Irrigators snap up allocations

A statement from the CEWH said the money raised from the sale would be used to improve the Murray Darling Basin’s environment.

More than 95 per cent of the water sold was purchased by Victorian Goulburn and Murray irrigators, the CEWH said, with the remaining 1GL sold to primary producers in South Australia.

The CEWH’s activities have been placed under the spotlight in federal parliament recently with calls to improve the flexibility of trading rules to yield benefits for farmers while maintaining environmental outcomes in the Basin Plan.

National Irrigators' Council (NIC) CEO Tom Chesson said his group welcomed the CEWH's transparency around the recent tender to sell the 23GLs.

He said the NIC believed other publicly owned water utilities and environmental bodies would do well to emulate the CEWH’s “good work”.

Mr Chesson said the CEWH now had almost $10 million in its special account and “it was time” the federal government legislated the Water Act Review’s recommendations to allow all those funds to be used to deliver environmental outcomes.

“Given the improvements in allocations in the Victorian Murray Darling Basin valleys since the CEWH's tender there is no reason why more allocation water shouldn't be put out to tender as the environmental reasons for the original tender going ahead are still valid and as alluded to more water is now in the CEWH’s accounts,” he said.

“We also look forward to other government entities such as the Melbourne water utilities putting water they hold on the market to protect the social and economic resilience of communities being hammered by drought and the spectre of a record breaking El Nino event hanging over our heads.”

In a statement, Victorian Liberal MP Sharman Stone welcomed the 95pc of water sold by the CEWH being bought by Victorian Goulburn and Murray irrigators.

She said there was significant interest from the irrigation community with 525 eligible bid offers submitted for the purchase of the share of the water, with the CEWH accepting 53 offers ranging from 30 megalitres to 5111ML.

Ms Stone said the largest purchase of 5111ML by a regional water broker would be distributed among 22 of its clients including 21 dairy farmers in the Goulburn Valley.

“The fact that the majority of water has been sold to Victorian irrigators rather than the ‘big end of town’ speculators is a positive outcome,” she said.

“The average price of $282 per ML is still very high for those dependent on temporary water.

“Hopefully the 45GL obtained through the Pipeline to Melbourne deal, which Victorian Water Minister Lisa Neville has asked Melbourne water retailers to put on the market sooner rather than later, will bring temporary water prices down.”

Ms Stone said the CEWH received $6,458m for the temporary trade of water not required for environmental purposes during this irrigation season.

She said current legislation required the CEWH to use the proceeds from the sale of water to buyback more water for the environment.

But she said the Independent Review of the Water Act carried out in 2014, recommended that funds from the temporary sale of environmental water by the CEWH should be used for additional environmental outcomes from infrastructure works and measures.

Ms Stone said she would continue to work closely with the Federal Agriculture and Water Resources Minister Barnaby Joyce to have the Water Act changed to enable the CEWH to use the revenue from the sale of excess environmental water for infrastructure works rather than further water buyback that only reduced the water available for irrigators.

Mr Joyce said the first sale of Commonwealth water in the southern Murray Darling Basin allowed Victorian and South Australian irrigators and primary producers to purchase much needed water to support farm production.

“I was pleased to see the availability of smaller parcels of water, with a minimum of 30ML giving greater opportunity to small irrigation businesses to benefit from this tender,” he said.

“I recognise that around $282 per megalitre is a high price to pay for water.

“However I am heartened that the bullish soft commodity prices for a number of agriculture industries means farmers still see value in investing in water to grow and finish product despite the price and tough seasonal conditions.

“With ongoing dry conditions across many parts of Victoria, this sale will help give irrigators greater security and stability, supporting productivity and profitability on-farm, as well as delivering environmental and community benefits.”

Mr Joyce said the CEWH using the sale proceeds to fund positive environmental outcomes in the Basin was “a great example of how economic and environmental benefits can go hand in hand and we can manage our water resources to ensure the needs of both irrigators and the environment can be met”.

“We are committed to managing the Murray–Darling Basin with long-term vision to ensure everyone can share the economic, social and environmental benefits of this vital resource,” he said.