Murray Darling Basin Plan Response

Water delivery system

The Murray-Darling Basin Plan aims to address environmental degradation resulting from historic water overallocation for irrigation and other uses, particularly over the last 60 years.

The Plan was signed into law on Thursday 22 November 2012, with a target to recover 2750 GL primarily from irrigators for the environment by 2019.

The Sustainable Diversion Limit

An annual average 13,623 GL of water was diverted for irrigation and other uses up to 2009. The Basin Plan sets a Sustainable Diversion Limit (SDL) at 10,873 GL for surface water, which means 2750 GL of water is to be recovered by 2019.

The recovery target can go down by 650GL if environmental works (or ‘offsets') can deliver similar or better outcomes to 2750GL with less water. This is called ‘downwater’.

The recovery target can go up by 450GL provided no additional negative socio-economic impacts are caused. This is called ‘upwater’.

2016-01 - Fact sheet - Sustainable Diversion Limit (SDL) adjustment mechanism (PDF, 504KB)

As of 30 September 2016, 1966 GL had been recovered for the environment, including 1651 GL in the southern-connected Basin comprising northern Victoria, southern NSW and SA.

Most of this water was recovered by buying entitlements from irrigators in 2008-2012; irrigators in the southern connected Basin sold about 915 GL to the Commonwealth.

Socio-economic and environmental effects

The Basin Plan is affecting water availability and affordability, particularly for dairy farmers in shared irrigation districts. This is presenting a significant adjustment challenge.

The Water Act 2007 and the Basin Plan include regular reviews of socio-economic and environment effects during the implementation period from 2012 to 2024.

The Murray-Darling Basin Authority is due to submit its first five-year review in mid-2017. It has promised to work with States, regions, community and industries to inform this review.

Dairy Australia in 2016 funded or co-funded studies examining the Basin Plan’s effects on dairy farmers in the Goulburn Murray Irrigation District (GMID). More than 80% of the Basin’s milk comes from this region, which is also the most affected by the Basin Plan.

Dairy Australia plans to undertake a study of Basin Plan effects on dairy farming in South Australia in 2017, covering the lower Murray River, lower lakes and Mt Lofty Ranges.

Basin Plan socio-economic summary (PDF, 522KB)

Reports

1.    ‘Water market drivers in the southern MDB: Implications for the dairy industry’.

Aither report for Dairy Australia 29 July 2016.

Key findings:

  • Buybacks have shrunk pool for irrigation by average 15% a year
  • Temporary water costs $14 - $36/ML more now in an average year like 2014-15
  • Temporary water costs $24 - $49/ML more now in a dry year like 2015-16
  • Farmers’ net returns would be $130m more in 2015-16, if buyback allocations still used for irrigated agriculture
  • Milk production unlikely to return to pre-drought levels given the predicted water prices, without offsetting improvements in milk price, other input prices or production technologies.

More information

2016-07 - Water market drivers in the southern MDB Implications for the dairy industry - 1 page (PDF, 63KB)

Infographic summary.

2016-07 - Water market drivers in the southern MDB Implications for the dairy industry (PDF, 1.59MB)

Full report.

2.    Regional irrigated land and water use mapping in the Goulburn Murray Irrigation District: Dairy Evaluation

Project funding partners: GBCMA, DELWP, DEDJTR, Dairy Australia, GMW, GMW Connections, NCCMA

Key findings:

  • Dairy remains an extensive land use in the GMID, but is less intensively irrigated.
  • Dairy now uses about 25% less water a year than a decade ago.
  • Milk production has fallen 26% over the same period..
  • Dairy is more exposed to the temporary water market, increasing farmers’ business risk.
  • In 2003/04, dairy used about 30% more water each year than its farmers collectively owned in HRWS.
  • Now dairy is using 59% more water than it owns in HRWS. Dairy farmers compete for the extra water on a market supplying the whole southern-connected Basin.
  • Dairy farmers are highly sensitive to the temporary water price: 82% said prices over $200/ML were not viable.
  • Uncertainty about water availability is a substantial barrier to upgrading irrigation practices for more than half the dairy farmers.

More information

Regional irrigated land and water use mapping in the Goulburn Murray Irrigation District: Dairy Evaluation report (PDF, 3.6MB)

The full technical report and summary covering all commodities in the GMID is available here: https://www.gbcma.vic.gov.au/publications/published_documents/catchment_community_and_economy

3.    ‘Basin Plan: GMID socio-economic  impact assessment’- RMCG September 2016

Report commissioned and funded by GMID water leadership forum, formed 28 October 2015 at a water summit in Tatura convened by the Committee for Greater Shepparton and Member for Shepparton, Suzanna Sheed. Forum includes community, industry and government representatives.

  • Reduced water availability due to buybacks is costing $550m a year in lost production.
  • Dairy is worst hit, losing $200m at the farm-gate, $360 million in processing output
  • Mixed farming is losing $25 million a year in annual farm-gate value.
  • Horticulture largely unaffected, but future growth limited by water availability in the next drought.
  • GMID irrigators paying $20 million a year more for temp water than without the Plan.
  • GMID impacts will be effectively doubled if another 300GL is recovered to make up a shortfall to the 650GL environmental offsets plus the 450GL ‘upwater’.

More information

GMID water leadership forum - Basin Plan – GMID socio-economic impact assessment - 1 page (PDF, 45KB)

Short infographic summary.

GMID water leadership forum - Basin Plan – GMID socio-economic impact assessment - 2 page (PDF, 72KB)

Long infographic summary.

2016-10 - Basin plan - GMID socio-economic impact assessment final report (PDF, 7.52MB)

Full report.

4.    Environmental effects

The 2750GL Basin Plan aims to keep the lower lakes in SA at 0.4m above sea level in 95 out of 100 years; this will maintain access to water for SA farmers on the Murray Swamps. The 2750GL Basin Plan will also meet water quality targets for the lower lakes and Coorong.

The Murray-Darling Basin Authority’s scientific modelling indicates an additional 450GL ‘upwater’ to create a 3200GL Basin Plan will make little if any difference in the lower lakes’ water level or water quality.

For more information on Dairy Australia’s research on the Basin Plan, please contact the manager policy strategy, Claire Miller, on 03 9694 3777, or cmiller@dairyaustralia.com.au

More information

Basin plan environmental summary (PDF, 391KB)

Environmental effects and models (PPT, 2.53MB)

A summary of environmental effects and modelling.

2012-10 - Hydrologic modelling of the relaxation of operational constraints in the southern connected system methods and results (PDF, 2.77MB)

The MDBA report.

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. Regional programs include 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. For more information, please contact your RDP.

Dairy industry response

The Australian Dairy Industry Council is leading the dairy industry’s response to the Murray-Darling Basin Plan’s implementation, in conjunction with state dairy industry bodies and in partnership with the NFF and other commodity and irrigation industry peak bodies.

ADIC Policy Position

  1. Meet the 2750GL target in full before considering the 450GL ‘upwater’.
  2. Review the modelling to account for the full 650GL in ‘downwater’.
  3. Assess the potential socio-economic effects of the 450 GL ‘upwater’ before recovering it. 
  4. Change the socio-economic neutrality test for the 450 GL ‘upwater’ so that it is measured on a community level.
  5.  MINCO should determine the terms of reference for the socio-economic impacts study.

Environmental water efficiency should be maximised before recovering water from irrigation communities.

For more information, please contact Australian Dairy Farmers, 03 8621 4200.