New water compliance regime gets $23m from state Budget bucket, huge new fines for water thieves

STATE government will splash $23 million from next week’s budget into its new water compliance regime as it continues its campaign to repair and rebuild trust on irrigation issues.

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The announcement by Regional Water Minister Niall Blair and Treasurer Dominic Perrotett comes a day after proposed rules for irrigators were revealed in parliament, including mandatory metering and a single public register for licences, entitlements, allocations, approvals and use.

The 2018-19 Budget commitment of $23m over two years will see the state’s new water monitor – the Natural Resources Access Regulator – deliver more boots-on-the-ground officer to make sure everyone is doing the right thing.

Minister for Regional Water, Niall Blair said Ken Matthews’ independent review last year was ‘a wake-up call’ for water management in NSW, following allegations of water theft and poor compliance in the wake of the ABC’s Four Corners Pumped investigation.

Mr Blair said the improved regime would also see a robust metering framework, as well as pilot technologies to enhance compliance activities, and improve the protection of environmental water down the rivesr.

“We know we had a lot of work to do to rebuild public trust and restore confidence in water management across this state. This Budget investment means we can continue to deliver on our commitments and provide a fair and equitable system for all,” Mr Blair said.

The NSW State Budget will be handed down on Tuesday June 19.

Proposed irrigator rules hit parliament

NSW irrigators and water users were given a glimpse at changes afoot in compliance, monitoring, and punishment this week with the introduction of the Water Management Amendment Bill 2018 – including flipping the onus of proof on water taken under their basic land holder rights.

Crucially, the proposed rules include huge new fines for people caught doing the wrong thing – including boosted tier one penalties for corporations from $2.2 million to $5 million, and tier two penalties from $1.1m to $2m.

Individuals charged with a tier two offence would face a $500,500 fine, up from $247,500.

Regional Water Minister Niall Blair said under the bill, holders of water supply work approvals will be required to install, use and maintain water meters unless they are exempt by regulation.

These regulations will be subject to consultation in the second half of 2018.

The regulations will also set the standards and requirements the meters must meet, including installation and maintenance, and for the protocol that must be followed in the event of a meter failure.

The Bill also allows for metering conditions to be included on water access licences as well as licences still in force under the Water Act 1912.

There will be punishments for failing to install, use or maintain a meter, providing false or misleading information and failing to notify when the meter is faulty.

The bill includes a new rebuttable presumption.

Mr Blair said the presumption will operate to assist in prosecutions for illegal water take where a licence holder takes water under both a licence and a basic landholder right.

Licence holders will need to show how much water was taken under their basic land holder rights instead of the regulator having to prove that the take was not basic landholder rights.

“This commonsense approach will not impact on people legitimately taking water under their basic landholder rights but it is necessary to stop people from flouting the law,” he said.

“This provision will not commence until the metering framework has been further discussed and implemented.”

Upwater on agenda at Ministerial Council

A critical meeting of state ministers in Canberra today could set the course for another round of water recovery under the Murray Darling Basin Plan.

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The meeting will discuss plans for recovery of the controversial ‘upwater’ element of the Basin Plan, which Commonwealth law says must be completed by 2024.

The Basin Plan was designed to deliver environmental benefits equivalent to returning 3200 gigalitres of water to the environment.

The Plan has two big buckets of water to fill: 2750 gigalitres worth of so-called ‘downwater’ and 450GL of ‘upwater’.

The crucial point about upwater is the Basin Plan rules require that water recovery from productive use does not have net negative impacts on Basin communities.

Local governments, farmer representatives and community groups have been speaking out, saying their economies are already faltering under the economic impacts of reduced irrigation.

They’re urging the ministers to steer a course away from on-farm recovery schemes and towards off-recovery methods – like recycling stormwater from urban areas in the Basin, or returning water from industrial use.

“Irrigators want to see strong acknowledgement from ministers that on-farm efficiency projects can have flow on impacts in communities and districts,” said National Irrigators Council chief executive Steve Whan.

Federal Water Minister David Littleproud issued a statement last night which was clearly directed at regional communities.

“The 450GL will only be delivered with neutral or positive social and economic outcomes,” Mr Littleproud said.

The upwater debate was spurred along in January, when consultant Ernst and Young delivered a report on the socio-economic impacts from upwater recovery to the Murray Darling Basin Authority.

It said the 450GL bucket could be filled with neutral or positive socio-economic impacts, through a mix of on-and-off-farm recovery schemes.

On-farm recovery is particularly troubling for large owner-operated irrigation schemes, where a reduction in water could see the number of farmer-customers dip below a critical mass needed to fund delivery infrastructure.

Victorian Farmers Federation water council chairman Richard Anderson said the criteria the Basin Plan uses to assess socio-economic impacts are flawed, measuring impacts on an individual basis rather than a local community level.

“We need Ministers in the meeting on Friday to amend the socio-economic test to ensure jobs in irrigation and agricultural communities are protected, to save our local communities from more hardship,” Mr Anderson said.

“Victoria is on a knife’s edge and the delivery of the 450GL without firmer criteria puts the region and local jobs at risk.”

He warned further on-farm recovery would cause dairy production to drop  by 235 million litres of milk, resulting in losses of $100 million in farm gate losses and $200m factory production.

He said water prices in the Goulburn Murray Irrigation District would rise $30 a megalitre and a further 500 jobs would be lost and warned that demand for water in a dry year across the southern basin would outstrip supply.

Victorian Water Minister Lisa Neville shares Mr Anderson’s concerns.

She will ask her colleagues in the Ministerial Council to work together on a plan to complete the 450GL upwater recovery through off-farm works.

“We’ll take off-farm projects to the table in Canberra that we can deliver — but we will not commit to on-farm works, which will just hurt Victorian communities,” Ms Neville said.

While the upwater recovery is yet to kick off, the 2750GL of ‘downwater’ bucket is nearly full. It came in three ways:

  • Direct buybacks of water entitlements from irrigators.
  • Commonwealth investment schemes that swap a portion of an irrigators water holdings for financial contributions to make farm infrastructure more efficient.
  • Offset projects – which are river works and measures that move water more to environmental assets like wetlands more efficiently.

The states recently had their plans for 37 offset projects approved by the MDBA, which means if they work out as expected, no further downwater recovery is needed.

Vets fear anthrax cases in southern Queensland were confused for pimelea

VETS fear the recent spate of pimelea deaths in south west Queensland may have actually been caused by anthrax and are warning all producers in the affected Maranoa and Balonne area to burn all carcases as a precaution.

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Anthrax distribution in Australia from Barro AS, Fegan M, Moloney B, Porter K, Muller J, Warner S, et al. (2016.

Speaking publicly for the first time since three major anthrax incidences at St George and Dirranbandi, local vet Libby Price, who was first on the scene of each case, questioned if some deaths put down to pimelea should have been further investigated.

“I’ve been here 16 years and I wonder now if a lot of the deaths being put down to pimelea over the years, there may be other factors that we haven’t picked up,” she said.

“It’s certainly more prevalent than what we are aware.”

Ms Price was one of four guest speakers at the AgForce St George Anthrax Workshop aimed at educating producers on the often forgotten bacteria.

In March last year, 120 head of cattle died from anthrax on a St George property following soil disturbance caused by grading.

From October to January another 30 sporadic deaths occurred on a neighbouring property while last month, one beast died from the bacteria near Dirranbandi.

Prior to the recent cases, the last incidence of anthrax in Queensland occurred in 2002.

Biosecurity Queensland Principal Veterinary Officer Operations Dr Jonathan Lee said while the recent surge in diagnosis was coincidental, he believed the spore was already seeded throughout the district.

Unlike pimelea, a preventative anthrax vaccine effective for six to 12 months is available for about $5/dose, but so far only about nine producers have taken it up recently.

Recent research identified the ‘anthrax belt’, previously from Moree and Walgett to the Victorian border from Corowa to Deniliquin, had expanded further north into central southern Queensland.

Dr Lee said with the area already likely to be seeded with anthrax, he suspected sporadic cases to continue.

“The problem is the diagnosis is difficult because you don’t see sick animals, you see dead animals,” he said.

“And once they have been dead for more than a couple of days it’s very hard to say what they died from.

“I’m sure there were a lot of sporadic deaths in this area that aren’t being recognised as anthrax.”

A team of 10 Biosecurity Queensland staff spent three weeks at the first St George property where the “unusual” large number of anthrax death occurred.

A helicopter was called in to help locate carcases which contractors then stacked and burnt for up to three days so the ashes could be buried.

Decontamination staff were also involved.

Before the anthrax diagnosis, the property owners had noticed some sporadic deaths, which were presumed to be caused by pimelea toxicity. It led to a high level of infectious anthrax material and within two days 90 head had died.

Vet Libby Price described the scene as a war zone.

“It was like someone had gone out there and shot cows, they weren’t even on their sides,” she said.

Livestock become infected with anthrax by ingesting the bacteria from the environment, which incubates in their system for four to 10 days.

The animal usually seeks water prior to its death and is found with bloody discharges from bodily orifices and bloats rapidly.

Despite some producer expectations, the animal isn’t infectious until it dies.

Anybody who suspects anthrax should not open the animal and should contact their vet immediately.

Has our comeback market peaked?

Spurred along by insistent demand from China and constrained supply from low sheep numbers, Australia’s 25,000 woolgrowers are reaping the benefits of a resurgence in the wool price.

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The question is now begging, has the market peaked?

Last week it was another record when the benchmark eastern market indicator (EMI) fetched 555 cents a kilogram higher than 12 months ago and broke through the $20 kilogram mark for the first time, finishing on 2027c/kg clean.

The week’s rise was on par in US dollar terms, increasing 33c to hit 1533c. In US currency this was also a record, being 18c above the previous high of 1515c in June 2011 when the US exchange rate was 105.5c.

Of the 30,439 bales offered, only 2.3 per cent were passed in and AWEX reported the value of the wool sold was $65.7 million, taking the season total for our wool clip to $3.2 billion providing a major boost for regional Australia.

It’s a different story from the industry in the 1990s after the collapse of the reserve price recovery scheme which kept the price artificially high, but consequently led to over production.

In 1998 prices hit a low average of $5.10/kg, well below the cost of production, causing many farmers to leave the industry. In turn, the size of Australia’s sheep flock shrunk.

National sheep numbers have fallen from 180 million in 1992 to about 70 million now.

Are we there yet?

Market intelligence expert, Scott Carmody, doesn’t believe that the wool market has peaked.

He said it is a market driven by demand, not supply, with the key drivers being China, who import nearly 80pc of Australia’s wool.

“Their (China’s) appetite for wool at the moment is insatiable, they need our raw materials to keep their machines running. If they don’t buy our product, then they don’t have the chance to make money,” Mr Carmody said.

“So where we go from here, that is their determination. They’re driving the market and they are driving it to a price until they see a resistance at retail.”

On the back of a visit to Chinese wool mills, he said the two concerns discussed were the quality and volume of the wool.

“We are now seeing six to eight major manufacturers and buyers of Australian wool in China and they are going from strength to strength,” he said.

“As they go on they will determine where this market peaks.”

Mecardo’s Market Analyst Matt Dalgleish said we haven’t out priced ourselves in the wool market.

“What has happened over the last few years is we have seen our domestic prices increasing over time, but the Aussie dollar has come off 25pc since 2011 so the increase in nominal terms, that the farmers are getting here, actually has been assisted by a falling Aussie dollar,” he said.

“So from an international perspective, foreign buyers haven’t noticed a great deal of difference in change of prices.

“Therefore the scenario is we haven’t priced ourselves out of the market.”

He said China is a market that is growing in it’s appetite for prestige products, so something with an Australia label will attract a premium.

“We have been bullish with sheep, lamb and wool in Mecardo and in the longer term we are still bullish in the market sector, but that is not to say that a seasonal condition can see a down turn in price,” he said.

Australian Wool Innovation (AWI) CEO Stuart McCullough said wool is finally making what it deserves.

“I think it is well known that I’ve thought wool deserved to be a $20/kg fibre,” Mr McCullough said.

“But it has moved there quite rapidly in the last little while, I wouldn’t mind it settling into a bandwidth that it bounces in for a while that gives the processors and consumers of the world a bit of time to digest these sort or price levels and then moves on again.”

Supply concerns

With just five sales left before the winter recess, there are concerns woollen mills here and overseas are not going to have enough supply to keep their mills operating over the three week recess while sales cease.

“We are now heading into a period in our season where volumes will decline,” Mr Carmody said.

Mr Carmody said not only are producers shearing early, but competition for our farmland is incredibly strong.

Producers are having to make the decision on whether to hold on to their sheep and grow more wool or sell them for meat, he said.

“Barley has jumped $80 a tonne and hay has doubled in price, so offloading your sheep so as not having to feed them and getting $170 per head is pretty attractive,” he said.

“More people are only keeping the core breeding stock now, selling the rest and hoping that it rains soon.”

Mr McCullough said there are a number of key indicators that look positive from the demand point of view​ and look a bit pessimistic from the supply point if view because of the declining season.

“As we get rain, that will start to improve, but with 350 kilograms of wool in Australia, any poor season, we will see volumes contract, and with any good season, we will see them grow a little bit,” he said. “But the growth from people turning back to wool will be very modest because other competitive land uses are so good at the moment.”

Looking ahead, total offerings over the next three sales are 14.9pc greater than in the same sales last year as growers rush to shear and offer wool for sale.

Sources include: ABC Rural, The Land, The Weekly Times, Stock and Land, Stock Journal, Bloomberg, Farm Online, Queensland Country Life

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Waterfind submission to MDBA