ discontent.

Although Murray Darling, like much of Australia is in serious drought,  for Australia as a whole rainfall has actually increased over the past century.

The real reasons behind the distress of irrigated agriculture are government policies that have reduced water availability.

In response to ABC supported activists, the Howard Government bought up water from farmers for environmental purposes and, in doing so, set in place bureaucratic machinery which could readily expand the reallocation.

Under Rudd’s radical environmentalist water minister, Tony Burke, the stakes were raised and 2,750 gigalitres were to be either bought from irrigators or created (by water saving expenditures). At a cost of $13 billion, this meant taking 20 per cent of a vital input into farming.  Inevitably, reduced output as well as higher prices have been caused by this government induced scarcity.

Blaming twin bogeymen of speculators and climate change is no solution to the problems governments have created.  The Murray Darling water policy has been a disaster for the region and the nation as a whole. The solution is to accept the reality that the river system, prior to recent years’ reallocation of irrigation water, was in good condition. The more regular flows that the dams have allowed contributed to this as well as creating a thriving agricultural province.

The only way of repairing the damage must start with the government selling back to irrigators the stocks of water that it now owns.

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63 Responses to Murray Darling farming: a victim of green-induced government policies

  1. Pyrmonter

    Alan

    You (and others) have cited measures such as ‘40% of the nation’s farm output’.

    What is the source, and of what is it a measure? Is it value added? Revenue? Volume? And, of that measure, how much is actually irrigated?

    I find it hard to believe that the total value added by, for example, the non-rice grains sectors; wool-growing; the largely unirrigated wine-grape industries; cattle-farming; unirrigated horticulture; dairy and so forth amount to only 60% of value added. It seems an improbably high rate of productivity for agricultural activities conducted in a dozen or so of what are some of the poorest electorates represented in the Cth Parliament.

  2. stackja

    No land, no water! Pay off speculators. And return water to farmers.

  3. Tim Neilson

    loutput

    Not picking on a mere typo Alan, but I think this should go into the Catictionary as “a form of negative output, consisting of activity by “activists” that wastes societal resources and reduces societal productivity”.

  4. Roger

    Some questions for Mr. Littleproud (and Bridget McKenzie for that matter):

    Why is his department the only government department to be a financial member of The Conversation?

    What benefits does this membership provide to Australian farmers?

    Does he agree with The Conversation that voices that dissent from the AGW hypothesis should be silenced?

  5. Pyrmonter

    @ Stackja

    What is it that speculators do? Provide liquidity and determine prices?

  6. feelthebern

    No land, no water! Pay off speculators. And return water to farmers.

    What if the farmers sold their water rights for a tidy sum in the first place?

  7. stackja

    Pyrmonter
    #3178456, posted on October 8, 2019 at 4:03 pm
    @ Stackja

    What is it that speculators do? Provide liquidity and determine prices?

    Water markets and trade
    Water in the Murray–Darling Basin can be bought and sold, either permanently or temporarily.

    This water is traded on markets – within catchments, between catchments (where possible) or along river systems. This form of trading allows water users to buy and sell water in response to their individual needs. Water trading has become a vital business tool for many irrigators.

    The majority of water traded in the Murray–Darling Basin is surface water, however some groundwater also changes hands.

    MDB problem is it does not provide enough liquidity.
    Restricts liquidity to make money for some in time of drought.

  8. feelthebern

    So if I knowingly bought dry land at a pretty cheap price (because the previous owner had sold their high security water licences) do I know get give water rights?

  9. I_am_not_a_robot

    … The Minister attributes this to speculator hoarding together with another villain, climate change, which he says “is leading to hotter days, meaning droughts” … Neither of these factors are the cause of the farmers’ discontent …

    Absolutely, the Minister is talking nonsense.
    The Murray Darling Basin annual rainfall, while very variable from year to year, linear trend since 1900 has actually increased and the pan evaporation (the amount of water which evaporates from an open pan called a Class A evaporation pan) linear trend from 1975 has shown a slight decrease.

  10. feelthebern

    Hmmm….
    I thought BHP had gone as high as it could go.
    So I sold.
    But then BHP kept going up.
    That was ok, because the government stepped in & gave me back my BHP shares that I made the decision to sell.

  11. stackja

    feelthebern
    #3178473, posted on October 8, 2019 at 4:29 pm
    No land, no water! Pay off speculators. And return water to farmers.

    What if the farmers sold their water rights for a tidy sum in the first place?

    What if they used the money to pay for fodder?
    Anyway we will soon be importing food if the drought continues.
    Greens will be happy no more farm animals in Australia.

  12. feelthebern

    The best way to make money in Australia.
    Sit in Sydney or Melbourne.
    Buy dry land.
    Then wheel out every busted arse farmer who hasn’t made money in the last 20 years to complain about water.
    Get water re-distributed, hence giving my dry land, bought for a pittance, water rights again increasing the value of the land (5-fold? depending on where it is).
    Sell land & leave busted arse farmers to be busted again.
    Rinse.
    Repeat.

  13. feelthebern

    What if they used the money to pay for fodder?

    & what it they used the money for anything?
    Why are farmers allowed to get a do-over on dud business decisions?

  14. feelthebern

    Anyway we will soon be importing food if the drought continues.

    & farmers only supply the domestic market?
    Fvck off.
    They sell as much of their stuff o/s as they can if they can get a better price.

  15. Pyrmonter,
    Lot of metrics can be used to examine output but the 40 per cent is widely accepted. Here is an ABS report.

  16. feelthebern

    Here’s an idea.
    Farmers get government assistance for temporary water purchases.
    But then the farmers (regardless of what they produce) have to sell 20% of their output to the government at a 20% discount to the prevailing price.
    How about that?
    A little bit of market intervention on one side of the equation, and a little bit of intervention on the other side too.
    Or do our farming brethren only want the hand out?

  17. feelthebern

    Corporate farming (not factory farming) is the most sustainable form of ag production.
    In the US, approx. 30% of all ag is corporate farming.
    In Oz it’s about 5%.
    The sooner we move the dial towards where it is in the US, we’ll have a more productive ag sector.

  18. I_am_not_a_robot

    Rainfall over the M-D Basin is greatly influenced by El Nino – La Nina cycles in the equatorial Pacific Ocean unrelated to the atmosphere and any CO2 effect; generally El Nino = dryer and La Nina = wetter and that is climate change but not as the Minister intended, I think.

  19. with another villain, climate change, which he says “is leading to hotter days, meaning droughts”.

    This canard again? Look you idiot government types, WARM TEMPS DO NOT CAUSE DROUGHTS.
    LACK OF RAIN CAUSES DROUGHTS, WHICH LEAD TO HIGHER TEMPS due to reduced evapotranspiration.
    If temperatures caused droughts, we’d have droughts ONLY in the summer.
    No clouds = higher sunshine hours
    No rain = dry grounds and foliage = reduced evapotranspiration.
    Both lead to higher temps.
    For the last time, droughts cause higher temps, not the other way around.

    This lie was given prominence by a paper written by that arsehole climate modeller/activist David Karoly.
    His paper was debunked by another paper by Lockhart et al.
    Karoly withdrew his paper and said he’d revise it. Never did (that I know of).
    Karoly would be one of the first I’d string up if I was a benevolent dictator.

  20. stackja

    feelthebern
    #3178496, posted on October 8, 2019 at 4:47 pm

    Australia was built on small farms. Farmers knew how to handle water and drought. Then came government.

  21. JohnL

    The solution is quite simple.
    A person (natural or a company) owns the water license. Water belongs to Crown. Water is a valuable and essential commodity for agriculture production and must create value. Set a value that each hectoliter of water must produce. Set a penalty that a licence holder must pay if he/she fails to produce.
    Water will be returned to producers.

  22. mundi

    Just sell each peice of the river to private sector. You can pump water out if you have permission of that owner.

  23. Tel

    We have wet years, and we have dry years … with more than 100 years of data to back that up.

    The way to make up the difference between wet and dry is this thing called “storage”.

    Allow farmers to build dams and let the water price go up in the dry years and down in the wet years so that the dams become profitable. I should be getting paid millions as a climate adviser. Any government refusing a dam permit needs to be hauled out by their ears. This entire problem could be easily solved in a few decades simply by auctioning off permits to build dams.

  24. A reader

    Don’t forget the bloody SA barrages and their insistence that the naturally saline lower lakes be fresh water

  25. 132andBush

    Corporate farming (not factory farming) is the most sustainable form of ag production.

    Utter fucking bullshit.

    Some of the most industrial scale waste of money can be seen with corporate farming.
    Super money in a lot of cases, so in other words OPM.

    And some more bullshit:
    Get water re-distributed, hence giving my dry land, bought for a pittance, water rights again increasing the value of the land (5-fold? depending on where it is).
    You’re implying the water right would be given back “free of charge”?
    Purchase of permanent water entitlements costs an absolute motza and then you get lumbered with the service charges whether you get allocated ANY water or not.
    I may have misunderstood you, bern but I thought you were better than this.

  26. Alan

    I posted this previously:
    Part 1 – The MDBAs Man-Made Drought
    Part 2 – The MDBAs Zombie Water
    Part 3 – The source of the MDBA problem
    Updated Cth Environmental Water Holdings: 31 Aug 2019 Grand Total = 2,847,612 [Megalitres]
    Water Act 2007 (Cth): Introduced 8 Aug 2007 by Malcolm Turnbull as Minister for the Environment

  27. Can anyone tell us if Malcolm or Lucy Turncoat
    own water for resale please?

  28. feelthebern

    Australia was built on small farms.

    No it wasn’t.
    It was built on importing capital.

  29. feelthebern

    Some of the most industrial scale waste of money can be seen with corporate farming.
    Super money in a lot of cases, so in other words OPM.

    Best farmers I know are corporate farmers.
    Nothing to do with super money.
    If you are good enough, you self fund & don’t need or look for external capital.

  30. Tel

    If you are good enough, you self fund & don’t need or look for external capital.

    Then why start a corporation?

  31. Rob MW

    Corporate farming (not factory farming) is the most sustainable form of ag production.

    Define corporate farming ??

    I’m a family farmer yet my family’s farming business is a registered corporation under the Corp’s Act (i.e – Pty Ltd) does that make me a corporate farmer ??

    Most farms in the U.S. are not the big corporations people think,” he said. “If you look closer I suspect that you will find that the majority of the ‘corporate’ farms are large family farms that found it beneficial to form a corporation.

  32. feelthebern

    Get water re-distributed, hence giving my dry land, bought for a pittance, water rights again increasing the value of the land (5-fold? depending on where it is).
    You’re implying the water right would be given back “free of charge”?

    What price are you saying?

    Purchase of permanent water entitlements costs an absolute motza and then you get lumbered with the service charges whether you get allocated ANY water or not.

    Eh? If you purchase high security water licences, they are perpetual.
    When was the last time a high security licence holder received zero water allotted to that licence?

  33. feelthebern

    Tell me you morons are kidding.
    In the US you form an LLC.
    That goes without saying.
    Sale & lease-backs in Australia are also a fraction of what they are in the US.

  34. 132andBush

    What definition of “corporate farming” are you using?

  35. feelthebern

    No one forced anyone to sell their high security water licences in 2016.
    But they did.
    Why should those people who made that decision to sell at that time, be let out of a sale that was shown to be a tad rash?

  36. feelthebern

    Size.
    Farms of scale.
    Varies from region to region.
    And what is being produced.

  37. Rob MW

    Tell me you morons are kidding.
    In the US you form an LLC.

    Lol…….. so them apples that walk like apples, taste like apples aren’t actually apples there are bananas….right ? FMD.

    I suppose your definition of a moron is a fucking banana that thinks it’s an apple….. right ? Mirror, mirror on the wall………………

  38. feelthebern

    You didn’t sell your water rights did you Rob?
    Make a quick buck?
    Then tell your mates at the local pub, yep sold some.
    Too good to be true….
    Uh-oh.

  39. feelthebern

    My view is that if any farmer sold any of their water rights, they can:
    1) Buy them back at the market price;
    2) Don’t buy them back & plan their year accordingly;
    3) Shut the fvck up.

  40. feelthebern

    I’m a family farmer yet my family’s farming business is a registered corporation under the Corp’s Act (i.e – Pty Ltd) does that make me a corporate farmer ??

    If you’re running a small, loss making operation that was your parents before yours, no that is not a corporate farm.

  41. feelthebern

    I’ve made my views on water clear.
    I just don’t see why the farming community continues to think it should get special treatment.
    If you’ve run a business for 10 years that hasn’t turned a buck, the smart decision is to shut up shop.
    Why should farmers be any different?

  42. Pyrmonter

    @ Stackja

    Australia was built on small farms. Farmers knew how to handle water and drought. Then came government.

    At best half true. Parts of Australia were built on ‘small farms’ – farms often obtained by fraudulent land granting. Much of the country was developed by larger farms, from which smaller farms were sometimes excised. See, for example, chapter 12 of Shann

    Irrigation though has been an overwhelmingly government-sponsored enterprise, dating from shortly before federation. Governments generally expropriated pastoral land; funded the capital outlays on irrigation networks; and even paid for the pumping.

  43. Pyrmonter

    @ Alan

    Your article concerns irrigation. Yet of the MDB, 98% of land is not irrigated. See table 4.19 of the ABS report. What impact has the price of irrigation water on crops like wheat?

    Table 4.22 gives some indication of where water is used productively (ignoring for the moment the problem with using gross values as a proxy for value) – and it isn’t in grain, cereal or livestock production, but in the very fruit, vegetables and grapes to which so many of the agitators for more ‘free water’ (at the expense of environmental flows) object in favour of rice and cotton.

  44. Pyrmonter

    http://catallaxyfiles.com/2019/10/08/92564/comment-page-1/#comment-3178883

    – link is to the Gutenberg version of Shann’s Economic History of Australia, which deals with the perfidy of ‘free selection’.

    I’ll get the hang of this linking thing one day. Promise.

  45. Rob MW

    If you’re running a small, loss making operation that was your parents before yours, no that is not a corporate farm.

    Why the weasel “IF” mate ?? You don’t know, so stfu.

    My Mother & Father incorporated our family farming corporations (yes that’s an “S”) under Commonwealth jurisdiction in 1953 and just before the Commonwealth assumed full control of corporations law.

    You haven’t explained the difference between a U.S SEC compliant “LLS” corporation and an Aust registered “Pty Ltd” and ASIC compliant Corporation ??

    Stop digging mate, just own the fact that you fucked-up.

  46. 132andBush

    feelthebern

    #3178821, posted on October 8, 2019 at 10:33 pm

    My view is that if any farmer sold any of their water rights, they can:
    1) Buy them back at the market price;

    Who the hell says they shouldn’t?!

    Pyrmonter:
    Table 4.22 gives some indication of where water is used productively (ignoring for the moment the problem with using gross values as a proxy for value) – and it isn’t in grain, cereal or livestock production, but in the very fruit, vegetables and grapes to which so many of the agitators for more ‘free water’ (at the expense of environmental flows) object in favour of rice and cotton.

    Where is this “free water” of which you speak?

  47. Pyrmonter

    @ Rob MW

    The Commonwealth seized control of corporate law in January 1991. Before that, the statutes of general incorporation were the various state Companies Codes; before that, the (misleadingly named) state ‘uniform’ Companies Acts (they weren’t uniform).

    @ 132

    I’m not saying there is free water; but that agri rent seekers are after it.

  48. rickw

    Yet another problem built by Government.

  49. feelthebern

    Who the hell says they shouldn’t?!

    Rob.
    He sold water.
    Skited about it at the local pub.
    Now he wants water back courtesy of the taxpayer.
    Hence his anger.

    Here’s an idea Rob.
    You can have the water rights back that you sold.
    But you have to pay back to the state the funds you received, plus interest.
    & y0u can not apply for any government aid again.
    Sound like a good deal?

  50. feelthebern

    Stop digging mate, just own the fact that you fucked-up.

    Who sold their water rights?
    That sounds like a pretty big fuck up to me.

  51. Rob MW

    The Commonwealth seized control of corporate law in January 1991. Before that, the statutes of general incorporation were the various state Companies Codes; before that, the (misleadingly named) state ‘uniform’ Companies Acts (they weren’t uniform).

    Oh, I know, I know, in 1953 the smart ones thought that incorporating in the ACT would bring the Corporation under Commonwealth jurisdiction. I tell you what………… they weren’t wrong !!

  52. Rob MW

    Who sold their water rights?
    That sounds like a pretty big fuck up to me.

    You still don’t know mate, making shit up is not a good look. I’m a dryland broad-acre cereal and pulse farmer & Merino livestock producer mate. From bores, I’ve got plenty of stock & domestic water on the properties that my parents had drilled and paid for, which I’m quite willing to sell to any taxpayer should they run out of their own water, provided the sheep don’t mind. But other than that you’re going quite well for a banana.

  53. feelthebern

    If you didn’t inherit your business, would you have bought it ?

  54. Rayvic

    To stop large amounts of Murray-Darling water being used to keep the man-made artificial lakes filled, the Murray Mouth should be restored to its original environmental state when tidal flows were allowed to travel up to 80 km upriver.
    Farmers who could not continue without that artificial lake water, could of course be paid structural adjustment assistance.

  55. Rob MW

    If you didn’t inherit your business, would you have bought it ?

    Still making shit up mate. I purchased shares in the corporation that owns the family farming business, so, I guess you have come full circle right back the beginning which is;

    “I’m a family farmer yet my family’s farming business is a registered corporation under the Corp’s Act (i.e – Pty Ltd) does that make me a corporate farmer ??”

    Do you still drive that 1976 Datsun 120y ? Must be hard getting into it with that chip you inherited.

  56. Don’t agree with Alan Moran re the trade in water licences. It was obvious that there would eventually be “tears before bedtime” when the full implications of this daft policy were realised. Only total free marketeers & cynical posit takers would not have worried about its long term effects.

    As for the Murray-Darling buyback fiasco – it is one of the few total political blunders of John Howard – & Moran is right about that one. Howard blundered in thinking it would get the Greenies off his back. He ought to have known that they are implacable. They will not thank you for any concession.

  57. “posit takers” should read “profit-takers” !

  58. Stackja:

    Australia was built on small farms. Farmers knew how to handle water and drought. Then came government

    Stackja gets it.
    We’ve done this to ourselves.

  59. feelthebern

    Breaking news.
    Farmer buys shares in holding company.
    What was the stamp duty bill?

    More breaking news.
    Busted arse, dry land farmer wants waters rights gifted to him to increase the value of his land.
    Well done.
    Just be honest about it.
    What next?
    Going to complain about da banks not lending you money?

  60. feelthebern

    “I’m a family farmer yet my family’s farming business is a registered corporation under the Corp’s Act (i.e – Pty Ltd) does that make me a corporate farmer ??”

    I don’t know.
    You’re on your high horse about the farm your parents built, so odds on you are first in line for government hand outs.

  61. Rob MW

    Breaking news.
    Farmer buys shares in holding company.
    What was the stamp duty bill?

    More breaking news.
    Busted arse, dry land farmer wants waters rights gifted to him to increase the value of his land.
    Well done.
    Just be honest about it.
    What next?
    Going to complain about da banks not lending you money?

    This is for the monkey on your back mate: (does the 120y blow as much smoke as you ?)

  62. 132andBush

    More breaking news.
    Busted arse, dry land farmer wants waters rights gifted to him to increase the value of his land.

    Some proof would be good.

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