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QIC Chairman Re-elected
QIC Council has re-elected Lyn Brazil as Chairman for 2005-06. Lyn is an irrigator from the Central Downs who has had a great deal of experience with irrigation issues. Lyn sees water access rights, water pricing and sustainable water use as the key issues for QIC in the coming 12 months.
Anger Rising Over State Water Resource Management Charge
A meeting of irrigators in Emerald on December 8 organised by Fitzroy Basin Food & Fibre dhas called on all Queensland water users to refuse to pay increased government water charges until some independent accountability comes to the process. Fitzroy Basin Food & Fibre intends to work through QIC to initiate a meeting with all water users and government to resolve the issue of proposed water charges and price increases state wide. Water users at the meeting gave a commitment not to pay water charges if the government refuses to negotiate with them.
State Government Announces Policy on SunWater Scheme Prices
The Queensland Government has announced its policy on rural irrigation water prices for SunWater schemes beyond June 2005.
The national water reform initiative requires Governments to remove subsidies from irrigation schemes. Price paths were originally set in 2000 for most schemes, with the aim of moving water prices to ‘lower bound’, which would cover the basic costs of operating, maintaining and refurbishing the schemes. The eventual aim of the pricing reform process is to move towards full cost recovery, including a commercial rate-of-return on assets (‘upper bound’) where practicable.
The current price paths are now coming to a conclusion, and negotiations for setting the new lower bound price paths have commenced. It has been agreed that SunWater’s costs are to be transparent and benchmarked to ensure efficient costs of delivery.
The aim is to implement new scheme prices by 1 April 2006. However, these prices will then only apply until 30 June 2008. The Government decision to set the next price path for only 2 years provides insufficient time to implement lower bound prices and poses a number of problems for rural SunWater Customers:
Further costs, such as expenses incurred by SunWater in complying with Government regulations, and increasing administration costs, will also be passed on to irrigators.
These decisions will significantly affect the cost of water supply to SunWater customers both now and into the future. For example, once these Government decisions are implemented from June 2008, it is likely that irrigation prices and charges will increase by at least /ML on average across all schemes. This excludes annual CPI adjustments.
These increases will have to be paid out of already slim production margins, with little chance of the charges being recouped through increased prices or reduced production costs.
QIC will be embarking on a strong lobbying campaign to make the State Government fully aware of its concerns regarding these policies, and of their potentially severe impact on the irrigation sector.
Joint Meeting of QFF and QIC
The QFF Water Policy Committee and QIC met jointly for the first time in November to address a range of water reform issues. The meeting gave priority to discussing and agreeing on water pricing and charging issues that are to be taken up to Governments and in regional and local areas over the coming months. Representatives at the meeting from both organisations expressed a great deal of concern at the implications of future water prices and charges for their industries, schemes and local communities. Other issues addressed included the contents of the amending Water Bill; progress with water resource planning, particularly Resource Operations Plans; and improved arrangements with SunWater for the engagement of Customer Councils and scheme advisory committees. Joint meetings of the two organisations will continue during 2006.
SunWater Scheme Subsidy Decision Approaching
State Cabinet is expected to deal with the issue of continuing community service obligation payments (subsidies) to SunWater before Christmas. THis is a vital decision for the SunWater price negotiation process, and QIC and QFF are engaged in extensive lobbying ahead of the decision. QIC is pointing out the extreme difficulties that producers would face if the Government sets the CSO to SunWater too low. Both organisations have prepared briefing materials on the key issues with water policy and WunWater prices. These are available from QIC and QFF and will appear on the website in the near future.
Impost on Farm Water Charges Revealed
Answers to State Opposition questions on notice reveal that the State Government expects to raise up to million a year from rural water users from the new Water Resource Management charge set to commence on January 1. The Government's response reveals a range of collections, depending on water use and availability, with up to .6 million coming from the 0 annual charge on stock and domestic water, and between and million from the a megalitre charge.
QIC has raised a number of equity concerns about the charge and unmetered users and between supplemented and unsupplemented users and a concern about the need for a transparent review of DNR&M's costs before the cfharge is increased in the future. QIC is also very concerned that the current round of negotiation of SunWater prices could see an even larger impost on irrigators, with a cumulative effect on farm bottom lines.
ABS RElease on Water Use on Farms
The Australian Bureau of Statistics has released estimates of agricultural water use, sources of irrigation water, irrigaion methods and water traded in Australia in 2003-04. Some interesting results include:
- Total area irrigated increased by 1% with a slight increase in total water used
- One third of irrigation establishments nation wide were irrigating pasture for grazing
- Sugar cane is the predominant irrigated crop in Queensland but the percentage of water applied on this crop dropped to 47% from 54% in 2002-03.
- Application rates remained relatively stable in most states over the 02-03 and 03-40 period with the exception of Western Australia and Northern Territory, where there were significant reductions in rates
- Victoria reported the largest percentage of famrs trading water, with 8.5% purchasing extra water and 5.8% selling water. The national average was 4.8% purchasing and 3.4% selling
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