The Basin Plan at a glance

Claire MillerWater Policy AnalystTrade & Strategy5 December 2012

Basin Plan 2012 - 2024

– 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 2024.

– The Sustainable Diversion Limit (SDL) is 10,873GL for surface water, which means 2750GL of water is to be recovered by 2019.

– 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 2016.

– So the volume ultimately recovered could be anything from 2206GL to 3294GL.

The Sustainable Diversion Limit

Baseline Diversion Level 2009 (GL)

SDL 2019 (GL)

Recovery target by 2019 (GL)

% reduction % reduction with 600GL infrastructure savings

Basin - total 13,623 10,873 2750 21%

Basin excl. interceptions

10,903 8153 2750 25% 20%

Northern excl. interceptions

2541 2151 390 15.3% 9.5%

Southern excl. interceptions

7993 5704 2289 28.6% 23%

Southern disconnected excl. interceptions

369 298 71 19%

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 2019.

• 1500GL in buybacks and State ‘recoveries’ by 2019.

• 650GL in environmental offsets by 2016

• 450GL extra in entitlements from more on-farm and infrastructure savings in the southern-connected system from 2014 to 2024.

If all the above is achieved, it equates to the recovery of 2550GL in entitlements across the Basin (600GL + 1500GL + 450GL = 2550GL).

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

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 2000 320 174.6 -145.4458(438)NSW Murray 1708 262 282.3 +20.3

Lower Darling 55 8 2.8 -5.2

Vic Murray 1662 253 372.8 +119.8425.3

(305)Goulburn 1580 344 333.9 -10.1

Campaspe 113 18 18.4 +0.4

Loddon 89 12 3 -9

SA Murray 665 101 102.8 +2.8 82.8(80)

*ACT pro-rata share of 971GL downstream component: 4.9GL

Groundwater

Baseline Diversion Level 2009 (GL)

SDL(GL)

Goulburn-Murray: Shepparton Irrigation Region (GS8) 244.1 244.1

Goulburn Murray: Highlands (GS8) 38.3 50.5

Goulburn-Murray: Sedimentary Plain* (GS8) 203.5 203.5

Goulburn Murray: deep (GS8) 0 20

Lower Murray Alluvium (shallow; Shepparton Formation) (GS27)

81.9 81.9

Lower Murray Alluvium (deep; Renmark Group and Calivil Formation (GS27)

88.9 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

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.

Implications for GMID

GMID produces 76% of milk in the Murray Dairy region

Pre-Drought

Total feed for dairy: 2.5 mt/DM1543 farms2300 million litres of milk

Current water available, if no further recovery for environment*

Total feed for dairy: 2.0 mt/DM1261 farms1890 million litres of milk

Scenario 1: loss of another 80GL to deliver BP minimum of 2210GL*

Total feed for dairy 2.0 mt/DM1229 farms1840 million litres of milk

Scenario 2: loss of another 196GL to deliver BP commitment of 2550GL*

Total feed for dairy 1.8 mt/DM1130 farms1700 million litres of milk^

*Based on projected GMID milk production in 2012-13, 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.

On-farm water efficiency programs

 Pre 2014-15: 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 2014-15: $1.57b legislated to deliver an additional 450GL primarily from on-

farm works from 2014-2024.

• 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.

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.

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 2013

3. Groundwater in Goulburn Murray Sedimentary Plain – by December 2014

4. Northern Basin SDLs – by 2015

5. First SDL adjustment review – 2016

6. Second SDL adjustment review – 2024

7. Basin Plan impacts advisory report – 2017

8. First 10-year Basin Plan review – 2022

Outstanding issues: benchmark conditions of development; environmental

scoring method; changed funding priorities over next 12 years.

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.