The Federal Government is playing regional communities for fools if it thinks $1.77 billion over 10 years will buy acceptance of what remains a deeply flawed Basin Plan, the Australian Dairy Industry Council (ADIC) said today.

“Today’s announcement is just smoke and mirrors, to distract attention from the fact the Government is yet to deliver an acceptable solution to closing the gap to 2750GL,” said ADIC president Chris Griffin..

“The Prime Minister knows 3200GL can’t be delivered without flooding farms, towns, roads, caravan parks and tourist attractions like the Tocumwal beaches. Raising a couple of low-lying bridges to let more water flow under safely just makes it easier to run the river at the same level that flooded hundreds of homes in Morgan in February 2011.

“So where’s the money to buy the flood easements, build levee banks, and repair roads and eroded river banks after each flood? Without that, today’s announcement is just an expensive way of getting one State over the line for no actual environmental gain.”

Mr Griffin said the Government had to focus on fixing the real problems with the Basin Plan.
ADIC Basin Response Taskforce Chair Daryl Hoey said environmental outcomes similar to or better than 2750GL could be achieved with up to 2100GL in entitlements and at least 650GL in environmental offsets.

“We want a guarantee that the 650GL in environmental offsets will be adequately funded and that the Murray Darling Basin Authority’s models will enable the Sustainable Diversion Limit to be adjusted by the full amount,” Mr Hoey said.

“So far, all we have seen from the Government is a commitment to an adjustment that only goes in one direction – up.

“The fact is that while recovering water through on-farm works is preferable to outright buybacks, it still means another 450GL of irrigator entitlements transferred to the environment. That means less water in the collective pool for irrigation, and higher water prices. All current and new funding should be directed to first closing the gap to 2750GL, including achieving the 650GL in environmental offsets.

“We urge the Coalition, the Greens and the Independents in Parliament not to be railroaded into a quick vote on amending the Water Act and accepting the Basin Plan by the end of the year. We will all need time to carefully consider the detail in this legislative instrument, to make an informed judgement on whether it really can deliver what the Government claims.”

Media Contact:

Chris Griffin, ADIC Chair

M: 0402 846 239

Daryl Hoey, ADIC Basin Response Taskforce Chair

M: 0407 582 982

The Commonwealth and the States risk a big compensation bill for farms, tourism and infrastructure if they pursue a 3200GL water recovery target, the Australian Dairy Industry Council (ADIC) warned today.

ADIC president Chris Griffin said the 3200GL scenario involved more frequently flooding thousands of hectares of farmland, as well as caravan parks, access roads, prime tourism attractions such as the Tocumwal beaches, and South Australia’s holiday ‘shacks’ on the Murray River.

“The impacts are clearly identified in reports by the SA Government, and the Goulburn Broken and NSW Murray Catchment Management Authorities,” said Mr Griffin.

“The inescapable fact is that the Commonwealth and the States will face a hefty bill to buy flood easements on affected properties, and compensate caravan park owners and businesses in tourist towns like Tocumwal.

“And that is even before they get the repair bill for fixing access roads and low-lying bridges after each flood has passed through.”

ADIC Basin Response Taskforce Chair Daryl Hoey said there were smarter ways to achieve healthier rivers and wetlands than just stripping ever larger volumes of water out of irrigation communities.

“We know there is widespread political support for a 2100GL cap on water buybacks and infrastructure savings, plus at least 650GL in offsets such as environmental works and improved river operations.

“This formula will deliver similar or better environmental outcomes – including protecting the lower lakes, Coorong and Murray mouth – than just taking 2750GL or 3200GL of water away from irrigators.

“The MDBA should be forced to get serious about finding at least 650GL in offsets first, so we can close the gap to 2750GL without the need for even more buybacks,” Mr Hoey said.

“The priority should be on delivering this win-win outcome first, and we appeal to Mr Burke to direct the Authority to become part of the solution, not the problem.”

Media Contact:

Chris Griffin, ADIC Chair

M: 0402 846 239

Daryl Hoey, ADIC Basin Response Taskforce Chair

M: 0407 582 982

The Federal Government needs to reveal the deal on the Basin Plan before Parliament votes on amending the Water Act, the Australian Dairy Industry Council said today.

ADIC president Chris Griffin said Parliament and stakeholders first had to be confident that the Basin Plan actually delivered what the ministerial council intended.

“We know there is widespread political support for a combination of up to 2100GL in entitlements and at least 650GL in environmental works and measures,” Mr Griffin said.

“We want to be confident that the Basin Plan and associated documents clearly and unambiguously set out how this will be achieved, before a vote on amending the Water Act.

“We also want to be sure that water saved from any additional infrastructure works will count first towards closing the gap to the 2750GL benchmark, before any is credited towards environmental outcomes beyond that goal.”

ADIC Basin Taskforce Chair Daryl Hoey said the dairy industry was wary of giving the Murray Darling Basin Authority the final say on adjusting the Sustainable Diversion Limit (SDL), given its poor record on consultation.

“Unfortunately, the Authority has a history of making a show of listening, even to senior Basin officials, but then just doing what it wants regardless,” Mr Hoey said.

“It also has a history of moving the goalposts. We are especially dismayed by its attempt to exclude The Living Murray works as environmental offsets, despite telling us all for more than a year that these works would be counted to help reduce buybacks.

“For this reason, any Water Act amendment must require the Authority to do more than just consult with the Basin Officials Committee – it must also comply with reasonable requests.

“We think it is also important that the Water Minister, at least, retains some discretion on SDL adjustments, otherwise the Authority will be even more a power unto itself.”

Mr Hoey also said the SDL adjustment mechanism must allow a plus/minus variation of at least 6%, not the 5% proposed in the amendment.

“Otherwise it is only possible for the surface water SDL to be adjusted by 540GL, not the full 650GL in environmental offsets,” he said.

Mr Hoey explained that the amendment rolled surface and groundwater SDLs together for the purposes of a net +/-5% adjustment, giving a potential variation of 710GL. “But this aggregation is not hydrologically or scientifically sound, and should not be supported.”

He said new measures in the amended Basin Plan that potentially neutralise the capacity to adjust the SDL by the full 650GL must also be removed. Examples include the undefined ‘initial conditions of development’ and arbitrary ‘safety net’ provisions.

Media Contact:

Chris Griffin, ADIC Chair

M: 0402 846 239

Daryl Hoey, ADIC Basin Response Taskforce Chair

M: 0407 582 982

The exclusion of The Living Murray environmental works from the latest draft Basin Plan could cost taxpayers more than $1 billion, the Australian Dairy Industry Council (ADIC) warned today.

ADIC president Chris Griffin said excluding the works meant the Government would have to buy 650GL instead, for no environmental gain.

“This will cost taxpayers more than $1billion, if past buybacks are any guide,” Mr Griffin said. “Not to mention further undermining the viability of irrigation districts and driving up the price of water for those farmers who remain.”

The Living Murray works make up the bulk of the 650GL in offsets proposed by the Basin State ministers as part of an adjustable Sustainable Diversion Limit (SDL) mechanism.

“The offsets will enable similar or better environmental outcomes to be achieved using less water than the 2750GL the Murray Darling Authority wants to recover,” Mr Griffin said.

The MDBA told several parliamentary hearings over the last 12 months that The Living Murray environmental works would be considered as offsets.

But the amended Basin Plan released last week excludes these works, claiming they were already factored into the modelled 2750GL baseline.

ADIC Basin Taskforce chair Daryl Hoey said regional communities were shocked that the Authority could try to move the goal posts at the last moment.

“It seems the Authority is determined to preserve its 2750GL recovery target, no matter what,” Mr Hoey said.

“It is not just the Living Murray works – new provisions such as ‘initial conditions of development’ and targets for the lower lakes have also been introduced.

“These provisions will stymie attempts to adjust the SDL using offsets such as environmental works and improved river operations.

“For the Government, this should be very simple: the more environmental offsets that can be found, the more taxpayers’ money it can save by not having to buy the water from irrigators instead.

“And the environmental outcomes will be similar or even better this way. It seems like a no-brainer.”

Mr Hoey explained that the Commonwealth had paid an average $1700/ML for high reliability and general security water in the southern Basin; these water entitlements are likely to continue being the target of future buybacks.

“So, they could save more than $1 billion if they don’t have to buy 650GL, and achieve similar or better environmental outcomes through The Living Murray offsets instead.” he said.

“We are urging the federal and State water ministers to reinstate the Living Murray works in the offsets equation, and remove the new provisions that stymie any SDL adjustment using offsets.”

Media Contact:

Chris Griffin, ADIC Chair

M: 0402 846 239

Daryl Hoey, ADIC Basin Response Taskforce Chair

M: 0407 582 982

The latest Murray Darling Basin Plan remains an exercise in maximising buybacks and undermining the viability of regional industries and communities, the Australian Dairy Industry Council said today.

ADIC chair Chris Griffin said the dairy industry supported an adjustable Sustainable Diversion Limit mechanism, but not the proposed formula.

“This formula is designed to ensure that any reductions through environmental works will be offset by infrastructure savings,” Mr Griffin said.

“We believe the Murray Darling Basin Authority does not have the will or capacity to resolve this matter and we call on Minister Burke to conclude the discussions with the States in line with the recent consensus document.”

ADIC Basin Response Taskforce chair Daryl Hoey said the MDBA was trying to move the goalposts on environmental offsets and infrastructure savings at the 11th hour.

“It is disturbing that the MDBA is refusing to assess The Living Murray environmental works as potential offsets, despite promising to do so in its hydrological reports1 in February,” Mr Hoey said.

“Equally concerning is that any additional savings from new infrastructure works or on-farm efficiencies won’t count as reductions against the 2750GL benchmark. That leaves buybacks as the only option to close the gap.

“The dairy industry is already facing significant pain of adjustment in water affordability and availability even if the Government did not buy back another drop,” Mr Hoey said. “Yet here we have the MDBA coming up with a formula to support continued buyback tenders.”

Mr Hoey said the dairy industry supported:

• An adjustable SDL mechanism operating within a net range of at least plus or minus 6%, which translated to a water recovery range of 2100-3400GL.
• A 2100GL cap on water recovery in the form of entitlements, including buyback; current and future infrastructure savings projects; and, current and future on-farm works.
• A Commonwealth commitment for no further buybacks before the SDL adjustment review, unless the proposal is community-led, community-supported, and agreed by the relevant State.

• The Living Murray works fully included in the assessment for potential SDL offsets.
• An explicit work program that pools the remaining buyback and infrastructure funding, and prioritises its investment into environmental works and measures, improved river operations, and further water-saving infrastructure and on-farm works.

Media Contact:

Chris Griffin, ADIC Chair

M: 0402 846 239

Daryl Hoey, ADIC Basin Response Taskforce

M: 0407 582 982

The Murray Darling Basin Authority has shown its utter contempt for regional communities with the release of a Basin Plan little different from its damaging 2010 Guide, the Australian Dairy Industry Council said today.

“The new MDBA chair Craig Knowles last year assured regional communities that he wanted to work with them to come up with a Basin Plan that genuinely balanced environmental, social and economic needs,” ADIC chair Chris Griffin said.

“It is just plain insulting for the Authority now to dismiss thousands of regional Australians as having nothing worthwhile to contribute to a Plan that directly affects their economic and social wellbeing.”

Mr Griffin urged Federal Water Minister Tony Burke and State Water Ministers to address the fundamental flaws identified in the draft Plan, and not abandon regional communities.

ADIC Basin Taskforce chairman Daryl Hoey said the Basin Plan released today would remove slightly more water from the southern Basin than was proposed in the Guide 18 months ago – 2289 gigalitres compared with 2274 gigalitres.

“Today’s outcome is a betrayal of the community’s goodwill to give the MDBA another chance to work with regional communities and get this right, after the debacle of the Guide,” Mr Hoey said.

“A cut of this size is as unacceptable now as it was 18 months ago – especially in the face of the authority’s own evidence that similar or better environmental outcomes could be achieved with less water by investing in environmental works and other measures instead of buybacks.

“It is also shocking that the authority has conveniently dismissed the integrity of all socio-economic studies – even its own commissioned studies – that do not support its fanciful claims that regional communities will not suffer any serious or lasting impacts.”

Mr Hoey said he was particularly concerned about misleading information in the socio-economic summary report delivered to the State and Federal water ministers.

He said an example was the claim that irrigators only face a 19% reduction in water, after accounting for infrastructure savings. However, this is a proportion of all water diverted in the Basin, including for Adelaide, other towns, manufacturing and mining, as well as agriculture.

“In truth, the reduction will be about 30%, based on ABS data of actual irrigation water use – and the Government is only targeting irrigators’ water for purchase for the environment,” Mr Hoey said.

“Further, the Authority has failed to tell Australians the whole story by including colour-coded maps showing that the environmental benefits of recovering 2400GL would be little different to 2750GL, according to its own studies.

“The Authority is trying to palm off the hard decisions to the 2015 review, when it knows full well that it is legally locking the Federal Government into buybacks as the investment priority in the meantime. So by the time we get to 2015, the socio-economic damage will have been done.”

Media Contact:

Chris Griffin, ADIC Chair

M: 0402 846 239

Daryl Hoey, ADIC Basin Response Taskforce Chair

M: 0407 582 982

Water recovery targets should be set lower and environmental objectives met by investing in infrastructure and environmental works and measures, the Australian Dairy Industry Council has urged in its submission on the draft Murray Darling Basin Plan.

ADIC chair Chris Griffin warned that the draft Basin Plan imposes unnecessary hardship on irrigation dependent communities, when the MDBA itself recognises that similar or better environmental outcomes can be achieved with less than the proposed 2750GL.

“The draft Plan does not pass the test of being achievable, practical or cost-effective. Furthermore, the plan does not optimise social, economic and environmental outcomes,” Mr Griffin said.

“The Government’s Water Recovery Program, with its heavy reliance on buyback for most of the environmental water, will not deliver communities that are better adapted to reduced water availability.”

“But the draft Plan as it now stands doesn’t have the flexibility for less than 2750GL in entitlements to be recovered, regardless. Without this flexibility, there is no incentive for government to invest in programs other than buybacks when it is needed for infrastructure and environmental works.”

“The Basin dairy industry will struggle to sustain its current size, much less grow and prosper in future, in the face of this double whammy in cost pressures. And when family dairy businesses close down, that means fewer local jobs in processing, transport and service industries.”

Mr Hoey said the environmental water holders must demonstrate they can use the water already recovered without unacceptable third-party impacts such as flooding properties, before any more water is removed from productive use.

In the meantime, the ADIC want the remaining buyback and infrastructure funding (~$2 billion in Water for the Future Fund + $1.4 billion committed for further buyback 2015-2019) pooled and reprioritised. The ADIC has identified a range of projects (outlined in the ADIC submission) utilising this government funding such as on-farm efficiency, irrigation infrastructure upgrades, environmental works and supplementary licences.

Media Contact:

Chris Griffin, ADIC Chair

M: 0402 846 239

Daryl Hoey, ADIC Basin Response Taskforce Chair

M: 0407 582 982

New analysis has proven the water recovery targets proposed in the draft Basin Plan will cripple the dairy industry and its communities in the Goulburn Murray Irrigation District (GMID), the Australian Dairy Industry Council (ADIC) warned today.

The modeling shows milk production in the GMID could dip to drought-like levels of 1.6 billion litres if the Federal Government pursues further general water buyback tenders to meet the 971-gigalitre „shared‟ target in the southern Basin for downstream needs.

The number of farms would also drop to about 1000 in the district, which produces 78 per cent of milk in the Murray Dairy region covering northern Victoria and southern NSW.

ADIC Chair Chris Griffin said the Government should instead focus on environmental works and measures and improved river operations to meet the Basin Plan‟s environmental objectives.

“Dairy farmers were already stretched to the limit adapting to produce more milk with less water, and surviving the drought came at a high price with rising production costs and debt,” Mr Griffin said.

“With the recovery in water storages and improved milk prices, the dairy industry is now in a position to rebuild herds, increase milk production back to pre-drought levels and start paying down debt.

“The challenge with the proposed water recovery targets will be avoiding milk production contracting further from the current, drought-affected level of production.

“It puts pressure on regional processing which is already under-utilising capacity. And in a region where dairy is a high service industry, we will see a domino effect across the community – fewer jobs, business closures, declining population, decreased need for services.”

If the Government stops now with the water recovered through buyback to date in Victoria and infrastructure projects planned and underway, the analysis shows milk production will stabilise around 1.8 billion litres and the number of dairy farms would sit at around 1200.

ADIC water taskforce chair Daryl Hoey said with further productivity gains, GMID dairy farmers could get production back to pre-drought levels above 2.3 billion litres and support current processing capacity.

“But this would require substantial further government co-investment in on-farm irrigation efficiency projects if dairy farmers are to adjust by 2019, given their high debt levels,” Mr Hoey said.

“The Government needs to commit additional funding to extend this program to 2019 to assist farmers in adjusting to reduced water availability under the Basin Plan.”

Mr Hoey said the devastating impacts could be avoided in a number of ways, including government co-investment in irrigation infrastructure on and off farm (including irrigation districts in NSW), strategic buybacks linked to efficiency projects, improved river management to use environmental water more efficiently and investing in infrastructure to improve the watering of environmental sites.

Media Contact:

Daryl Hoey, ADIC Water Spokesperson

M: 0407 582 982

Chris Griffin, ADIC Chair

The water recovery targets proposed in the draft Basin Plan would mean a permanent drought for dairy farmers and regional towns, the Australian Dairy Industry Council (ADIC) warned today.

ADIC Chair Chris Griffin said dairy farmers had already made great gains in water efficiency, but a permanent reduction in water availability on this scale would inevitably lead to severe and lasting decline in irrigation- dependent regions.

“This is not just about dairy farmers it also about milk company infrastructure – milk tanker drivers, milk factory employees, their families and the towns they live in,” he said.

Mr Griffin said the Commonwealth already owned more than 1000 gigalitres of water previously used for irrigation.

“This is on top of 800 gigalitres of water saved before 2009, and there’s even more to come from water saving infrastructure projects planned and underway,” Mr Griffin said.

The dairy industry across Qld, NSW, Victoria and SA will be impacted by the draft Basin Plan, however, the Murray Darling Basin Authority (MDBA) has recognised that the dairy industry in northern Victoria will be among the hardest hit if the Commonwealth keeps buying water to meet the 2750-gigalitre target.

“We urge the Authority and the Commonwealth to use the consultation period to set a sustainable diversion limit that balances the needs of the environment and regional communities,” Mr Griffin said.

ADIC water taskforce chair Daryl Hoey said the water recovery target released today was around 40 per cent of the annual average water used by agriculture across the Basin each year.

“This means permanent drought for farmers and regional towns,” Mr Hoey said.

“The dairy industry wants the Authority to analyse whether the environmental watering objectives can be achieved using the water bought so far and saved in infrastructure works planned and underway. We support strategic water purchases for the environment where they are linked to water-saving infrastructure projects.”

“But there shouldn’t be any more general buyback tenders in the southern connected system before the proposed review in 2015, when it will be clearer whether that water is even needed once environmental works and other measures are taken into account.”

Media Contact:

Daryl Hoey, ADIC Water Spokesperson

M: 0407 582 982

Chris Griffin, ADIC Chair

M: 0402 846 239

The Australian Dairy Industry Council (ADIC) is alarmed about the impact that a carbon price of $23 per tonne will have on the viability of Australian dairy farming families.

Despite the exclusion of direct agricultural emissions and diesel from the Federal Government’s Carbon Tax proposal, ADIC director, Adrian Drury, today confirmed the severe consequences for the dairy industry of this tax.

“The cost to dairy farming families of this carbon tax is estimated to be $5,000 – $7,000 per year. Electricity is a major component of dairy farming operating costs and this tax will have a severe, direct impact on dairy farmers. Furthermore, the Government has failed to recognise that as a trade-exposed industry, dairy processers cannot pass on the costs of a carbon scheme to local consumers or world markets, therefore farmers will wear the full cost of this tax.

“The Prime Minister’s assurances that Australian families won’t be worse off does not seem to apply to the 7,500 dairy farming families. These families face the double whammy of paying the carbon tax as householders as well.” Clearly, although the Government claims it has targeted this tax at the so- called ‘500 big polluters’, it is the family-owned dairy farm businesses that will have to pay.

“A simple solution to this obvious inequity is to exempt or remove the carbon tax on electricity from primary producers and dairy processors” Mr Drury said.

The ADIC is keen to talk to the Government, the Greens and the Independents about the carbon tax and how dairy may access support measures to build some fairness into the equation for the dairy farmers disproportionately impacted by this tax. It is absolutely vital that a fair deal for dairy farmers be achieved. A loss of income of $5,000 or more is simply not tenable for family businesses. The ADIC would welcome specific programs such as the Food Processor and Foundries Fund that go part- way towards addressing the equity in this scheme.

The dairy industry is Australia’s third biggest rural industry and accounts around $9bn in total value to the Australian economy every year. As an industry, dairy is committed to contributing to national efforts to reduce carbon emissions, however this needs to be done in a way that is fair to all Australians, including dairy farmers.

Media Contact:

Adrian Drury, ADIC Director

M: 0428 569 245

The Australian dairy industry is urging the Federal Government to suspend non-strategic water buybacks immediately in the Murray Darling Basin, as recommended by the parliamentary Regional Australia committee investigating the proposed Basin Plan.

The industry welcomed the report by the committee, chaired by independent MP Tony Windsor, and called on Federal Water Minister Tony Burke to act on recommendations to improve the performance of his Department with more timely funding for water-saving projects.

Director of the Australian Dairy Industry Council, Adrian Drury, said the Basin Plan needed to be more than just a scientific experiment in environmental watering on a large scale.

“It also needs to promote regional economic development and growth,” he said. “So far, the focus has been too much on simply encouraging people to leave farming.”

Ultimately, the primary test that the dairy industry will apply to the draft Basin Plan is whether it allows for a vibrant and growing agricultural sector to operate across the Basin. This includes detailed analysis of whether the Plan will facilitate the conditions required for economic growth and the equal weighting of economic, social and environmental objectives.

In particular, the dairy industry supports the Windsor committee’s call for the Murray Darling Basin Authority and the Commonwealth Government to:

• Focus greater investment in on- and off-farm water saving projects.
• Develop a community engagement strategy tailored for each catchment community, with meaningful opportunities for local communities to contribute to the Plan’s design.
• Develop localised and targeted structural adjustment packages, and localised economic development plans supported by workforce development and training packages.
• Focus greater investment into research and development to improve irrigation efficiency.
• Improve the data on groundwater availability, use and connectivity to surface water.
• Apply greater rigour to the assumptions underpinning the proposed sustainable diversion limits.

Mr Drury said the Government’s move to smaller, rolling rounds of tenders for buybacks earlier this year was effectively just more of the same approach taken for the last few years.

“The Government should limit itself to strategic purchases linked directly to water-saving infrastructure projects or community-led decommissioning of channels or districts,” Mr Drury said.

“Further general tenders for water buyback should only be undertaken after water-saving projects are completed and assessed, and the environmental response using the existing pool of purchased water has been evaluated,” he said.

“The Federal Government must also undertake an assessment of practical environmental management constraints, such as the limited capacity to release large volumes from dams for environmental watering events and the flooding risks for private land.”

Media Contact:

Adrian Drury, ADIC Director

M: 0428 659 245