There is a considerable interest in water in the Murray Darling, an issue that I have written about over the two decades during which concerted attacks on irrigation took place.
Most of my articles and reports, including my latest piece in The Spectator, drew attention to the effect of taking water for environmental and other reasons from irrigators. Recent activity by farmers has given the matter some considerable profile and Alan Jones addressed it as did Peta Credlin.
The truth of the Murray Darling is that the highly irregular river flow became a working river during the twentieth century and the previously low productivity region was transformed into producing 40 per cent of the nation’s agricultural produce.
Then came claims by a group of environmental activists, the Wentworth Group including David Karoly, Tim Flannery, Anna Skarbek, who said that salt infusion caused by irrigation was crippling the region. Naturally the ABC uncritically adopted and magnified this absurdity, which nobody now takes seriously. An outcome was John Howard establishing federal intervention, taking some 450 gigalitres off irrigators, designed to placate the activists’ demands for 1,500 gigalitres. Irrigators’ water comprised 11,500 of the average flow of 34,000 gigalitres.
The bureaucratic infrastructure was in place to expand this. Then came the global warming scare, with the 2008 Garnuat report claiming that the area was certain to run out of rain and water generally so we’d better get used to it and stop all irrigation. The Garnaut report was in fact written by a Treasury officer, David Kennedy, who Josh Frydenberg has recently appointed as Treasury Secretary.
Under radical environmentalist Tony Burke, the stakes were raised and 2750 gigalitres were to be either bought from irrigators or created (by water saving expenditures). Taking 20 per cent of a vital input into farming means less of the output at a time when the government was proclaiming a new dawn in demand for farm produce from the burgeoning Asian economies. Naturally, the environmental activists cared not a jot for this.
The squeeze on supply brought a tenfold escalation of prices. Unfortunately, the farmers are blaming the “speculators” for the price surge. They are joined by the ACCC, ever on the lookout for more areas where they can inject some regulatory intrusion, and by the utterly incompetent Minister David Littleproud desperate to find a culprit.
The water has formally been made tradeable (it actually always was but in an informal way) so that the water and land rights are separated. This clearly irks the established farmers but, as their leaders grudgingly admit, can lead to a more efficient use of the water.
The upshot of farmer agitaion and political backside covering is likely to be various restraints on trade and attacks on the speculator. These will not alleviate the underlying problem caused by government action to restrict supply. Indeed, by inhibiting water trade the new measures are likely to aggravate the problem. But they will leave many parties with a smug satisfaction that something has been done while the basic bureaucracy to continue eroding the productive use of water remains in place.
So we have yet another regulatory measure that once created cannot easily be undone and is likely to grow to the detriment of the nation’s productive activity as well as the well being of the community most directly involved.