OPINION

Murray-Darling announcement ignores true drivers of regional decline

Murray-Darling announcement ignores true drivers of regional decline

In 2012, Murray-Darling Basin states agreed on a plan to dial back irrigation, bringing it to a sustainable level and compensating farmers in the process.

The cheapest and most-reliable method it set out was buying back irrigation entitlements directly from willing sellers.

With Federal Water Minister Keith Pitt's announcement last week, the Morrison government has decided to take this option off the table.

Instead, it will try to recover water through savings from off-farm irrigation efficiency subsidies.

The difficulty is, there isn't much water left to be recovered this way.

The low-hanging fruit has been picked and recent proposals have inflated price tags, nearly six times the cost of buying back entitlements directly.

Why would the government make it nearly impossible to deliver a plan that's years behind schedule?

Because it is working on the assumption that river recovery is the sole driver of the decline of farming communities, business closures and job losses.

While the basin plan has become a convenient scapegoat, it's not that simple.

Evidence shows farmers are being driven out by a mix of impacts, including a drier climate and declining commodity prices.

To address this problem, we need to talk about debt and competition.

Over the last few decades, growth in agriculture has been driven by technological improvements and access to global markets. But it comes at a price.

For workers, new machinery and crop advancements have cut job opportunities. For employers, equipment had to be bought with larger amounts of borrowed cash.

This debt brings better technology onto the farm and opens the door to greater potential profit.

But it also dramatically shrinks the distance between a good year and financial hardship.

While climate change increases these risk levels, farms loaded with debt are put into fierce competition with no choice but to drive down the costs of production - relying on cheap water that is increasingly difficult to find.

At the same time, competition has forced farmers to contend with a long-term trend in declining commodity prices.

So the battle of competition is fought by cheapening the farm's produce.

This depends on productivity, which depends on economies of scale - bigger beats smaller.

If these are the underlying drivers, then Mr Pitt's announcement to abandon river recovery doesn't change the trajectory. All it does is create false hope leading up to the next election.

To put communities on the path to prosperity and resilience, we need to address the true drivers of regional decline.

Tyler Rotche is healthy rivers campaigner at Environment Victoria.