Murray Darling Basin Plan modelling shows socio-economic impacts

IT’s no surprise the economic impacts of water recovery vary markedly from town to town, but fresh insight from the Murray Darling Basin Authority reveals how different methods of water recovery are impacting on the ground.

“The method of water recovery is as significant as how much is recovered,” says MDBA executive director Colin Mues.

The MDBA has a remit to assess the socio-economic impact of Basin Plan water recovery.

A previous study showed an unexpected level of variability in impacts across the Northern and Southern Basin.

Common factors centred on farm mechanisation reducing jobs, regional population changes as well as direct water recovery and public investment in private infrastructure.

The latest study includes a measurement of the regional economy with the Basin Plan and modelling of what the economy would be without it.

“It was clear from our results the impact on communities would have been much larger had it not been for public investment in infrastructure,” Mr Mues said.

While the fruit and dairy producing region around Kyabram-Tatura, Victoria has been buffeted by stormy markets for its major commodities, a significant amount left the district without matching investment.

Before the Basin Plan region had about 400GL worth of irrigation entitlements and 83GL (18 per cent of available water) was recovered for the environment. 75GL was recovered through purchase and 8GL came from on-farm recovery schemes.

Milk production has fallen about 25pc since the turn of the Century - on the back of long-term drought impacts, milk prices and water recovery.

The MDBA estimates the net effect of Basin Plan water recovery accounted for about half the total decrease in milk production (around 11pc) while another quarter of the decrease came through permanent sale of water out of the community prior to 2008 (6pc).

MDBA modelling on milk volumes with and without the Basin Plan process.

MDBA modelling on milk volumes with and without the Basin Plan process.

The MDBA said going by the limited data from the fruit production, the major impacts came from changes to the canned  fruit supply.

Around Benerembah, NSW (taking in an area south west of Griffith) the  Basin Plan was found to have depressed the economy between 6 and 7 per cent.

The ratio of direct buybacks to on-farm recovery was about two to one.

About 12pc of water available to irrigation was recovered for environmental purposes. 16 gigalitres of water was recovered through direct buybacks and 8GL came through on-farm infrastructure schemes - which swap water savings for funding to increase irrigation efficiency.

Predominantly annual crops are grown under general security water entitlements, including cereals and oils, pasture, rice and an growing substitution of cotton for rice.

MDBA modelling of Benerembah with and without the Basin Plan. It shows productivity gains from on-farm schemes helped farmers to increase the area irrigated by around 11pc (measured in rice equivalent hectares) compared to without the plan.

MDBA modelling of Benerembah with and without the Basin Plan. It shows productivity gains from on-farm schemes helped farmers to increase the area irrigated by around 11pc (measured in rice equivalent hectares) compared to without the plan.

“The productivity from on-farm investment kept the area of production at the same level it was before water recovery, which means Benerembah is travelling relatively well,” Mr Mues said.

Contrast that to the cropping and dairying Wakool district, between Deniliquin and Barham, where 80GL went to buybacks and 6GL came through on-farm schemes.

The community saw 39pc of available water recovered and is now doing it fairly tough, Mr Mues said.

The agricultural workforce decreased 61pc, or 158 full time equivalent positions, between 2001 and 2016.

Modelling shows the area under irrigation fell after the Basin Plan, with little on-farm investment scheme uptake in the area and a focus on direct buybacks. The maximum area irrigated fell by about 33pc due to the Basin Plan.

Modelling shows the area under irrigation fell after the Basin Plan, with little on-farm investment scheme uptake in the area and a focus on direct buybacks. The maximum area irrigated fell by about 33pc due to the Basin Plan.

Water recovery led to a reduction irrigation by area around 35pc and the maximum volume of milk production fell from around 7 million litres to approximately 5.5 million litres.

“Even though our analysis shows that water recovery has sometimes had a large impact on irrigated activity, the impacts would have been even larger had it not been for the government’s infrastructure investments,” Mr Mues said.