Is This The World's Most Expensive Water?
By Sharona CouttsMay 31, 2012
Within the nationwide debate about the Murray-Darling Basin plan, one bitter dispute involving old friends turned adversaries, environmental destruction, and $83 million shows just how complicated it is to do the right thing with scarce water resources.
Peter Morton is a wheat and sheep farmer who hunts ducks, makes a few dollars selling red gum wood, and flaunts his political incorrectness. When asked what caused the scars that dot his work-worn hands, the 61-year-old's eyes twinkle, he pauses for effect, and says, "Abo-bites," and laughs.
He'd never call himself one, but considering his recent actions you'd think the guy was a greenie. He's spearheaded the rehabilitation of a lake near his property in Balranald, in southwestern New South Wales, which has seen the return of thousands of native birds. He voluntarily put aside portions of his land for regeneration of native habitat. And now he's fighting against what he sees as an environmental scandal taking place near his home in Balranald, involving Canberra's controversial $10 billion plan to restore the Murray-Darling basin.
On May 28, the Murray-Darling Basin Authority released an update to its plan to save the river system. Upstream and down, farmers, environmentalists, communities and state governments are at odds — even preparing a High Court challenge — over whether the plan would take too much, or too little water, from their particular part of the river system. The trouble in Morton's town shows how the conflicts are playing out at a local level, intensified by the sudden availability of billions of taxpayers' dollars. This particular conflict also exposes the potential, and the pitfalls, of the government's attempt to save our most important rivers.
The bitterness in Balranald springs from a complex proposal that could see taxpayers shelling out some tens of millions dollars to a small group of landholders, including people who admit to being partly responsible for the devastating destruction of the wetlands in this region. The money would come from a controversial $3.1 billion fund within the Murray-Darling plan for buying water back from irrigators. The deal would also involve either the federal or state government buying a set of properties that covers much of the floodplain in the lower reaches of the Murrumbidgee.
The area in question is Nimmie-Caira, named after the two main creeks that run through it. It's owned by 11 landholders —including a Melbourne lawyer, an American former commodities trader — as well as men whose families have lived in the region for generations.
The proposed purchase has won support from many of Australia's most powerful water czars, people who have been entrusted to come up with the right plan to save the Murray-Darling Basin. Craig Knowles, who heads up the Murray-Darling Basin Authority, told The Global Mail he applauds aspects of the proposal. And NSW Water Commissioner David Harriss said the purchase could deliver some of the best environmental outcomes of any of the proposals he's seen.
But critics say the Nimmie-Caira buy-back would be a rort. They say the current landholders don't have formal rights to the water they are planning to sell.
Indeed, the Nimmie-Caira landholders admit they don't yet have the formal entitlements that irrigators normally need to take water from the rivers. NSW has for decades permitted them to take water from the river when it's available, in exchange for an annual fee. The state recently announced plans to formalise that arrangement by granting the Nimmie-Caira landholders official entitlements.
It's those entitlements that they hope to sell to federal taxpayers, at a massive markup. They have paid $260,000 a year for the water; they hope to sell it, collectively, for about $83 million.
Jeremy Buckingham, Greens member of the NSW Upper House, calls the proposal a "scandal of the highest order".
"The Murrumbidgee River is one of the most over-allocated catchments in the whole Murray-Darling system," he says, referring to the rules that govern how much water can be taken from the river. "For the state government to be proposing new water entitlements on such a scale, that are to be bought back at enormous cost to the taxpayer, is completely and utterly ridiculous."
Buckingham says the deal raises serious questions about the strategy behind the Federal water buy-backs. He plans to call for a NSW parliamentary inquiry into the deal, and says he will push his federal counterparts to take action.
Peter Morton and many of his neighbours are also incredulous at the proposal. "It's an atrocity," says Morton. "They're trying to sell water they don't own, and we're going to lose gum trees down here."
The Torrent of Resentment
The dispute over Nimmie-Caira has pitted Morton against people he once called friends, including Michael Spinks whose family has lived on Nimmie-Caira since his grandfather arrived as a soldier settler in 1919.
When The Global Mail visited Spinks in mid-April, he and his dog, Nitro, met us at the family homestead. Spinks told us that the only way to traverse the 84,000 hectares of Nimmie-Caira on that day was by plane.
Once airborne, the reason was clear. Water glittered below as we flew northeast toward the dot-on-the-map town of Maude. Spinks pointed out rookeries where thousands of native birds have nested in recent years, as well as some of the giant bays he and the other farmers use to water the black soils on which they grow their crops of organic wheat and barley.
When we landed on a property called Torry Plains, Steve Blore, who owns one of the properties in the proposed deal, eased us into his tinny and took us for a cruise down the creek.
The "creek" is 50 metres wide at some points, with magnificent red gums lining the banks. If the deal goes ahead, this is part of the land that could see Spinks, Blore and the others reap millions.
In hushed, reverent tones, Blore pointed out the birds: spoonbills, darters, ibis, native duck, and a lone sea eagle whose sturdy body stood atop of one of the ancient gum trees at the water's edge.
In spring and summer, thousands of nests dot the banks, cupping pairs of white straw-necked ibis eggs. So vigorous is the birdlife here that farmers don't use chemicals to eradicate insects. "We've got ibis to do that for us," says Spinks, with a hint of pride.
The floodplains of the Lowbidgee — of which Nimmie-Caira is a part, along with Yanga National Park and Redbank — are a vivid example of Australia's extreme climate. In times of drought, Nimmie-Caira receives virtually no water, positioned as it is at the bottom of the Murrumbidgee, which starts in the Snowy Mountains and supplies water to Canberra, Wagga Wagga and Griffith before it gets anywhere near Nimmie-Caira. But when rain is abundant, as it has been in the past few years, the Murrumbidgee spills over its banks at Maude and pours into intricate webs of "terminal" creeks, streams and swamps, inundating the Nimmie-Caira floodplain with more than enough water to fill Sydney Harbour. It's some of this water that the landholders are hoping to sell to the Commonwealth.
Flying over the Nimmie-Caira properties, irrigation channels look like long ribbons cutting across the land. They direct water into giant bays, called ponds, where the farmers lock it in place.
"If there's plenty of water, we'll hold it on for a period of months," says Spinks. "That kills a lot of weeds and obviously wets the subsoil very well."
The quantities of water they use are immense. Spinks says the average size of a pond is about 162 hectares, or the size of Sydney's Centennial Park. The largest covers about 567 hectares.
When asked how many ponds were on the properties, Spinks seemed genuinely taken aback. "Hundreds," he said, unable to name a specific figure. "Nobody's ever asked."
Thanks to the flooding, the area once supported wetlands that scientists say would have rivalled Australia's famous national parks in the north.
What remains, though, is just a nucleus of the original habitat.
Changing the Flow
In 1872, a correspondent for the Town & Country Journal described the Lowbidgee as a place of vast swamps, and country so clotted by "exceedingly sticky and tenacious" black mud that his "horse's hoofs resemble pans" and "the wheels of a buggy resembled cheeses".
The area was substantially unchanged when Sir John Monash visited in 1904, and prepared a report for the Lower Murrumbidgee River Locking League.
Monash argued that upstream developments — especially "Barren Jack Reservoir," which is today known as Burrinjuck Dam, and is one of the largest dams on the Murrumbidgee River — would unfairly deprive the Lowbidgee of the floods that he said were "of the most pronounced benefit and importance" to the area.
The League eventually persuaded government to build Maude and Redbank weirs, which were finished in the mid 1900s, to direct water onto their properties and allow them to continue grazing, which they and subsequent owners did for decades.
Then came major changes.
During the 1980s and 1990s, the Nimmie-Caira graziers changed their land use to growing crops of wheat and barley. With financial assistance from the state government, they bulldozed huge tracts of the land and dug out more than 2,500 kilometres of channels and levees for irrigation.
The works were deemed approved by the relevant minister, who, according to an official with the NSW Office of Water, has the power to greenlight them. Normally, taking water from the rivers without appropriate authorisation can lead to stiff fines and possible jail time.
According to a 2001 report by the NSW National Parks and Wildlife Service, this irrigation of Nimmie-Caira is what caused one of the world's largest wetland destructions in recent times.
It took less than a quarter of a century, between the years of 1975 and 1998, for the area of the wetlands to shrink by 60 per cent. And where prior to 1986 there were nearly 140,000 waterbirds, by the year 2000, the wildlife service found fewer than 22,000 — a decrease of 84 per cent.
"Our estimate of wetland loss and degradation on the Lower Murrumbidgee floodplain ranks among the higher estimates reported for wetlands in the world," the report found.
The report was co-authored by Richard Kingsford, now a professor at the School of Biological, Earth and Environmental Sciences at the University of NSW, who has written extensively about the Lowbidgee wetlands. Ten years after the report was published, the Nimmie-Caira landholders paid Kingsford to prepare another report on the bird life that remains in the area. (While some of the current owners bought the properties after the destruction took place, others have owned their properties for decades.)
Kingsford condemned the destruction, and implied that government and the then-landholders should have known better: "The environmental importance of the area was well known in the early 1990s, as were the impacts of water resource development," he wrote.
Spinks, who is the official spokesman for the Nimmie-Caira landholders, admits they caused a lot of damage when they cleared the properties, but he says they also conserved the wetlands that remain.
"We maintain those key areas and rookeries and floodways at our own expense," says Spinks. "If there was no one here fighting to keep the water on them, they wouldn't exist."
And the landholders have learned to capitalise what they see as their environmental credentials. In the 1990s, they produced promotional videos for their organic wheat operations, emphasising their chemical-free methods. The videos, which were translated into Japanese, sought to win over clients in Japan's high-end noodle market. The Nimmie-Caira farmers also made DVDs showcasing the birds, echidnas and other wildlife that flourish on what remains of the wetlands.
Indeed, the environmental assets on Nimmie-Caira are now at the core of the landholders' case as to why government should buy them out. They've produced presentations for high-level meetings, hired politically wired consultants to help lobby state and federal bureaucrats, and they keep the phone numbers of high-ranking officials in their mobile-phone address books. They told The Global Mail that they communicate with the head of the Murray-Darling Basin Authority, Craig Knowles, by speaking regularly with one of his top advisors.
The landholders may have found a willing buyer at the perfect time. The Commonwealth is desperate to return water to the Murray-Darling system and has the money to buy up water allotments.
The $3.1 billion for water buy-backs has mostly been spent; the plan to buy Nimmie-Caira is one of eight NSW projects vying for the remaining federal funds. The government has previously paid a premium for large deals, and Nimmie-Caira represents one of the largest on record.
The deal relies on maintaining cooperation between the 11 landholders with disparate motives and interests — some are old and in ill-health, others are fed up with farming the tough country, and none has children who want to take over the farm. If the group splits apart, they say, the water and land would be worth considerably less. And some told us they fear they won't be able to keep the group together if the negotiations take too much longer.
They Took Our Water
Downstream, the Nimmie-Caira landholders' lobbying campaign has irked many, who say that the landholders are greenwashing state and government officials alike.
Peter Morton sits in his office in Balranald with two other local farmers, Lance Howley and David Brockhart, drinking cans of Coke and Solo, and stewing over the proposed Nimmie-Caira deal. These men do not see the Nimmie-Caira farmers as environmentalists, but rather as culprits who contributed to the deaths of thousands of trees and animals downstream.
"No one anywhere else in Australia would be allowed to handle water like they do," says Howley, who was honoured with an Australian Fire Services Medal in 2010 for his contribution to the regional fire service. "It's just unbelievable."
Very few of Australia's wheat farmers rely on irrigation at all, according to John Hornbuckle, a specialist in irrigation technology at the CSIRO. The vast majority depends on rainfall to water its crops. But Hornbuckle says the Lowbidgee's extreme drought and flood regime makes it difficult to draw meaningful comparisons of water efficiency.
On the same day that Nimmie-Caira was flush with water, most of Morton's farm — a 40-minute drive away — resembled the kind of scene Australians grew used to seeing during the toughest years of the drought.
His property is close to the junction of the Murrumbidgee and the Murray. It abuts Waldaira Creek, a small body of water that, when flooded, supports native old-growth red gums, box trees and lignum bushes.
Bumping along in his dusty jeep, he explains why the dead and dying red gums haunt him. His family has lived in the area for more than a century, and Morton feels a responsibility to be a steward for the place.
"When the gum trees started dying, my daughter said, 'We've got to do something about it'," he recalls.
Gaunt box trees stand a few metres back from the banks of the creek, indicating that these areas of Morton's property traditionally flooded. But they haven't had a drink for more than a decade, and even during the once-in-25-year flood that hit in autumn 2012, Morton's trees mostly missed out.
"The water should be right across this now," he said, pointing to his dry fields. "But I don't think it's going to make it this year, [even] on a pretty big flood event."
A fringe of dead trees stretches at least 21km along the creek. Morton fears for animals such as glider possums, regent parrots, eagles and cockatoos, which depended on the trees for their habitat.
"As you can see, not only the gum trees are dying, but also the understory," he says. "It's a whole floodplain that is dying."
Morton, Howley and Brockhart are adamant that the upstream diversions are partly to blame for the thousands of gums that now stand like skeletons stripped bare by the sun.
They believe the problem arose when the Nimmie-Caira farmers changed from grazing, to growing crops.
Under a grazing regime, the floodwaters used to flow across the floodplain, which tilts from the northeast to the southwest, dropping about 20 centimetres every 1.5 kilometres. The water would wet the land, allowing grass to grow for the animals, as well as watering the red gum forests and swamps found on the property.
"It used to flow out in those little creeks, and back into the river," Howley says. "But when they started irrigating with it, that changed the parameters of the whole system."
This ebb-and-flow effect is integral to Australia's river systems, says Tim Stubbs, an environmental engineer with the Sydney-based Wentworth Group of Concerned Scientists.
"The river has evolved to deal with wet and dry times," says Stubbs. "The river and its ecosystems feed themselves off that process of water moving from the channel to the floodplain. The water allows the floodplain to grow and brings back crucial nutrients when it returns to the river. "They can't function without each other," he says.
Howley complains that the works on Nimmie-Caira disrupted that flow, and should never have been built. "They never should have been able to consume [water] like that," he says.
The Nimmie-Caira farmers dismiss such claims. The water, they say, always spilled onto their properties from the Murrumbidgee, and they have not deprived anyone downstream of water. NSW officials confirmed this to some extent, saying that the Nimmie-Caira owners could always do what they wanted with their water, once it flowed from the river onto their properties.
An official at the Office of Water said the government doesn't have the sort of detailed, historical information about water flows that would be needed to establish whether the Nimmie-Caira farmers are truly responsible for what's happened further downstream, but that they probably did play some role.
Ask the Nimmie-Caira farmers why Balranald locals — blokes with whom they used to fish, play footy and cricket, and who they considered mates — would so violently oppose their practices, and they can only suggest the "green-eyed monster".
The Web of Environmental Policies
To understand why some would claim that the water that has flowed onto Nimmie-Caira for decades neither belongs to the farmers, you need to understand how our water is owned and managed.
In the mid-1990s, the Murray-Darling system — which, according to government figures, provides 39 per cent of all agricultural production in the country — was crumbling. Gum trees were dying, algal blooms were erupting along the rivers, and the brittle, white incursions of salinity had spread to large parts of the basin.
Scientists and environmentalists attributed the problems to a cause that was both simple to understand, and incredibly difficult to fix: after more than a century of sucking increasing quantities of water from the river to supply irrigators, industry, and communities, the system had simply reached breaking point.
The crisis prompted the "Basin States" — Queensland, NSW, Victoria and South Australia, along with the ACT — to agree to cap the total amount of water that could be extracted from the Murray-Darling river system.
Starting in 1995, the overwhelming majority of the basin's water-users were prohibited from increasing their take. But they were also given a new set of rights to that water, which meant that it could be bought and sold, much like shares in a company.
Australia's water market was born.
"Many governments felt this was good because instead of having to make very hard administrative decisions to take water off farmers in over-allocated systems, they would create a water market," says Jamie Pittock, a research fellow at the Australian National University's Crawford School of Public Policy, and an internationally recognised expert on water policy and wetlands.
Pittocks says the system encourages a more efficient use of water in times of scarcity.
"If you've got a farmer who's just spilling water across fields to grow hay for dairy cows, you create an incentive for that farmer to sell that water to a high-value user, like an orchardist whose trees will die if they go without water, and who will create a greater return and employ many more people."
The system, though imperfect, is widely acknowledged to have worked during the drought, which lasted from 1997 to 2009, according to official data. As the availability of water plummeted, prices soared, at times fetching thousands of dollars per megalitre.
Amazingly, though, the net value of agricultural production stayed relatively stable, Pittock says.
But although it was being used more efficiently, the underlying problem remained: people were still pulling too much water from the rivers.
Beginning in the early 2000s, the NSW state government began drawing up water-sharing plans for every major valley of the Murray-Darling System. The plans added more detail to how irrigators could use water, and also, crucially, carved out allowances for the environment, says NSW Water Commissioner David Harriss.
But when it came to the Lowbidgee the negotiators, including current Murray-Darling Basin Authority chair Craig Knowles, who was then NSW Minister for Natural Resources, punted.
Harriss says the Lowbidgee was deemed "too hard" to regulate because the area's extreme droughts and floods make it very difficult to determine exactly how much water irrigators can take, and how much must go to the environment.
Instead of tackling the problem when they drew up the Murrumbidge Water Sharing plan in 2004, the parties agreed to address Lowbidgee in a separate agreement at a later date, even though the area is part of the same water system.
The NSW Greens' parliamentarian Jeremy Buckingham says that by failing to rein in the Nimmie-Caira farmers' use of water, the NSW government allowed waste to continue.
"It seems to me that the taxpayer is footing the bill for the failure of Craig Knowles to deal with this issue when he was minister in NSW," he says. "It's not proper and it's not fair, and it's not how we should manage water or taxpayers' dollars."
The $83 Million Deal
In many ways, being relegated to the too-hard basket worked out well for the Nimmie-Caira farmers.
"For years we sailed along here, and kept under the radar so we could do what we wanted," says Spinks. "In retrospect, that was probably the wrong thing to do."
While most irrigators pay according to the amount of water they use, the Nimmie-Caira landholders pay a different type of charge, called an "area-based assessment." The fees go to State Water, the government-owned corporation responsible for looking after channels, weirs and all the infrastructure of the river system, as well as physically delivering water to those who've paid for it.
The Nimmie-Caira farmers pay $4.25 per hectare, no matter how much — or how little — water is available. Spinks says this adds up to $260,000 a year, collectively. While it might be money down the drain in times of drought, it can mean very cheap water in times of flood.
That's all about to change.
NSW is finally getting around to regulating the Lowbidgee. Late last month, the Office of Water published a proposal to create 381,000 megalitres of annual entitlements for the Nimmie-Caira farmers — the equivalent of two-thirds the volume of Sydney Harbour. The farmers could sell those rights, but if they were instead to use the water it would cost significantly more than what they are currently paying.
There are deep divisions of opinion around how much water the Nimmie-Caira farmers are truly entitled to sell.
In a report last November, the Murray-Darling Basin Authority said the entire Lowbidgee actually uses a yearly average of 150,000 megalitres for irrigation, with the rest already going to the environment. This represents 60 per cent less than the landholders would be permitted to sell, if the state plan goes ahead.
Locals say even the more conservative numbers are far too high, and the plan would see millions of dollars go to waste.
"They're just handing them bulk dollars," says Howley. "They're just giving away the people's money. It's bullshit."
Neither the landholders nor government officials would say how much the whole deal could be worth, but estimated the water will fetch roughly what the Commonwealth has recently paid for similar deals in the Murrumbidgee catchment — $218 per megalitre, according to the latest available figures.
That would see 11 landholders receive around $83 million from the taxpayer, for the water alone.
And it's not just the water that's for sale. The deal could include extra money for the land and infrastructure — the thousands of kilometres of channels and levees.
This raises another hurdle in accurately assessing the compensation to which the landholders might be entitled: because of haphazard record-keeping, no one knows who owns which parts of the extensive irrigation works, or how much money taxpayers have invested in them over the years. Part of the $200,000 feasibility study is going towards figuring that out, Commissioner Harriss said.
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
Photo by Ella Rubeli
The lack of clear, public information about these properties raises alarm bells for federal National Party senator Fiona Nash, who has been critical of many aspects of the water buy-backs.
"We certainly haven't had the transparency we need to ensure that the money is being spent appropriately, and that the taxpayers are getting value for money," she says.
Nash has tried to get more information about how the government has used the billions they've already spent on buying back water, but so far, has not received answers. Without full transparency, she says, the Nimmie-Caira deal could wind up as a lost opportunity for the environment, and a waste of public money.
The Nimmie-Caira landholders say that the new entitlements merely formalise rights they've always had, and the fact that they paid millions of dollars in fees over the years — even when there was no water to take — means they have a right to the proposed allocations.
At the same time, they acknowledge they won't be able to continue their current practices if they have to pay market rates for their water. Eventually, they'll have to sell or radically change the way they have been using water and the land — which could also have serious consequences for the environment.
"If we don't sell, we're going to have to have a big rethink about how we go about things," said Steve Blore as he drove past a broad opening of water on which four black swans swam in a slow circle.
"You can't lock up 3,000 or 4,000 acres [1214 or 1619 hectares] of country to breed birds. We will use that water to farm with. We will use that country to put a mob of cattle."
Buying Our Way Out
There is no clear plan for what to do with the properties, if they do land in NSW's hands. NSW water chief, David Harriss, says one option would be to create a giant national park, which would join with the recently declared Yanga National Park to the west. Another possibility is to create a reserve and work with indigenous organisations to properly manage the land. Yet another would see the water that flows onto Nimmie-Caira pumped downstream into the Murray, for use when South Australia needs more water.
"We're looking at this as a project that can provide terrific environmental outcomes," Harriss says.
Craig Knowles — head of the Murray-Darling Basin Authority which will recommend projects to the Minister for Sustainability, Environment, Water, Population and Communities, Tony Burke — told The Global Mail he "strongly supports" the $200,000 feasibility study that is underway to assess the merits of the project.
Whatever the history of social, political and environmental mistakes, there is no doubt that Nimmie-Caira now holds wetlands — both preserved and artificially created — that provide important breeding grounds for many species of birds and animals.
Some experts say Australians must all take responsibility for decades of failed social and environmental policies, and conserve what's left.
"Sometimes the easiest way to get an environmental outcome is to simply pay out those who are needed to make the deal," says Jamie Pittock, of the Australian National University. "But this does sound awfully generous."
Kingsford, the scientist who wrote the scathing report in 2001 about the environmental destruction, now believes the buy-back deal represents a "wonderful opportunity" to restore the site.
Even the locals who oppose the buyout say that, if the water was truly returned to the river and the areas downstream, they could support the sale. Howley reluctantly concedes that he could be persuaded: "My idea is to pay them out, piss them off and tell them to go to buggery," he says. "But it's got to be fair and equitable."