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STANDING COMMITTEE ON REGIONAL AUSTRALIA - 25/03/2011 - Impact of the Murray-Darling Basin Plan on regional Australia

CHAIR (Mr Windsor) —I would firstly like to welcome the witnesses from Irrigation Australia Ltd. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. These proceedings are being broadcast and televised on the internet, so for the benefit of those who may be following our hearing remotely, I will ask the members that are here—and there will be a few more coming in a minute—to identify themselves so that people know exactly who they are talking to.

Ms LIVERMORE —I am Kirsten Livermore. I am the federal member for Capricornia, which is in Central Queensland.

Mr SECKER —Patrick Secker, member for Barker. I represent all of the Murray River in South Australia.

Mr McCORMACK —Michael McCormack, federal member for Riverina, taking in the Murrumbidgee and Coleambally irrigation areas.

Mr SIDEBOTTOM —Sid Sidebottom, federal member for Braddon, which is the north-west of Tasmania.

CHAIR —Tony Windsor, the member for New England. The New England electorate encompasses most of the major storages that have an impact on the Darling component of the system.

Ms LEY —Sussan Ley, member for Farrer, the New South Wales Murray and a large part of the New South Wales Darling.

CHAIR —There will be members coming and going through the morning for those who are attending. We have received a submission from your group and we thank you for that. Would you like to make some opening statements, or you may have some additional submissions that you would like the committee to have, but we would prefer you to make some opening statements, if you would, and then allow the committee to question you.

Mr Toome —The position that Irrigation Australia is coming from is that our primary focus is on sustainable irrigation. We do not profess to represent the allocation holder. We do not hold the allocation holder as part of our constituency. Our charter is to service the value chain that makes up the irrigation industry from the research community, the manufacturers, distributors, installers, designers: the whole chain of people that support the end user farmer. Our mission in life is to provide through that sector equipment and practices that allow farmers to irrigate sustainably, so our role is to not argue for how much water or how the water should be distributed but for how it should be used in terms of generating maximum water use per productivity, making sure the irrigation practices are sustainable and ensuring that we have a viable irrigation community going into the future.

Mr Le Breton —Further to what Peter has just said, we see ourselves fit in as part of the solution to the problem, not necessarily, as he was saying, in terms of the allocation. Ultimately, without the irrigator having water, our people have nothing to design, nothing to install, nothing to sell. But, at the same time, when it gets to the point of how efficient those irrigators could be with the allocation that they end up with out of this, that is where we can add value to the Commonwealth; to make sure that the money that is allocated to that program is used as sustainably as it can be and to make sure that it is continually maintained. That is part of the issue that comes out in the paper: it is not so much about the money that is spent initially; it is about how we continually maintain that equipment once it is installed and the people that are operating that equipment have the knowledge to make sure that they maintain it over a period of years to get the maximum out of it.

Mr SIDEBOTTOM —Thank you for your submission. I found it very informative and it certainly raised a number of areas that I had not been thinking of. I would like to refer to recommendation 4 in your submission—that is on page 10. If I may for the record just highlight that. You recommend:

... that the Committee support a call for all reasonable water savings from environmental works and measures, environmental watering plans and improved water storage management, to be determined and accounted for in environmental water needs prior to setting SDLs in a Basin Plan.

Would you like to elaborate a little bit more about that? By that I assume that there is an inference that of course they seem to have put the cart before the horse in terms of determining SDLs.

Mr Toome —I think part of the issue is to make sure that similar rules apply to every area where water is used so that if we are managing the basin, we are managing all allocation, all take, all use with similar rules. The aim is to try to make our take of water for environmental use as efficient as possible, so if we need water delivered down the river system to meet an environmental need we try to tie that with a time of high flow for irrigation use. The water that is used to transport and deliver water downstream requires fairly high flows down through the system, so if you are maintaining high-delivery flows to meet irrigation needs it makes sense to piggyback environmental flows on the back of those. So the shared management of the environmental and consumptive resource is fairly critical.

When delivering water for environmental flows, there has been a typical reliance on over-the-bank flows: if you are delivering water to a wetland or to an area that is getting treatment, the simplest way to deliver it is to wait until the river system is high enough to flow the water out over the banks. With a fairly small amount of infrastructure spending, you can deliver that water at much lower flow regimes by pumping water into the environmental assets so you are not having to do it at a time of high flows; you can coordinate it with other flows. So it is a matter of making sure that we manage all those environmental needs as efficiently as possible. We are not going to get into the debate of how much is required for the environment; more so, we are just trying to make sure that the same principles are applied for every water allocation, every water take. Hopefully, that explains that issue.

Mr SIDEBOTTOM —Yes, thank you.

Mr SECKER —Do you run a league table of the most efficient areas in Australia and the least? If you have got those that are least efficient, do you have some plans whereby those can become more efficient to make water savings?

Mr Toome —It is very interesting to see both yourself, Patrick, and Tony Zappia as South Australians and I am a fellow South Australian. We claim to have some of the best irrigation practices in South Australia, with our Murray irrigators, but we also have some of the worst irrigation practices. Some of our irrigation practice in the south-east, where we are pulling from confined aquifers, are dreadful and are probably our nation’s worst case as well as best case. There are some best-case irrigators in the south-east. But I do not think we should try to single out any one area or any one location. Our aim is to just try to bring people up to best practice.

Mr Le Breton —I spent the last two days in Tasmania, just observing what the TIDB is doing down there. Mr Sidebottom is probably familiar with their approach. The thing that hit me, over the two days, was the different approach that Tasmania is taking to the issue to what has happened on the mainland. I would recommend that you spend a bit of time with the TIDB and just have a look at the approach and the steps they have taken, to look at the soil profiles, to understand what can be grown, where it can be grown, how much water it is actually going to take to grow those crops, to take the conservation movement’s view that they are all part of the same issue within that community, to get buy-in; that you cannot actually use the water until you have achieved and ticked off certain elements as you go through it. To me, it just seemed to be very sensible and sound and everybody appeared, at least on the surface, to be quite engaged in what they were doing down there.

In terms of a model of how it may work from a best practice point of view, we are obviously going to be actively involved in encouraging that to continue. We have got our national conference on down there, in August this year, where we will be asking those growers about their experiences and to present what that has actually meant. We are also encouraging representatives from the Commonwealth to come down and address what is actually happening in terms of water management within Australia.

In reading the draft plan and then looking at what they were doing down there, they just seemed to be almost in opposite directions in terms of the approach they were taking, but one that was totally sound and moving towards it. And I am not saying that because you are sitting there

Mr SIDEBOTTOM —No.

Mr Le Breton —I have only been in this role as acting CEO for about the last six weeks. Getting into what our members are doing and where everybody was, everybody was working together, everybody was excited about it, and there did not seem to be anybody detracting from it. The approach you would have taken and the things we have seen in the media about how irrigators have reacted to what is going on—I mean, they are not overjoyed about the money that they are going to pay for water down there, but they understand the long-term commitment they are making to it. But the more important thing is that they are understanding what efficiencies can be gained by working collaboratively and I think that was the message that I have taken away over the last two days.

Mr SECKER —Whilst your comments about the south-east may be correct in some places, we are concentrating more on the Murray-Darling Basin and the river systems. I know there is some connection between underground aquifers within the basin, but have you identified any areas, at a reasonable cost, that save quite large or even moderate amounts of water through infrastructure, basically, or better practices?

Mr Toome —Yes, certainly through better practices. There are areas with large amounts of surface irrigation, and surface irrigation probably stands to gain the most from investment on improvement in management practices. That gets back to the first question of whether it is actually viable to surface irrigate on some of that land, and, if it is soil that is suitable for surface irrigation, making sure that all of the infrastructure requirements on that land are as efficient as possible to deliver the water as efficiently as possible.

If the soils and the infrastructure requirements are not satisfactory on that land, then they need to consider alternative irrigation systems, so a movement to pressurise the irrigation systems or a movement away from irrigation on that land. There are certainly opportunities there and there are certainly instances where our irrigators who are using pressurised irrigation systems can make reforms. Probably, as a wholesale area for change, putting some attention to the surface irrigation districts is an obvious area where we can make large-scale improvements.

Mr SECKER —When you say surface irrigation, is that flood or—

Mr Toome —Flood irrigation. We have got irrigation bays, check bays, border dykes, all of the various methods of surface irrigation. What we would raise as a fundamental question for the committee, and for SEWPaC and the other government departments that are looking at on-farm infrastructure spending, is that there has been an automatic assumption that spending money on on-farm infrastructure would generate the right outcomes.

We have been arguing for best practice to be locked into that whole process, but what we are starting to see is evidence that on-farm infrastructure spending may not be the best way to deliver the outcomes. If we just continue to spend on projects on farm for the sake of it, are we addressing all of the fundamental issues of whether that farm business is sustainable, whether it can be made profitable? Are we spending money on a business that might go broke again in 10 years time or might not be sustainable?

With that background, the issue we would raise is: are there other ways of achieving the same result? It may be better to invest an amount of money on farm advisers, on agronomists and consultants, who then are embedded and work in those local communities, who take charge of leading a group of growers through the process of modernisation. If that means infrastructure spending on that farm, then it would be better to have that on-farm infrastructure spending justified and paid for by the farmer who is going to get the end benefit, in the full knowledge that that spend achieves a good outcome.

The question for us, as a body that works heavily with the research and development community, is that we have done an incredible amount of irrigation research in Australia and we have volumes of R&D on products and services that can be used to increase irrigation efficiency, but, by nature, those in the farming community are often conscious nonadopters of technology. There are lots of reasons why they tend not to take up new technologies and a lot of it comes back to the implicit risk involved with change.

We need to address all of these reasons why people do not adopt all of the technologies and practices that are out there and it comes back to getting rid of this perception of risk. Our thinking is that one of the ways of reducing that risk is to provide partners for people so that they can actually work in a long-term relationship over a 10- or 20-year period to improve on farm practices.

If we go out to a farmer and preach improving their irrigation practices, we might say, ‘You need to spend $3 million on a new irrigation system,’ but while the farmer is installing that new irrigation system, is it taking time away from their nutrition management, from their crop management, from all the other things that they have to do? That profile of putting all of your effort into one area at the cost of others is part of this whole risk aversion process.

With consultants embedded in these local communities walking groups of farmers through a progressive phased change, we may in the long term achieve much better results. We would really throw that out to the community and to the government as an option of maybe achieving better long-term outcomes. It may be possible to have a 10-year phased plan, where we look at funding this extension adviser community over a 10-year period, where we work from a point of five years of, say, subsidised performance and then a five-year glide path down to zero subsidy so that at the end of a 10-year period you have this network of embedded advisers working closely with growers, but over that period they have got them to the point where they value the services enough to be willing to pay permanently for those advisers to stay with them.

To us, it is another option to throw into the mix, to say, ‘How can we achieve those outcomes that we are trying to achieve?’ We have seen that spending on infrastructure can generate perverse results, so we are saying, ‘Is there another way of achieving results in the long term, without just continuing on with a program of subsidising infrastructure?’

CHAIR —Are some of the irrigation districts members of your organisation?

Mr Toome —Yes. We have a number of organisations—Goulburn-Murray Water, SunWater, a number of the large rural water authorities—who are members. They tend to split their membership between the National Irrigators Council and Irrigation Australia, depending on whether they see themselves as a water provider or somebody providing services to the irrigator.

Mr Le Breton —Yes, exactly. For a lot of the Murray and the Murrumbidgee irrigations the clear choice has been: ‘Well, we need to secure the water first and we’ll work in partnership with IAL over here in terms of making sure that the people’—you know. So there is still a relationship there, but their key focus is to secure the water. We support that and what they are doing to a point because it creates that hole in part of the stream, but a number of the larger water authorities like SunWater and Goulburn-Murray, State Water New South Wales, as Peter said, they are all active members. In fact, representatives of those organisations all sit on our board.

CHAIR —There has been quite a lot of criticism along the valley, as we have travelled around, of the Swiss cheese effect and the impact it has on the fixed-cost structures of some of the irrigation districts. The minister has partly—we hope on our advice—moved away from that and is looking to a more strategic approach in terms of the irrigation districts, so that there may be areas that can be taken out of production that will benefit the fixed costs to the districts themselves and give more viability into the future. Have you got any views on that? Are any of your members suggesting that there are certain segments of irrigation districts that could be retired and achieve benefits for the others?

Mr Le Breton —Not so much about that, but the thing that I would just like to say is that when people talk about the irrigation industry, they tend to think about the irrigators. They are the people, at the end of the day, whether you call them an irrigator or whatever. I spent some time with the Tasmanian farmers during the week. They would like to see themselves either referred to as farmers because they are doing a mixture of things or, as other people in the industry refer to them, as growers.

There are definitely those people that sit as that part. But there is a thing called the irrigation industry and we would like to think that the members that we represent are a very large and significant part of that and throughout this whole debate they have been pretty much forgotten about. They are the people that live in those rural communities; they are the people, like Peter, that sell things to the industry to actually make it more efficient; they are the people that run the local store that actually provide services within that community; they are the people that without all of these things will actually move away, because they will not have an option, but their businesses will fold. That is what we are really trying to achieve through this: to make sure that the people that remain in town to provide those services are there for the long haul and that they work in conjunction with those farmers to get the maximum out of those properties that they operate.

There is evidence to show that they do not need as much water as perhaps they are using now. That is not to say that we are saying reduce what they are getting, but let’s use what they are getting and the amount they get and let’s use it as efficiently as we possibly can. It is that debate. I know when the minister refers to the national organisations, he refers to the NIC and he refers to the NFF, and it is perhaps fair that they have been a lot more vocal in that. We do not take that political stance in terms of the way that we go about our business, but we would like to make sure that this committee understands that we are part of the solution at the end of it because, when they do get the water that they get, it is our members that will provide that infrastructure and make sure it is maintained throughout.

Mr Toome —In relation to the crux of the question, it becomes a social issue, and then the issue of determining whether water will continue to be provided or not be provided has to be made in terms of, yes, the efficiencies of distributing the water, but also in consideration of the social impacts of those changes. So a fourth generation farmer who is told that they are on the end of a spur channel that is being abandoned is obviously going to rail against the decision to close that spur channel, because you are saying, ‘Here you are. All of your friends, your family, your whole lifestyle revolves around that little community district that you’re in. You’re being told to pick up and move to somewhere else completely out of your comfort zone.’ So I think it is important that the social costs and the social issues get included into those decisions.

Goulburn-Murray Water are going through that exercise now of reviewing all the areas that they supply water to. They are cutting the number of channels to around 50 per cent of the length of channel that they operated, and they are going to face, very strongly, that issue of the impact on the end irrigator of the decisions they make to close the channels. They are trying to work as closely as they can with the end farmers to try to get that issue resolved without too much conflict, but it is inevitable that there will be some conflict as a result and people who will feel hard done by. But I think we have to make sure the social impact is considered in all of those decisions.

Ms LEY —Do you have a view on how the metering reforms are going?

Mr Toome —Yes, very strongly, because I have been involved in the metering side of the picture for probably five years. There has been a hold-up with the metering reforms from the viewpoint of our ability to implement the standards. The standards for water meters require pattern approval of meters and we needed to get in place a network of approved, accredited testing laboratories to be able to test the meters and approve them before they could be sold, in line with the standards. So the lifting of the exemptions on water meters for irrigation or non-urban flow meters has been held back until the supply chain is sufficiently primed with approved meters. There has been a long delay in that accreditation process and in the process for manufacturers to get their meters approved. One of the things that needs to be looked at is that the current rules that govern the approval process will only accept test reports that are completed in Australia. So one of the options is to open this out to test reports that are completed overseas to speed up the process to get approved meters out there into the system.

Ms LEY —How far is this behind from previous government announcements?

Mr Toome —At the moment I think we are probably 18 months behind where the process should have been and there is a continuing running watch on the process to see when those exemptions can be lifted.

Ms LEY —Whose responsibility is it to lift the exemptions?

Mr Toome —I think at the moment it sits with SEWPaC.

Mr Le Breton —I know they are working through the Australian standard at the moment. The draft standard has been developed and they are now about to accelerate that to get that finalised with Standards Australia.

Ms LEY —Given that we are never going to be able to accurately determine how much water is in the system unless we have meters that work properly, do you have a view on the fact that this is nowhere near in place and we are already 18 months behind?

Mr Toome —There are two things I would like to offer on that. Firstly, yes, I agree that we need that information to inform the picture. The Bureau of Meteorology is charged with the process of generating the national water accounts and we have a commitment to meter all extraction or consumptive use for irrigation. Until we get all that information into the model, we have only the supply side monitored and not the demand, the consumption side. So, yes, I agree it is incredibly important that we get the process finished and we need to look at what other things we can do to speed the process up.

To sort of roll that picture up, one of the things that we would like to have considered is a way of improving the quality of the water debate. At the moment we have a lot of argument going on about taking water from irrigators, but at Minister Burke’s roundtable with the irrigation sector last year he actually asked, through the National Farmers Federation and the National Irrigators Council, ‘How much water do you actually need?’ That is really a fundamental question for all of us. We have these issues of allocations and over-allocations, but we do not really have a good hold on what the actual water requirements are across the districts, across the basin, if everybody was at current best practice.

So we will put a proposal together to ask for funding for a study to look at—given the ways we have got of benchmarking crop water use and given allowances for things like a leaching fraction to leach salt through the profile and a fraction to allow for delivery losses—what sort of water allocations you need in each district to grow the crops that are being grown, and to then aggregate that back up for all the farming districts based on maximum planting area in times of maximum flows, to minimum planting areas in minimum flows, and to say, ‘That is actually our aspirational target for how much water the irrigation industry would need.’ We can then provide that as a feedback into the supply side of the equation. That would act as a good proxy for the period until the metering gets up to scratch. Given that you have fairly large fleets of existing meters in some areas and it is going to take five, seven, eight years to roll out new meters into those areas, no matter how quickly we track the rollout of the standards there is going to be a long delay before we get the whole picture into place. We see this as an opportunity to plug that gap.

CHAIR —Any final questions?

Mr ZAPPIA —Peter, could you just elaborate for me what you meant by the irrigation system in the south-east being, I think you said, inefficient?

Mr Toome —I think all I was pointing to was that we have some fantastic irrigators in the south-east who are at best practice but we also have some who are definitely at nation’s worst practice. I often fly the flag for South Australia’s Riverland irrigators, saying how great they are and how wonderfully efficient they are. Somebody will say, ‘Yes, but you’ve got also some inefficient irrigation in the south-east.’ My aim is not to highlight bad irrigation but just to say we have examples of best practice and worst practice in our backyard.

Mr ZAPPIA —My question was not trying to pick on anyone in particular. What do you mean by ‘bad practice’? What sorts of things are they doing that you think is bad practice?

Mr Toome —It is one of those examples in areas of confined groundwaters where, if you irrigate and over-irrigate, you get drainage back through the profile and that drainage water ends back in your aquifer that is supplying the water. Over a period of time, if you are over-irrigating, you are increasing the build-up of nutrition and fertilisers that are leaching through into the groundwater, so you are impacting on the quality of the groundwater. If you took it from the viewpoint of water loss, you are not losing water, because it is cycling through the system, but the downside is that you are contaminating the water with nutrients and things in the loop.

Mr ZAPPIA —That is the sort of thing you are talking about?

Mr Toome —That is the sort of example, yes.

CHAIR —Thank you, gentlemen. We might conclude there. Thank you very much for taking the opportunity to come along today and for the very good submission. If there is any additional information, particularly given some of the questions, that you would like to provide, please do so.

Mr Toome —All right.

CHAIR —There will be a transcript of what has been said today and if there are any issues with that, you might let the secretariat know.

Mr Toome —Fine.

CHAIR —Thank you very much.

[10.03 am]