I am a longtime active irrigator in the Red Cliffs irrigation district in the Sunraysia district in North West Victoria. Currently I grow dried grapes having downsized after selling my wine grape property at Merbein.
As an irrigator and VFF member, I took an active interest along with my fellow growers in water reform as it was progressed by the government, resulting in the unbundling of land from water, water trading, and the development of enhanced water markets.
When the Murray-Darling Basin Plan was agreed to by the states and the Commonwealth in 2012, I saw it as an achievable compromise, a starting point for an environmentally and sociology-economically sustainable basin - if the states followed through on their commitments and allowed the proposed water recovery and removed system constraints as they agreed.
To me it was important that Julia Gillard agreed to buy back (not confiscate) the necessary water, and that efficiency schemes would recover a substantial proportion of the necessary physical water by realising some of the water being wasted in delivery systems and by irrigators on-farm.
An ongoing media pile-on conflating rural decline with the plan, coupled with endemic confusion regarding the elements of water reform allowed the plan to be attacked and successively curtailed, including by the cessation of buybacks, the ending of water efficiency projects and foot dragging by the states in regard to removal of constraints.
Now the federal government has followed up where David Littleproud dropped the ball in 2017 when he failed to follow through on his commitment to achieving the full agreed plan. It has commendably committed to reversing the cutbacks to the agreed water recovery target, and is proposing legislation to enable the resumption of buybacks.
This is politically a hard sell but the government's hand has been forced by the previous actions of ministers in caving in to populist pressure. Ironically the pressure groups, working unopposed in the vacuum created by the absence of an effective counter narrative to their own, have helped create the necessity/rationale for the reintroduction of buybacks.
The government can make a case for buybacks being value for money, powerful economic drivers in tough times, and when investment multipliers are accounted for, delivering a net socio-economic benefit.
They enable irrigators to get enhanced value for any portion of their entitlement they might like to sell, in order to recapitalise and expand their enterprise, and/or make their enterprises more efficient. Previous buybacks are a testament to this fact.
Buybacks are popular with the majority of irrigators who still own some entitlement. It has to be remembered, irrigators do not need entitlement to irrigate, they can operate by buying allocation, and a responsible program, if not subjected to state government interference, could increase the value of entitlement.
A resumption of a responsible buyback program could be worth billions of dollars to the plan for example, as capital would flow into the district and investment and output would soar. Potentially a district could attract more water use than it has notionally lost, especially the major gravity districts, and their overall terms of trade could improve.
The downside could be marginally higher allocation water prices in years of average or low inflows. If the government is successful with its legislation there is scope to retail a buyback program to irrigators in conjunction with a revival of efficiency programs, and uptake could offset buybacks.
Many districts would benefit massively from a resumption of efficiency projects, which although unpopular with some, recover physical water, constitute a valuable subsidy to irrigators, and enjoy irrigator support.
Bill McClumpha is an irrigator based in Red Cliffs, Victoria.