As water supplies remain perilously low across Australia’s drought-stricken east, a group of farmers is launching a $750 million class action against the Murray–Darling Basin Authority. By Mike Seccombe.
NSW farmers’ class action on water
Chris Brooks does not mince his words.
By his reckoning, the Murray–Darling Basin Authority (MDBA), the body that regulates Australia’s most important river system, is “absolutely inept and grossly negligent”.
The politicians who oversee the MDBA are a “mob of morons”, and the party they belong to, the Nationals, is thoroughly “in the pocket” of big agribusiness mates who are, in turn, “stupid, greedy, hungry, selfish bastards”.
“That’s the long and short of it,” he says. “[The Nationals] allowed those big mates and donors, that is, the cotton growers in the northern basin, to take as much water as they liked, unregulated, unlicensed, unmanaged, and subsequently the Darling River stopped.”
But here’s the thing: Brooks’s farm is nowhere near the Darling. It’s at Barooga, about 125 kilometres west of Albury on the New South Wales side of the Murray River. Some 400 kilometres from its confluence with the Darling. When Brooks looks out at the river flowing past his place, it is not dry but at flood levels.
For the past two years though, Brooks has been denied access to any of this water. His allocation, along with other irrigators along the Murray, has been set at zero. It has cost him two years of crops, and by his estimate a couple of million dollars.
And that is why this week lawyers were back in the Supreme Court of New South Wales, for the next step in a class action first mooted in May. What began with just a handful of farmers – seven is the number necessary to initiate a class action – has now grown to some 1000. And they have engaged litigation funders from offshore, in part because many of those farmers are now so cash-strapped after two failed crops they can’t afford to mount the case themselves.
Essentially the argument will be that if the authority had managed the flows in the Darling properly – hadn’t let the Menindee Lakes on the Darling go dry, hadn’t misallocated vast amounts of water to “environmental flows” that don’t actually benefit the environment, hadn’t generally mismanaged the supply of precious water – the irrigators of the Murray wouldn’t have lost their crops.
It’s a huge action. The farmers are seeking $750 million from the MDBA.
But it is part of an even bigger story involving elements of cronyism, corporatisation and climate change that threatens to irrevocably alter life in rural Australia. The current drought is a natural disaster, of course, but there is a political disaster here, too, as becomes clear if we go to the question of why the Murray is running at flood levels during one of the biggest dries ever to affect the basin.
The answer comes down to how the water has been shared between the states that own parts of the river system. Let’s start at the end, in South Australia.
“As much as SA likes to moan, they have got the most secure water supply of anyone in the basin. They are guaranteed a fixed amount every month, shared 50-50 by New South Wales and Victoria,” says Maryanne Slattery, senior water researcher at The Australia Institute and formerly director of environmental water policy at the MDBA.
In the past, Slattery explains, South Australia got 39 per cent of its water from the Barwon–Darling system, which flows down from southern Queensland and through NSW before joining the Murray at the Victorian border.
“But they’re not getting anything out of the Barwon–Darling anymore,” says Slattery, “because it’s all being sucked up in the northern basin.”
Huge volumes of water are being released from the Hume and Dartmouth dams upstream, which were close to full just two years ago, to make up for the shortfall from the Darling and the Murrumbidgee, another tributary that once filled the Murray.
“So I’ve got the river flowing past, in flood, and they won’t give us a sniff of it,” says Chris Brooks. “There’s 4.3 million megalitres in the Hume and Dartmouth dams. Five per cent of that would be enough.”
“The MDBA has wasted, if you like, 1.5 Sydney Harbours of water,” says Slattery, “trying to push all this water through the system for nuts and for SA’s water demand.”
Yes, she said nuts. Hundreds of kilometres downstream from Brooks’s dying crops, a new agribusiness is booming – tree nuts of various kinds, mostly almonds. Australian production grew 250 per cent in the five years to 2015-16 to be worth more than $1 billion. And the great bulk of this – about 80 per cent – comes from the tri-state region where SA meets NSW and Victoria.
These are high-value crops, as the Australian Nut Industry Council attests, returning between 30 and 60 times the gross revenue of growing grains.
But they also need a lot of water. “And they need it every year, drought or no drought,” says Slattery. “So, you have this massive increase in almond production, and with it extra water demand at the end of the system.”
While the MDBA insists the total water take from the basin has not increased, Slattery and others dispute this. But the bigger issues stem from reforms initiated in 2004 – at the height of the millennium drought – which untied water rights from land ownership, allowing water to be traded as a commodity across catchments.
“The water reforms have been a failure,” says Slattery. “We’re seeing big agribusiness, often foreign owned, dominating and surviving at the expense of everyone else. They’ve opened up big new greenfield farms and they are just prepared to duke it out on the market when things are tight. And that has forced up water prices to ridiculous levels.”
The average cost of water in the Murray is now $610 a megalitre – spot prices are $800 or more. It is no longer viable to produce lower-value crops, because the water costs are greater than the value of the crop.
But nut growers, making $2000 to $3000 for each megalitre of water applied to their trees, can afford it. And yet even as other farmers complain about them, they complain about another group – one that does not grow anything at all but simply trades in water as a commodity.
With the urging of these nut farmers, the federal government last month announced an inquiry by the Australian Competition and Consumer Commission (ACCC) into the whole business of water trading, to report at the end of next year. In initiating it, Nationals MP David Littleproud, the federal Water minister, said nearly one in six water traders now are corporations or individuals who do not own land.
The trading regime is incredibly complicated. The ACCC – and the Supreme Court – will have to battle their way through it.
The politics, too, are messy. According to Slattery, the nut lobby now has immense clout with the Nationals, “maybe even more than big cotton and definitely more than existing irrigators on the Murray”. She cites the alacrity with which Littleproud agreed to the ACCC inquiry as evidence of this.
Meanwhile, a breakaway group, the Southern Riverina Irrigators, of which Brooks is chair, is gunning for the Coalition.
At the last NSW election, they threw their weight behind Helen Dalton of the Shooters, Fishers and Farmers Party, who went on to win the seat of Murray from the Nationals. At this year’s federal election, the irrigators endorsed an independent challenger to Liberal MP Sussan Ley. They lost but gave her a scare.
As Brooks sees it, the Nationals have abandoned their traditional constituency in favour of big agribusiness. And the party’s pandering to big water users in the northern part of the Murray–Darling Basin is ultimately to blame for the zero water allocations inflicted on him and his 1000-odd fellow litigants.
“The cotton boys have the Nats in their pocket, that’s for sure,” he says.
The Nationals have always held the water portfolio in NSW. In 2012, the water-sharing plan for the Barwon–Darling was reset, changing some access rules for water extraction, with no community consultation, allowing certain irrigators – mostly big cotton growers – to pump bigger volumes of water and to do it at times of low flows.
For several years it made little difference because rains were good and the rivers had good flows. But from about 2015, when the drought started, water extractions went up dramatically – as much as sixfold – a massive drain on the system at a time of low flows.
Following media reporting of overextraction, various inquiries were instituted – the most recent ordered after a million or more fish died in the lower Darling at the end of last year.
When the draft report was released in July, all hell broke loose politically. Media coverage focused on input from one expert, Professor Fran Sheldon, who suggested excessive water extraction had pushed the Darling below Bourke in “hydrological drought” three years earlier than the upstream section of the river.
The implication was clear: government water policy had seriously exacerbated the consequences of poor rainfall.
The NSW Water minister, Nationals MP Melinda Pavey, immediately attacked the science. When the final report came out this month, it had been watered down. It did not debunk Sheldon’s work, merely recorded that WaterNSW had not done sufficient modelling to either validate or discredit it.
Nonetheless, it said the scientific evidence was “clear” – reduced flows due to drought, water extraction and climate change all had contributed to “poor ecological and social outcomes” downstream from Bourke.
It was a bit of masterful understatement. The situation across the basin is not just poor, it’s disastrous. Not only for farmers, but for entire communities.
Asked recently how many towns now were at risk of running out of water, Pavey would say only it was “too many”. A departmental officer was more precise: it was more than 80, including some big ones.
The political party of the bush blames the weather, but it’s more than that.
As Sheldon tells The Saturday Paper: “We might well be looking at a new normal. We could be seeing the beginnings of what these extended dries are going to look like.”
Already, the Bureau of Meteorology and the CSIRO tell us climate change has reduced rainfall during the April to October growing season across south-east Australia by 11 per cent. Projections suggest droughts will likely be more frequent and extreme as temperatures and evaporation rates rise and rainfall further declines.
But conservative politicians are backing big agribusiness, growing thirsty crops on an arid continent. To borrow Fran Sheldon’s phrase, “hanging our water out to dry”.
This article was first published in the print edition of The Saturday Paper on Sep 28, 2019 as "Hung out to dry".
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