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The Basin Plan at a glance Claire Miller Water Policy Analyst Trade & Strategy 5 December 2012.

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Presentation on theme: "The Basin Plan at a glance Claire Miller Water Policy Analyst Trade & Strategy 5 December 2012."— Presentation transcript:

1 The Basin Plan at a glance Claire Miller Water Policy Analyst Trade & Strategy 5 December 2012

2 Basin Plan –The Murray Darling Basin Plan was signed into law on Thursday, 22 November. –Disallowance motions in the House and the Senate were defeated. –The Plan will be implemented over the next 12 years, to –The Sustainable Diversion Limit (SDL) is 10,873GL for surface water, which means 2750GL of water is to be recovered by –So far, 1577GL has been recovered. –The SDL adjustment mechanism allows the SDL to be adjusted by +/-5%, or 544GL in either direction, on review in –So the volume ultimately recovered could be anything from 2206GL to 3294GL.

3 The Sustainable Diversion Limit Baseline Diversion Level 2009 (GL) SDL 2019 (GL) Recovery target by 2019 (GL) % reduction% reduction with 600GL infrastructure savings Basin - total13,62310, % Basin excl. interceptions 10, %20% Northern excl. interceptions %9.5% Southern excl. interceptions %23% Southern disconnected excl. interceptions %

4 The Water Recovery Strategy The Government is committed to achieving environmental outcomes equivalent to 3200GL in entitlements, in the following way: 600GL in entitlement from Sustainable Rural Water Use and Infrastructure Programs (SRWUIP), including on- and off-farm infrastructure, by GL in buybacks and State ‘recoveries’ by GL in environmental offsets by GL extra in entitlements from more on-farm and infrastructure savings in the southern-connected system from 2014 to If all the above is achieved, it equates to the recovery of 2550GL in entitlements across the Basin (600GL GL + 450GL = 2550GL).

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7 Will there be more buybacks? Yes, but at a more moderate and strategic pace. The Government intends to purchase another 239GL gradually, to close the gap to 1500GL in total. However, it reserves the right to purchase more after 2016 to cover any shortfall in delivering 650GL in environmental offsets or 600GL in SRWUIP savings. It is unclear whether it would also revert to buybacks if less than the additional 450GL is recovered through on-farm works or state-approved measures. Social impact neutrality test applies to recovery of additional 450GL

8 Water recovery: Southern-connected system Baseline Diversions (GL) 2009 Catchment recovery target (GL) Contracted recovery to 30/9/12 (GL) Catchment Gap (GL) Pro-rata of 971GL for ‘downstream’* (gap) Murrumbidgee (438) NSW Murray Lower Darling Vic Murray (305) Goulburn Campaspe Loddon SA Murray (80) *ACT pro-rata share of 971GL downstream component: 4.9GL

9 Groundwater Baseline Diversion Level 2009 (GL) SDL (GL) Goulburn-Murray: Shepparton Irrigation Region (GS8) Goulburn Murray: Highlands (GS8) Goulburn-Murray: Sedimentary Plain* (GS8) Goulburn Murray: deep (GS8) 020 Lower Murray Alluvium (shallow; Shepparton Formation) (GS27) 81.9 Lower Murray Alluvium (deep; Renmark Group and Calivil Formation (GS27) 88.9 *The Goulburn Murray Sedimentary Plain SDL will be reviewed, reflecting argument between Victoria and the MDBA over interpretation of Victorian groundwater management plans

10 Water affordability and availability The reliability of water entitlements will remain the same. About 26% less water will be allocated on average for agricultural use in the southern connected system Water may be scarce and expensive on the temporary market in some years and at some times of the year. Conversely, dairy farmers with allocation to sell to horticulturalists in dry years should get a reasonable price.

11 Implications for GMID GMID produces 76% of milk in the Murray Dairy region Pre-Drought Total feed for dairy: 2.5 mt/DM 1543 farms 2300 million litres of milk Current water available, if no further recovery for environment* Total feed for dairy: 2.0 mt/DM 1261 farms 1890 million litres of milk Scenario 1: loss of another 80GL to deliver BP minimum of 2210GL* Total feed for dairy 2.0 mt/DM 1229 farms 1840 million litres of milk Scenario 2: loss of another 196GL to deliver BP commitment of 2550GL* Total feed for dairy 1.8 mt/DM 1130 farms 1700 million litres of milk^ *Based on projected GMID milk production in , which indicates dairy farmers have already achieved a 10% productivity gain on historical levels in last two to three years. ^Closing the gap between 1700ML and the pre-drought 2300ML requires a 20-25% productivity increase. Scenario modelling by RMCG.

12 On-farm water efficiency programs Pre : On-Farm Irrigation Efficiency Program 50:50 sharing of water savings, whereby participating farmers transfer entitlements equivalent to half the savings they achieve across to the environment, in return for the Government’s investment on their farm. Post : $1.57b legislated to deliver an additional 450GL primarily from on- farm works from Intent to replace the 50:50 sharing model with an integrated program whereby farmers transfer half their savings to the environment, and the Government then pays an additional market $/ML rate for the other half. So the farmer gets the efficiency works, and a cash payment on top of that, but does not get to keep any of the water savings.

13 Dairy Australia and RDP support for farmers Dairy Australia’s water research and development programs will assist dairy farmers to adapt to the Basin Plan over the next 12 years and beyond. Current research includes: improving border check irrigation performance project; performance of lucerne under variable irrigation strategies; forage systems for cool temperature pasture-based systems; and forage assemblies for increasing productivity in livestock systems. Murray Dairy field days and other extension opportunities to learn about research findings and advances in farm system planning and technologies, business risk management and technical advisory services. MD bid for Regional Development Australia funding to take automation, feeding systems, irrigation design and robotics developed in research programs and road- testing them on farms under commercial operating conditions.

14 Reviews and reports The Basin Plan is an adaptive management plan, with the following opportunities for further refinement: 1.Water recovery strategy – annual review 2.Constraints management strategy – by December Groundwater in Goulburn Murray Sedimentary Plain – by December Northern Basin SDLs – by First SDL adjustment review – Second SDL adjustment review – Basin Plan impacts advisory report – First 10-year Basin Plan review – 2022 Outstanding issues: benchmark conditions of development; environmental scoring method; changed funding priorities over next 12 years.

15 ADF/ADIC advocated for: An SDL adjustment mechanism A 1500GL cap on buybacks 650GL in environmental offsets Investment prioritised to environmental works and infrastructure funding.. The Living Murray works and safety nets Apportionment of the downstream component Ministerial discretion on SDL adjustment recommendations Stronger requirements for MDBA consultation with the States on methodology, and provision for public consultation. Socio-economic neutrality test for additional water recovered above the 2750GL benchmark.

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