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Rudd's food production: destroying water buyback.

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The Hon Dr Sharman Stone MP Shadow Minister for Environment, Heritage and the Arts Shadow Minister for Indigenous Affairs Federal Liberal Member for Murray

Tuesday, 15 July 2008

Rudd’s food production-destroying water buyback

The release of the latest CSIRO Murray Darling Basin Sustainable Yields Report should prompt the Rudd Labor Government to divert its water buyback away from so called ‘willing sellers’ and instead to target over-allocated licences, if it is to have a positive impact on the health of the Murray Darling Basin river network.

The Rudd Labor Government’s intervention into the irrigation water trading market has grossly distorted the price of water, jeopardising future food production and prompting social, economic and environmental stress in regional communities.

According to Dr Sharman Stone, Shadow Minister for Environment, Heritage, the Arts and Indigenous Affairs and Federal Member for Murray, most irrigators in New South Wales and Victoria have been on zero allocations or a fraction of their normal supply; next season will see zero allocations once again.

“The Rudd Labor Government has already dumped $50 million in the open water market and is now putting $3.1 billion on the table. This market intervention has grossly distorted prices, forcing farmers to yield to the pressure of their lenders by selling their water rights and so too their future means of production.

“The accumulated debt of five or more years of drought sees most primary producers in a position of financial stress. Once irrigators are forced to sell their licences their future capacity to grow food when it rains again is, in effect, ended.

“The intensive food manufacturing sector in northern Victoria which has provided thousands of jobs beyond the farm gate and billions of dollars in domestic and export earnings annually is now facing critical decisions about sourcing key ingredients for their

products from overseas.

“Ingredients for everything from soups to juices, baby foods and convenience foods, are now a combination of ingredients from China, USA, South Africa and elsewhere.

“For example, there were 11 world-class process tomato growers in northern Victoria supplying the local food manufacturing industry. Last year, only one produced a crop. The other growers found the value of their water driven up so high by the distorted market that it paid for them to simply sell the water and take a holiday.

“The Rudd Labor Government must immediately quit the open water market and instead reinstate the Howard Government’s policy of only offering to purchase water in targeted, over-allocated streams.

“While the State and Federal Labor Governments may not be alarmed at increasing dependency on imported foodstuffs, this is quite clearly an area of grave concern both for the future health and wellbeing of Australians and for our natural environment.

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“Without proper management of the natural resources of the Murray Darling Basin, and a reliable supply of water, the prices paid for food in the future are likely to skyrocket. Despite the drought, food producers and irrigators have continued to battle to keep the biodiversity, vegetation and water quality healthy and managed carefully for a time when the drought breaks”, Dr Stone said.