by Peter Fagan, Asia Pacific Sustainability Leader, MWH

22 September 2009 – An article in yesterday’s Australian Financial Review titled, “Farmers reap rich harvest from water” raises a number of serious issues for rural communities.

At a time when rural communities, particularly those in the Murray Darling Basin, are already under threat from the impacts of drought, the issue of water trading between rural and urban uses is a vexed one.

The policy frameworks that are in place at both state and federal levels have the effect of pushing water usage to the areas of highest economic return – city golf courses, for example. Not an unreasonable policy but the real issue is at what level and where that return is measured.

While urban centres have a greater capacity to pay for the actual resource, the full economic and social impacts are never measured in the communities that are most affected. As water is traded out of these rural communities, their social infrastructure and economic stability is undermined. In many cases, these are then replaced with government intervention and assistance from other areas.

At the August APEC meeting in Singapore, representatives from many developing countries (China, India and Singapore, for example) were quick to point out the inconsistencies in Australia’s policies around climate change.

The two issues of concern to many attending delegates were energy and food security. On the one hand, Australia is a proponent for global action on climate change – primarily through emissions trading (which has the potential to limit the capacity of these countries to develop) – yet, on the other hand, Australia is diminishing our own capability to produce food for internal consumption or for export.

The sale of water from our farmers to the federal government, which is then allocated to environmental flows to maintain stressed ecosystems, is impacting our ability to remain productive, harming the social infrastructure of rural communities, and putting at risk other infrastructure investments such as transport, processing and water delivery that support rural industries.

At the same time it is not unreasonable to expect farmers, whether corporate or individual, to make the best decisions they can in order to produce the economic returns they need to survive as a business.
One option in this arena may be to develop the idea of a “water bank” that could enter the market and trade water with a focus on rural production and the maintenance of existing infrastructure assets.

This will ultimately provide a vehicle that is focussed on keeping water available for productive use and, at the same time, provide willing sellers a place to trade their valuable water assets.

Peter Fagan is Asia Pacific sustainability leader, MWH