A new benchmark environmental water payment of effectively $4000 a megalitre offered to small irrigators this week may herald a long-overdue breakthrough in the Federal Government’s beleagured campaign to buy substantial volumes of water.
For the first time since launching its widely-criticised $3.1 billion buyback, the Government has offered a combined package which addresses calls for some form of structural adjustment by incorporating an additional payment over and above the market price of water, in this case a $150,000 irrigation exit grant.
Federal Water Minister Penny Wong announced on Saturday that eligible irrigators on less than 15 hectares who sold their water into the environmental buyback and got out of irrigation would be paid the grant.
Industry sources say as most of those likely to qualify have holdings of around 100 megalitres, the $150,000, taken on top of a market price of $2500/ML would equate to around $4000/ML.
The package is expected to secure 48,000ML of water, but with SA allocations on 11pc this year and some water already used or sold, is unlikely to provide any substantial relief to the lower lakes in the short term.
Irrigator groups said although the grants were still a scattergun approach, ill-defined and only available to small irrigators - primarily Riverland and Sunraysia grapegrowers and some stone fruit growers - the willingness to combine different programmes with complementary aims to add up to a market premium price was “a step in the right direction”.
Victorian irrigators immediately said if the Federal Government offered a similar price to larger irrigators, many would be prepared to hand over water and go back to the table to discuss relaxing the four per cent annual trade limit which currently stands in the way of large scale Commonwealth purchases of Victorian water.
Victorian Farmers Federation water spokesman Richard Anderson said a mix of buyback plus on farm infrastructure investment which added up to $4000/ML would allow farmers to lift water use efficiency and maintain or boost productivity using less water.
“Market price alone is not enough,” he said. “There is no reason why they couldn’t combine the $5.8bn infrastructure money with the $3.1bn buyback.
“If they offered $4000/ML I’d be quite happy to hand over 50ML and spend the money on farm. I could put in a totally automated system to match the automated food bowl system. Those systems are there, but they are out of reach of the average bloke.
“I would stay in irrigation, my productivity doesn’t drop, the local factory doesn’t have to close, the local businesses stay open because I am still buying and the towns don’t need structural adjustment.”
Victorian farmers have strongly opposed any early lifting of the 4pc annual limit on permanent trade in a bid to protect districts from the unplanned, scattergun effect of the buybacks.
But Mr Anderson said he believed farmers would support water sold into a combined buyback/investment package being treated as outside the 4pc limit and available to the Commonwealth.
“You would have to leave the 4pc in place for the scattergun buying,” he said. “But water taken through this sort of scheme could be outside that.”
The exit grants are understood to originate in a call by the Riverland Winegrape Growers Association to relax Exceptional Circumstances requirements that farmers sell their farm to qualify for the $150k exit grants.
Irrigators do not have to sell their farms to collect the latest grants, but would have to get out of irrigation.
RWGA executive officer Chris Byrne said there was no market for the properties and grapegrowers wished to stay in their homes. Most would use grants to retire debt.
Nearly 90pc of the association’s 1200 members have holdings of 25ha or less and 61pc have 10ha or less.
Mr Byrne said the grants were “on the face of it very good news, but it is too early to say as there is no real detail”.
The EC grants are means tested, reducing after net assets reach $350k, but Senator Wong’s office was on Tuesday unable to confirm if the same test would apply to the new grants.
“More details regarding eligibility criteria, guidelines and how to access the grants will be announced within the next month,” a spokeswoman said.
Full story Stock & Land September 25
Email a friend
Favourites
Del.icio.us
Facebook
Digg
StumbleUpon
MySpace
Reddit
Newsvine
LinkedIn
Kwoff