The Victorian Government has released an independent study calling for the Murray Darling Basin Plan to be implemented in a way that avoids extra pressure on farmers from further wide-scale buybacks.
The study supports Victoria’s approach to invest in water efficient infrastructure and measures that balance the competing needs of local communities, agriculture and the environment.
The study shows the socio-economic impacts are real and are being felt across the southern connected basin.
It shows that irrigators are increasingly relying on the allocation market meaning some farming businesses are more vulnerable particularly in dry conditions.
The dairy industry, which sold more entitlements to the Commonwealth than any other industry, is now more exposed to higher water prices and heavily reliant on the allocation market.
The horticulture sector owns more than 40 per cent of high reliability water shares and would also be more vulnerable if there was more demand on the water system.
The report identifies that the Murray Darling Basin Authority needs to do a more comprehensive evaluation of the real socio-economic impact of implementing the Basin Plan.
Victorian Minister for Water, Lisa Neville, said, “While the findings of the report are sobering, it does validate our approach to achieving a basin plan that works. A plan that works is one that is deliverable, adaptable and one that works for everyone.
“This study shows that our approach will ensure we deliver our obligations under the plan and improve the river’s health in a way that is not detrimental to local communities.
“Agriculture is the powerhouse of the Victorian economy and we must balance the competing needs of agriculture and the environment. “
The Victorian and NSW governments have appointed an independent expert panel to review the offsets mechanism in the plan. The review will inform the governments on how to deliver real environmental outcomes without short-changing basin communities.
The socio-economic study and outcomes from the expert panel process will inform discussions at the next Ministerial Council meeting to be held in late March 2017.