Great Water Debate speech
I don't think the use of a voluntary buy back of water licenses is the right way to solve the problems in the Murray-Darling Basin(MDB). A more strategic approach is needed. We need to reduce the total amount of land under irrigation in the MDB and the best way of doing this is to target those areas where the production from irrigated lands is either of low value or inefficient in the conversion.
According to the Murray-Darling Basin Commission the highest value use of water is actually for production of fruit and vegetables while the lowest is pasture.
We need to understand that the pressure for the increasing irrigated lands comes from the increased importance of agricultural exports to the Australian economy. Agriculture exports were required to help offset the balance of payments problem created by the lost of local manufacturing industries and the increased reliance on imports. Without agricultural exports the balance of payments would have been far worse.
According to the latest ABS figures the MDB contributed $15 billion or 39% of Australia's gross agricultural production in 2005/2006. $4.6 billion of this was from irrigation.
Interestingly, although MDB contains 65% of all the irrigated land in Australia it only contributed 44% to the value of total irrigated production. This means that a lot of low value activity must be occurring in the MDB.
Of the irrigated lands the highest number of hectares (43%) is used for pasture while land used for fruit and vegetables only account for 7%.
The amount of land used for irrigated pasture can be reduced at a lower cost to the economy than any other use.
I believe that a better approach than voluntary buy back of licenses is to implement a scheme along the lines of the Conservation Reserve Program used in the USA where farmers are provided with an income stream (rental) for the land they take out of production. Effectively paying them not to farm the land. This income stream can continue for up to 15years. We can use the same approach to pay farmers not to use water.
I think a scheme which replaces the lost income while dry land farming practises are adopted will return more water to the Murray-Darling system quicker than the current proposed scheme.