State of Play: Australian Water Wars in 2019

Lake Menindee in 43 images pic.twitter.com/bHCn06EXfN

— Chris Rawlins 🚙 (@ChrisBH011) January 16, 2019

Time lapse images of part of the Lake Menindee system in the Murray Darling Basin drying up through mismanagement, 2016 to 2018.

It won't be long before multiple talking heads from the Liberal and National parties will be penning opinion pieces in national newspapers and popping up as guests on radio or television accusing those who are acutely concerned, about water sustainability and the plight of the Murray-Darling Basin, of bashing the poor hardworking farmer and telling us that all irrigators are ethical individuals who are only trying to feed the nation.

Now that may be true of some, it probably isn't true of many and it is definitely not true of all irrigators.

The amount of water being taken from Murray-Darling Basin rivers is eye watering.

According to the Murray-Darling Basin Authority (MDBA); Irrigated agriculture in the Basin consumes about 60% of Australia’s available water.¹

Again according to the MDBA, by 2017-18 this 60% was being harvested by only 9,200 irrigated agricultural businesses. 

In 2017 the National Water Account stated that total surface water and groundwater entitlements in the Basin equalled 19,374 gigalitres.

The whole Murray-Darling Basin receives just 6.1 per cent of Australia’s distribution of water run-off and the MDBA admits that approximately 42% of this surface water run-off is diverted from Basin river systems primarily by irrigators.

Professor Sheldon of the Australian Rivers Institute at Griffith University states that more than 50% of average water inflows into the Murray and Darling rivers are extracted for irrigation.

Overall, the Murray-Darling Basin contains 77,000 km of rivers, with flows said to total some 35,000 gigalitres on average.²  A figure which now appears unreliable. 

At the beginning of the 2017–18 water year, the total volume of held water for the environment was nominally about 2,871 gigalitres (in long-term available water terms).³

Science has been telling the Federal Government and the governments of Qld, NSW, Vic and SA that Murray-Darling Basin rivers cannot sustain the rates of water extraction they have been experiencing since the second half of last century and more water needs to be returned to the rivers as environmental flows.⁴ 

Government does not appear to be listening. Probably because implementing an effective response to years of mismanagement of Basin water resources would mean reducing the over allocation of water rights by commencing a policy of permanently buying back at least 7,000 gigalitres of water entitlements from irrigators and reducing the annual amount of water their remaining water entitlements represent.

Here are just three examples of excessive water consumption in the face of declining national water security.

WEBSTER

Webster Ltd (WBA): “Webster owns a diverse portfolio of over 200,000 megalitres of water entitlements, stretching from southern Queensland, through New South Wales to northern Victoria and Tasmania. It’s also fundamental to our strategy of streaming water to areas where we can generate greatest return for each megalitre of water applied…..  we are able to extract further value by exploiting opportunities in water markets. A significant component of this entitlement holding resulted from the acquisition of Kooba along the Murrumbidgee and the subsequent acquisitions of Tandou and Bengerang with significant water entitlements in the Murray Darling Basin. Our portfolio is a complementary mix of high and general security water with supplementary and groundwater entitlements. This scale, diversity and surety of our water holdings underpins our competitive advantage…”

Webster states that its “primary crop focus is on cotton, using technology and expertise to maximise yield and water efficiency, with capability to produce over 200,000 bales of cotton annually”.

Chris Corrigan is the Chairman Webster Ltd and Joseph Corrigan is the Alternate for Chris Corrigan.

Corrigan (formerly Managing Director of Patricks Corporation Ltd who colluded with the Howard Government's attempt to break a union) became chairman of the ASX listed agribusiness in March 2016, soon after it had completed a major takeover. In that play, Webster bought land and water company Tandou, assembling the nation’s top private water rights portfolio, according to Irrigation Australia.

Webster Ltd landholdings include 40,000 irrigable hectares as well as extensive grazing farmland. 

Webster holds its most of its water rights in perpetuity. As at 30 September 2018 the company listed the value of its water rights as $161.9 million.

In 2017 the company sold the water rights at its Tandou property to the Turnbull Government for $78 million which was reportedly almost twice the recommended value of the water.

Current WBA share price is in the vicinity of $1.565. In 2018 the company listed its assets value as $760.44 million. Combined salary & fees received by Webster directors exceeded $1.49 million in that year.

Its substantial shareholders in 2017-2018 were: AFF Properties No 1 Pty Ltd ATF The AFF Operations Trust (14.41%), Verolot Limited (8.92%), Mr Peter Robin Joy (8.43%), Belfort Investment Advisors Limited (5.89%) and Mr Bevan David Cushing as trustee of the KD Cushing Family Trust (5.60%).

CUBBIE

Cubbie Station is an aggregate of three properties owned by CS Agriculture Pty Ltd, which in turn is 20% owned by RF CSAG & 80% Chinese-owned through Shandong Ruyi Technology Group Co.⁵

Cubbie Station is 93,000 ha in size and sources its water from the from the Condamine and Balonne river systems in the upper reaches of the Murray-Darling Basin. 

Cubbie has annual water entitlements of 460,000 megalitres. In addition it holds back in off-river storage up to 45,000 megalitres of surface water from the flood plain. 

Its water storage area covers 12,000ha configured in a cell arrangements with an estimated capacity of 540,000 megalitres. It is reportedly the largest irrigation property in the Southern Hemisphere.

The company’s water storage dams are said to stretch for more than 28 kilometres along the Culgoa River.

Cubbie's principal crop appears to be cotton.⁶

In 2017 the Australian Taxation Office listed the company’s total annual income as $161,911,344.

The value of the Cubbie Station aggregate is est. $350 million.

NORMAN FARMING

Norman Farming Trust trading as Norman Farming has a combined land area of over 18,000 ha across two properties in the Macintyre River delta of the Border Rivers region.

The company has an entitlement of 76,000 megalitres of annual water diversion capable of being pumped at 7,000 megalitres take-per-day, with the potential for 500 megalitres per day of additional water harvesting from rainfall/runoff without an annual limit. An est.1,218ha are used for water storage.

Norman Farming's principal crop is cotton.

Estimated value of the company is $100 million. 

The owner is currently charged with defrauding the Australian Government of $20 million in Murray-Darling Basin water funding.

Webster, Cubbie and Norman Farming between them have annual water entitlements which exceed the volume of water in Sydney Harbour.

Footnotes

1. MDBA, Water markets and trade:

Water in the Murray–Darling Basin can be bought and sold, either permanently or temporarily.

This water is traded on markets – within catchments, between catchments (where possible) or along river systems. This form of trading allows water users to buy and sell water in response to their individual needs. Water trading has become a vital business tool for many irrigators.

The majority of water traded in the Murray–Darling Basin is surface water, however some groundwater also changes hands.

Irrigated agriculture in the Basin consumes about 60% of Australia’s available water….

There are more than 150 classes of water entitlement in the Basin….

Water trading in the Basin is worth about $2 billion annually.

The New South Wales, Queensland, South Australian and Victorian governments are primarily responsible for managing water markets, and each state has its own process and rules for allocating water.

Irrigation infrastructure operators create and maintain trading rules within their networks.

In November 2018 in the NSW section of the Murray-Darling Basin est. 2,988 megalitres of water was transferred between trading parties.

2. For comparison Sydney Harbour is estimated to hold 500 gigalitres.1 giglitre of water equals 1,000 megalitre. 

3. Water theft appears to be an ongoing issue. In 2018 one NSW irrigator pleading guilty to the theft potentially involving billions of litres at a Mungindi property near the NSW-Queensland border, while another at Brewarrina has been charged with taking water when the flow conditions did not permit it, and breaching licence and approval conditions.

4. Initially a scientific assessment by the Murray-Darling Basin Authority identified that 6,000-7,000 GL per year would be required to return the environmental assets of the Murray-Darling Basin to sustainable ecological health. This was reduced by almost half to 3,000-4,000 GL per year in the Basin Guide. Eventually, the Australian Government considered 2,800 GL, even lower than the minimum proposed, was a reasonable target. This was further reduced to 2,750 GL before the Queensland Government agreed to sign up to the Basin Plan, a reduction from the Northern Basin. Reduction of the target by another 70 GL represents a further significant reduction in environmental flows which will exacerbate environmental decline. [Professor Richard Kingsford, Director of the Centre for Ecosystem Science, UNSW, submission]

In 2018, the Turnbull government won support from Labor to amend the amount of environmental water allocated to the system, while the Greens and some senators were opposed. The amendments cut 605 billion litres a year that were allocated from the southern basin's environmental water flows, and 70 billion litres a year from the northern basin's flows. [ABC News, 17 January 2019]

5. The volume of water entitlements owned by businesses with some level of foreign ownership was 1.9 million megalitres at 30 June 2016 or 12.5% of the total volume of water entitlements for agricultural purposes in Australia. Of the water entitlements with some level of foreign ownership, the majority (1.6 million megalitres or 83%) was held by businesses that were more than 50% foreign owned. [Australian Bureau of Statistics, 7127.0 - Agricultural Land and Water Ownership, 2015-16] 

In 2016 in New South Wales in 847,250 megalitres of water entitlements were 100% foreign owned and in Queensland 744,957 megalitres were totally foreign owned.

6. According to the Dept of Agriculture and Water Resources ABARES, the Murray–Darling Basin accounts for around 91 per cent of Australia’s total cotton farms and cotton area. It is estimated that the total area in the Basin under cotton production is 490,000 hectares.If all of this land was planted for cotton in a given year then it is likely that the crops would require somewhere between 2.19 million to 3.82 million megalitres of water.