Australian news, and some related international items

Australia – water ownership and the politics of water

Forget big oil and big energy – on the driest continent, water is the new black

If you accept that food matters, we need to talk about what we want from our farmers, and what we want our regional landscapes to be.  Guardian, Gabrielle Chan @gabriellechan, Sun 8 Dec 2019 

“………When water titles were disconnected from land titles, farmer advocates applauded because it allowed another tradable commodity. But turning water into a commodity has opened the markets to any trader, national or international. The basic rules of supply and demand mean that if you treat water as just another asset and don’t need to grow anything, you can sit on water until supply is short. Like in a drought. What could go wrong?

The thing about markets and their regulators is that they often assume everyone has perfect information. Right now, along the rivers and tributaries of the Murray–Darling Basin, ordinary multigenerational farmers – usually in family structures – are competing with behemoths, with full water-trading desks, and those giants have seen the future. So there is a squeeze between these two groups of farmers, large and small to medium. Adding on other high-industry users like mining, and increasingly, towns are running out of water.

Webster Limited has risen to prominence in water coverage because they have 150,000 megalitres, or 150,000 million litres of water entitlements. Webster is one of the largest irrigated farming producers in Australia. When you eat a walnut, it is probably a Webster walnut, given they produce 90% of Australia’s walnut crop.

Small to medium-sized farmers do a lot of things in a day – farming, trading, hedging, investing – but they are farmers at the end of the day. They are intimately involved in the day-to-day tasks and don’t have legal departments or a genius bar for water analysis. Yet, they have been tossed into what is fast becoming a water war. A 2016 World Bank report predicted: “Water scarcity, exacerbated by climate change, could cost some regions up to 6% of their GDP, spur migration, and spark conflict.” Forget big oil and big energy, water is the new black.

A 2018 study from the European Union’s Joint Research Centre found the five most vulnerable places are the Nile, Ganges-Brahmaputra, Indus, Tigris-Euphrates and Colorado rivers. The study acknowledges that the “combination of climate change and demographic growth is likely to exacerbate hydro-political issues”, and the researchers worry about cooperation between countries. That is the global picture.

In Australia, we have already seen the same issues fracture state relationships and regional communities. Water is fundamentally destabilising electorates for sitting members on safe margins. We are the driest continent in the world. We are a big agricultural exporter. Who wants a bucket of our water? The answer is everybody. In 2019, 10% of Australian water was owned by foreign interests, with the United States and China the biggest of those foreign owners. In the Murray-Darling Basin, foreign interests own 9.4% of water but it is unevenly spread. In the northern basin, the proportion of foreign water ownership is 20.9%. The place to be is at the top of the river.

A more fundamental issue than foreign ownership is transparency in the market. At the time of writing, we can’t see who is trading water – nay, we can’t even see how much water is in the system to know whether it is being traded according to the rules. We can’t see whether the water savings, paid for by taxpayers in the form of water buybacks, or water saving infrastructure exist. Our own Coalition water minister says that 14% of water rights are owned by people who have no land. The ticket clippers.

Then there are inherent conflicts in the system that put the in-betweeners at a distinct disadvantage. Private irrigation companies – formerly government-owned irrigation boards – hold the rights to deliver , regulate and also privately trade in water in an opaque system. The Murray-Darling Basin Authority, the key public regulator in the system, supports basin state governments to implement the Murray–Darling Basin plan and is in charge of compliance. That means the same authority is responsible for managing the politics of the MDB plan and its regulation. This is a conflict of interest, pure and simple. The Productivity Commission report labelled it a conflict and urged the authority to be split in December 2018. Silence ensued……

as a country we obsess about squeezing the last little bit of economic production out of our natural resources without a clear, long-term plan for food and farming in an uncertain global economy and an increasingly stressed environment. So much of the agriculture debate places farming in a single context – either as part of an economy or an environment. It is part of both.

This is an edited extract from Losing the Farm by Gabrielle Chan, Meanjin summer 2019 edition

December 9, 2019 - Posted by | AUSTRALIA - NATIONAL

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