Appendix C
Rice Industry Case Study
Page 39
RICE INDUSTRY CASE STUDY
11/10/2010
Contents
1
Introduction ........................................................................................... 1
1.1
2
3
4
Approach for this case study ................................................................ 1
The Australian rice industry .................................................................. 2
2.1
History .................................................................................................. 2
2.2
Rice growing areas............................................................................... 2
2.3
Industry significance ............................................................................. 3
2.4
Trends .................................................................................................. 3
The Central Murray Rice Industry ......................................................... 5
3.1
History of the rice industry in the Central Murray ................................. 5
3.2
Recent drivers of change ..................................................................... 5
3.3
Industry Snapshot ................................................................................ 7
3.4
Rice Processing ..................................................................................10
3.5
Water usage ........................................................................................11
3.6
Industry innovation and adaptation (economic and production) ..........13
3.7
Industry Performance ..........................................................................17
3.8
Challenges ..........................................................................................18
3.9
Industry viability ...................................................................................19
Conclusion .......................................................................................... 22
4.1
References ..........................................................................................23
1 Introduction
The Central Murray Strengthening Basin Communities project will assist the Riverina and Murray Regional
Organisation of Councils (RAMROCs) Cluster Group plan for a future in which water sustains food
production, industry, communities and the environment. The rice industry has provided a significant
contribution to gross regional productivity. It accounts for a large proportion of Australia‘s rice production.
Rice production has been dramatically reduced due to prolonged drought and policy-induced changes in
water security. This downturn in production has in turn triggered substantial flow on effects in the Central
Murray Region for processing industries as evidenced by the closure of the Deniliquin rice mill in 2006 ,
support services such as transport and agricultural contracting and the farm input supply chain such as
fertiliser, agricultural chemicals, fuel and machinery.
The purpose of this case study is to:

Understand the value of water in the production of rice

Determine current rice industry adaptation strategies in responding to less water

Assess the vulnerability and viability of the rice industry to continuing or worsening water security
1.1 Approach for this case study
This case study was based on a desktop review of literature and data relevant to both the rice industry in
general, and specifically the Central Murray. The range of information sources reviewed was:

Australian Bureau of Statistics (ABS) reports

Access Economics rice statistics

Industry publications such as Ricegrowers‘ Association of Australia and SunRice

Irrigation company publications.
Face to face interviews were also conducted with 13 rice growers in the region. The focus of the interviews
was to determine what growers identify as the major changes in the rice industry over the last 10 years, and
the drivers of changes. Rice production and farm management across a range of issues such as water
trading and revenue diversification were also examined. Rice growers were also asked for their likely farm
management response to three future water availability scenarios to provide an indication of future rice
industry viability in the Central Murray region. The Central Murray Councils and the Ricegrowers‘ Association
of Australia provided a list of rice growers for interview.
5 1
2 The Australian rice industry
2.1 History
Rice was first grown in Australia in 1914 when 200 acres of flood prone land on the Murray River near Swan
Hill was used to demonstrate the cultivation of rice from Japan. The first commercial rice crop was grown in
1924 in the Murrumbidgee Irrigation Area around the townships of Leeton and Griffith.
By 1928 the industry began operating under statutory marketing arrangements in NSW, with the
establishment of the Rice Marketing Board, which by 1950 became a vertically integrated, grower owned
cooperative. Since then the growers‘ company, SunRice (Ricegrowers‘ Limited) receives, stores, mills,
processes, packages, sells and ships rice products for the domestic and export markets.
Since the first successful crop was sown in 1914, Australian rice growers have adapted to Australia's unique
climatic conditions with innovative farming techniques to produce a crop conducive to the local landscape.
Since 2006 rice production has fallen dramatically resulting in consideration of growing rice in Northern
Australia and outside the traditional South-East Australian growing area.
A historical overview of the development of the Australian rice industry is presented in Figure 1.
Figure 1: History of the Australian Rice Industry (adapted from Sun Rice 2005)
2.2 Rice growing areas
The prominent area for growing, harvesting, transporting, storage, processing, value adding and marketing of
rice is the south western irrigation areas and districts of NSW, principally the Murrumbidgee, and
Coleambally Irrigation Areas and the Murray Valley Irrigations District (see Figure 2). The major towns in this
rice growing region include Griffith, Leeton, Deniliquin, Jerilderie, Finley, Coleambally and Hay.
Rice growing is concentrated in this area due to irrigation infrastructure, availability of water, large areas of
flat land, suitable clay-based soils and the development of storage and milling infrastructure in or near the
regional towns. In more recent years rice growing has also expanded into Queensland and the Northern
Territory, particularly under the Ord River area, however these regions account for a very small portion of the
overall rice production.
2
Figure 2: Australian rice growing regions (http://www.aboutrice.com/facts/fact03.html)
2.3 Industry significance
Rice is Australia‘s third largest cereal grain export, and the ninth largest agricultural export. SunRice has a
turnover of approximately $800 million per annum, with around $500 million of this coming from exports.
Value-added exports contribute about $400 million to these earnings with 70% of Australia‘s rice production
exported to over 70 international markets, including the Middle East, Japan and Hong Kong. According to
SunRice the rice industry supports the direct employment of over 7,000 people across Australia and
indirectly the employment of a further 33,000 people, mostly in regional Australia. (SunRice, 2010).
2.4 Trends
Australia‘s annual rice production is directly related to the amount of water available. Most rice is grown by
general security irrigators who receive their water last in the hierarchy of allocations. They are also the first to
have allocations reduced in times of water shortages. Traditionally, Australian farmers produced around 1.2
million tonnes of rice each year. However, over the past few years, production levels have severely
plummeted due to drought and water restrictions. Trends in Australian rice production output are shown in
Figure 3.
5 3
Figure 3: Australian rice production output (1999-2009) (SunRice)
Recent trends in Australian rice production can be summarised according to the following:
4

Rice production between 1999 and 2002 averaged more than 1.3 million tonnes per year.

Rice production fell to 360,000 tons for the period 2003-2009 in response to reduced water availability.

The 2008 rice crop of 19,400 tonnes is the lowest in the Australian rice sector‘s history (since 1928),
representing just over 1% of normal production. This is not surprising given rice is an opportunistic
crop in its fifth year of drought (Sunrice, 2008).

2006 annual production of approximately 1 million tonnes is an anomaly attributable to an advance of
growers‘ future years‘ water.

Rice production in 2010 from the crop harvested was 205,000 tons (Sydney Morning Herald 10
September 2010)

The 2011 crop is expected to yield around 600,000 tons (Ruth Wade, SunRice pers comm. 17/09/10).
This increase is attributable to improved water security whereby many growers have access to carry
over water from 2009 combined with early allocation announcements of 30 per cent for general
security water entitlements.
3 The Central Murray Rice Industry
3.1 History of the rice industry in the Central Murray
Rice production began in the Murray Irrigation region at Wakool during the 1914-18 World War to support
war time food production. The rice area expanded in the Murray through 1950‘s with producers growing
under a permit system (50 acres of rice per year) on suitable soils. A brief history of the Central Murray rice
industry is outlined below:

1955: 310 growers in the Murray Valley (SunRice, 2005)
Rice area in the Murray was restricted by the rice permit system until the second half of the 1960.s
when new growers were allowed to grow rice under permit.
Rice prior to this expansion was restricted to the Deniboota, Wakool and Denimien irrigation districts
only. This expansion saw rice growing permitted in the Berriquin district for the first time.

1974: 24,927ha developed for rice in the Murray Valley producing 139,184 tonnes

1981: 140 additional rice growing permits were issued in the Murray Valley

1987: rice now grown wherever the soil was suitable, the end of the permit system

1990’s: further growth in the area sown in the Murray with significant productivity increases

2000: was a record production year in the Murray

2002-2009: significant drought period with huge reduction in annual production.

2010: improved outlook for the Central Murray rice industry due to improved water availability.
Although high levels of industry uncertainty prevail due to proposed introduction of sustainable
diversion limits under the proposed Basin Plan (Neil Bull, pers comm. 8/10/10).
3.2 Recent drivers of change
A diverse range of responses were generated from rice growers when asked about what they saw as the
major changes to the rice growing industry in Central Murray r over the last 10 years (Table 1). The most
common change was reduced water availability/allocations. This is not surprising considering the direct effect
water availability has had on rice production. Four growers also noted the development of more suitable rice
varieties as being a major change. None of the respondents identified improvements in technologies such as
laser levelling and water recycling as a major change.
Interestingly, a range of social changes, including population decline, declining community morale, labour
scarcity and loss of businesses and community services ranked highly as being a change in the rice industry.
This issue is summed up by one grower who stated there is “less vibrancy in the community”.
5 5
Table 1: Major changes to the rice growing industry in the rice industry, as identified by local rice growers
Major changes
Number of
responses
Reduced water availability/allocations
10
Development of more suited rice varieties (e.g. cold tolerant & use less water)
4
Population decline (young people leaving the area; aging population)
4
Loss of businesses in rural centres
3
Decreasing community morale (increasing suicide rates, less optimistic)
2
Labour scarcity
2
Loss of services – community & industry (e.g. DPI agronomists)
2
Drought
2
De-regulation of marketing arrangements (removal of single desk)
2
Rising input costs (e.g. fertilisers)
2
Limited research & development (government & industry)
2
Increased dependency on other revenue streams; diversification of revenue sources
2
Timing of announcements of water allocations
1
Mill closures
1
Lack of rice crops
1
Over-importance of climate change
1
The drivers of the changes shown in Table 1 are s presented in Table 2. The main driver is a lack of water as
a result of drought. Government water policy, in particular environmental water allocations and buy-backs
were also seen as having a large influence.
Table 2: Causes of changes, as identified by local rice growers
Causes of change
6
Number of
responses
Lack of water; Drought
13
Government policy; Environmental water demands & buybacks
5
Lack of government funding (R&D, extension, etc)
11
Lack of government planning
1
Declining terms of trade
1
Limited diversification opportunities; too reliant on
agriculture
1
Mill closures
1
3.3 Industry Snapshot
This industry snapshot for the Central Murray rice industry has been compiled using 2005-06 Australian
Bureau of Statistics agricultural census data. The Central Murray Rice Industry includes the Shires of
Berrigan, Deniliquin, Conargo, Jerilderie, Wakool and Murray. In 2005/6 there were 590 registered rice
growers in the Central Murray. It accounts for a significant proportion of Australia‘s rice production.
 In 2005/6 the Central Murray rice industry generated a local production value of $137.470M, accounting
for approximately 50% of Australian rice production.
 In 2005/6 52,750ha of rice was grown in the Central Murray region, accounting for 52% of the Murray
Darling Basin‘s area sown for rice.
 In 2005/6 503,556 tonnes of rice was produced in the Central Murray Region, accounting for
approximately half of Australia‘s total rice production output.
 Reduced access to general security water entitlements has significantly impacted rice production output
over the past 6 years. Although, this situation is set to improve for 2010/2011.
Farm size
The average size of an Australian rice farm is around 400 ha. In 2005-06 rice accounted for 5275 ha, 2.3%
of the Central Murray‘s farmed land, accounting for 17% of the its irrigated land (Access Economics 2010).
When asked if the size of their rice farm had changed over the past 10 years, six of the 13 respondents
stated that there had been no change, while the other seven stated an increase in size or additional land
purchases. The following are the size increases and comments from growers regarding the need to expand:

Purchased another farm of 214 ha. “Low water years demand greater acreages”.

Doubled the size from 300 ha to 600 ha.

Increased extent by 809 ha.

11,000 ha dryland, 1,000 ha irrigation, 450 ha deep bore irrigation. “Had to grow to survive. Bought
land to be versatile to increase stock”.

Purchased 374 ha of adjoining land

Purchased two additional dryland properties, including one outside Central Murray.
Production
The 2006 harvest for the Central Murray was 503,556 tonnes, accounting for half of Australia‘s production for
this period (Figure 4). Production declined significantly for the 2007 harvest to 51,695 tonnes in response to
drought and low general security allocations. Eight of the 13 rice growers surveyed in Central Murray have
not grown rice since 2005/6 due to drought.
“If there’s no water there’s no rice”
5 7
1,100,000
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Ha
tonnes
Central Murray
Southern Murray
Darling
Australia
Figure 4: Rice production in the Central Murray Region compared to Southern Murray Darling Basin and Australia (Access
Economics, 2010)
Figure 5 shows the gross value of rice production for each Central Murray Council for the period 2005/6.
Conargo accounted for the greatest gross value production ($38.2M) followed by Jerilderie ($36.8M), Wakool
($30.2M), Murray ($16.1M), Berrigan ($14.4M) and Deniliquin ($1.7M).
Wakool,
$30,190,555
Conargo,
$38,239,778
Jerilderie,
$36,771,775
Murray,
$16,117,857
Deniliquin,
$1,747,559
Berrigan,
$14,403,200
Figure 5: Gross value of rice production for Central Murray Shires for the period 2005/6 (Access Economics, 2010)
Income and profitability
Farm cash income for broadacre farms increased 23% to average $67 652 in 2007-08. This is likely to be
attributable to increased production of rice and higher prices for rice. However,
Table 3 shows farm business profit equated to an average loss of $36 607 in 2006-07 where the average
loss increased significantly to $57 131 in 2007-08. The average rate of return to capital for irrigated
broadacre farms in the Murray Region of -0.7% in 2006-07 to -0.2% in 2007-08 (ABARE, 2010).
8
Table 3: Financial performance of irrigated broadacre (including rice) farms in the Murray Region (ABARE, 2010)
Farm cash income
1
Farm business profit
2
Rate of return
3
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
54 939
67 652
-36 607
-57 131
-0.7
-0.2
Farm financial performance for rice producers is likely to have remained weak in 2008-09 due to record low
water allocations in Central Murray. For the 2009/2010 growing season financial performance improved,
although not uniformly across the region in response to SunRice offering a medium grain paddy price of
$550 per tonne. Financial performance in the Central Murray rice industry is expected to increase in 2010-11
due to an improved water resources outlook.
Equity
Rice grower survey respondents highlighted significant economic pressures in recent years. Six of the
respondents stated that their equity had been eroded due to increasing debt levels. According to ABARE
(2010) around 13 per cent of irrigation farms in the Murray Darling Basin were characterised by low income
and low farm business equity. These farms are facing greatest financial pressures and are likely to
experience difficulty in servicing their debt in the short-term. One of the rice growers surveyed highlighted the
following:
“At the start of the drought our enterprise equity was 90 per cent. In 2010 this has decreased significantly to
65-70 per cent”
According the MDBA (2010), rice farmers hold nearly 60 per cent of their assets as water assets. The NWC
(2010) reported that many rice farmers in the Murray Darling Basin sold their limited water allocations and
reduced or ceased annual rice production to generate higher net incomes during the recent drought. Returns
from water sales were often far greater than those that could be received from producing rice (NWC, 2010).
The sale of water allocations is also less risky than rice production.
Government Support (EC Payments)
All 13 Central Murray rice growers surveyed were receiving government ‗Exceptional Circumstance Support‘,
primarily in the form of interest rate subsidies. There was general consensus across growers surveyed
regarding the importance of this support in maintaining their viability during drought. The following are
comments recorded by growers on EC payments:

1
“Fantastic, would probably be still in business but would have had to do something dramatically
different”
Farm cash income shows the difference between total cash receipts and total cash costs.
2
Farm business profit refines farm cash income by accounting for changes in trading stocks and deducting depreciation
and imputed value of farm labour.
3
Rate of return is defined as farm business profit with the interest, lease and rent payments added, expressed as
percentage of total farm capital.
5 9

“EC subsidies are vital”

“Very helpful; kept us viable”

“Would not have survived without EC subsidies”
Production statistics / yields
Australian rice growers surpassed the international average production of 5.4 tonnes per hectare 45 years
ago. The Australian rice industry averages 8.6 tonnes per hectare - although drought has severely impacted
on recent yields (Australian Bureau of Statistics, Agricultural Commodities 2007/08). The 2007 growing
season rice production yield for the Murray Growing region was 7.8t/ha (Table 4) (ABS 2010). In 2010
Riverina growers delivered record breaking yields of 11 tonnes per hectare across three main grain varieties,
Amaroo, Retziq and YRM 69 (SunRice 2010a and the Australian 2010).
Table 4: Rice production since 2007 (for year ended 30 June) (ABS, 2010)
Rice for grain
Murray
Murrumbidgee
Estimate
Number of
agricultural
businesses
Estimate
Number of
agricultural
businesses
Area (ha)
1,171
21
6,023
139
Production (t)
9,173
51,695
7.8
8.6
Yield (t/ha)
Economic contributions
The rice industry contributes to the local economy in a number of ways. When water is available it generates
substantial income for the region. The production value of the Central Murray rice industry in 2005/6 was
$137.4 million (Access Economics, 2010). The rice industry also provides a source of employment for many
workers, both directly and indirectly in the Central Murray. The rice industry creates employment for rice
farmers as well as contributing to the employment of contractors and jobs in rice processing. The Deniliquin
rice mill alone employs 90 people during operation (The Australian, 2010).
3.4 Rice Processing
Deniliquin is home to the largest continuously operating rice milling plant in the southern hemisphere. This is
the fourth largest rice mill in the world. It services the Denimein and Deniboota Irrigation Areas and is part of
the vast Riverina Rice Growing Area where over 2 340 farmers produce over 750 000 tonnes of rice. In 2008
the rice mill closed in response to reduced water availability which almost eradicated national rice production.
Rice producers are optimistic about the re-opening of the rice mill in Deniliquin in late 2010 (Ruth Wade
SunRice pers comm. 17/09/10). This is directly linked to improvements in water availability in the Lower
Murray Darling Basin (LMDB) where dam levels have increased to approximately 64 per cent of capacity as
of September 8 2010 (Sydney Morning Herald 10 September 2010).
10
3.5 Water usage
Total water use data for rice production for the year 2005/06 for Central Murray was 627,927ML. This water
accounted for a significant proportion, 52 per cent of Australia‘s overall water use for rice production (Figure
6). Conargo, Jerilderie and Wakool Shires collectively accounted for 76 per cent of Central Murray Water use
for rice production in the year 2005/06 (Access Economics, 2010).
173,514
Conargo
167,085
Jerilderie
Central
Murray
139,585
Wakool
48%
80,327
Murray
52%
Other rice
growing
regions
59,422
Berrigan
7,994
Deniliquin
0
50,000 100,000 150,000 200,000
Irrigation volume (megalitres)
Irrigation volume (megalitres)
Figure 6: Rice water usage for the year 2005/06 in the Central Murray Region (Access Economics, 2010)
In 2005-06, the agricultural commodities that used the most water in the MDB were (ABS, 2006):

cotton - 1,574 GL or 20% of water used for agricultural production in the MDB

dairy farming - 1,287 GL or 17%

pasture for other livestock - 1,284 GL or 17%

rice - 1,252 GL or 16%.
Data provided by Murray Irrigation Limited shows water usage by rice farmers in the Murray Irrigation Area
over the last five years. Table 5 shows the high variability in water usage by rice farmers in the Murray
Irrigation Area over the last five years. Water usage in 2009/10 was less than 10% of that used by rice
farmers in 2005/6. In 2009/10 41,831 ML of water was used by rice farmers in the Murray Irrigation Area.
This represented 26% of the total volume of water used in the region.
Table 5: Water usage by rice farmers in the Murray Irrigation Area (Murray Irrigation Limited, 2010)
Year
Water usage by rice
farmers in the Murray
Irrigation Area (ML)
Total water usage in
the Murray Irrigation
Area (ML)
% of water used in the
Murray Irrigation Area
by rice farmers
2005/6
471569
985001
47%
2006/7
10277
222685
5%
2007/8
108
29491
0.3%
2008/9
2781
69279
4%
41831
161454
26%
2009/10
5 11
The Murray Irrigation Limited Rice Growing Policy (Murray Irrigation Limited, 2007) is aimed at reducing
watertable rise across the region. There are two parts to the policy. Firstly, rice can only be grown on a
paddock that has been tested and approved by Murray Irrigation as suitable for rice growing. Secondly, a
maximum rice crop water use figure is calculated each year based on the Rice Environment Policy Advisory
Group (REPAG) agreed method of calculation; taking into account seasonal rainfall, evaporation and the
crop water use requirement. In 2005/06 the average volume of water used for rice production was
12.2ML/ha.
The rice industry has strived to improve rice water use efficiency. Table 6 shows the results of an experiment
undertaken at Yanco during the 2008-2009 season, using various irrigation treatments for medium grain rice
variety Quest. A second year of the delayed permanent water treatment experiment was also undertaken in
2009-10. The delayed permanent water treatments used 2.2 Ml and 3.2 ML/ha less than the conventional
drill treatment method.
Table 6: Rice grain yield, water use and water productivity for various irrigation treatments based on experiment
undertaken at Yanco Agricultural Institute (Dunn et al 2010)
Irrigation Treatment
Grain Yield
(t/ha)
Water use
(ML/ha)
Water
Productivity
(t/ML)
Aerial sown
11.4
17.1
0.67
Conventional/drill
13.4
15.0
0.89
Delayed Permanent Water
80mm
12.3
12.8
0.97
Delayed Permanent Water
160mm
12.2
11.8
1.04
Consequences of reduced water availability
The recent drought led to a major decrease in water availability in the Central Murray. According to the NWC
(2010) to generate income during the drought, rice irrigators typically sold their limited water allocations and
further reduced or ceased annual rice production. Water is a key input to rice production, so production
changes significantly from year to year in response to seasonal water availability (NWC, 2010). The
consequence of this opportunistic approach is that rice is generally only grown when sufficient water is
available at a reasonable price. Figure 7 shows the relationship between water use and rice production in the
Murray Valley.
Figure 7: Rice production in the NSW Murray region, 1998–99 to 2007–08 (NWC, 2010)
12
In response to increased global demand, Sunrice, a large producer of Australian rice, raised the price paid to
farmers from $328 per tonne of paddy in 2007–08 to $450 per tonne in 2008–09 (NWC, 2010). However,
despite the relatively high prices offered for rice in 2007–08 and 2008–09, irrigators did not produce large
volumes of rice because greater returns could be generated by selling limited water allocations to
horticulturalists (NWC, 2010). Mean prices for water allocations in the Murrumbidgee irrigation system were
$566/ML in 2007–08 and $375/ML in 2008–09 (NWC, 2010).
Table 7 shows that in 2000/1 10 out of the 13 rice producers surveyed used some or all of their water
allocation to grow rice. The number of rice growers surveyed who used their allocations to grow rice
decreased to 7 in 2005/6 while only four growers used their allocation in 2009/10.
Table 7: Central Murray rice grower survey respondents who used water for rice production
Rice growing season
No. of respondents who used water
allocation for rice production
2000/1
10
2005/6
7
2009/10
4
Section 3.6 outlines a number of industry innovations and adaptations that have been undertaken by rice
farmers in the Central Murray as a result of reduced water availability. When sufficient water is available rice
is the preferred summer crop with an alternative crop grown over the winter period.
When water is not available for rice farming other sources of income are generated by rice famers. This
includes selling water allocations. Six respondents to the rice survey also used livestock, particularly sheep,
as an alternate source of income over the last five years. A number of respondents to the rice survey also
had off-farm sources of income. These included investments in the share market, off-farm employment,
contract sowing and harvesting and operating a produce store.
3.6 Industry innovation and adaptation (economic and
production)
The reliability of water supply for general security water users has decreased significantly since 2002/03
(Figure 8).
Figure 8: Average annual water allocation for high and general security water users
5 13
In 2006 in the Murray Valley there was no water allocation for general security irrigators, in fact,
general security irrigators have not received 100% of their allocation for several years. (About Rice
Factsheet 8)
The prolonged dry spell and consequential reduced reliability of water supply for rice production has forced
rice growers in the Central Murray to adapt, making fundamental changes to the way they farm. These
adaptations are shown below.
3.6.1
Water trading
Water markets have been critical in reducing the impacts of drought for rice growers. The overall movement
of water from rice to horticulture out of the Central Murray irrigation districts in the southern system is much
less than the reductions due to drought (Frontier Economics, 2010). Table 8 shows the water transfers in the
temporary market that have taken place in the Murray Irrigation Area by rice farmers over the last six years.
It shows that except for 2007/8 rice farmers in the Murray Irrigation Area have bought more water than sold
water for each of the last six years. In 2009/10 45,695 ML of water was bought by rice farmers in the Murray
Irrigation Area and 13,828 ML was sold. The net difference was a transfer in of 31,867 ML.
Table 8: Water transfers made by rice farmers in the Murray Irrigation Area (Murray Irrigation Limited, 2010)
Year
Temporary water
purchased by rice farmers
in the Murray Irrigation
Area (ML)
Temporary water sold by
rice farmers in the Murray
Irrigation Area (ML)
Net change
(ML)
2004/5
122530
59484
63046
2005/6
283925
108203
175722
2006/7
22161
13496
8665
2007/8
51
107
- 56
2008/9
2394
497
1897
45695
13828
31867
2009/10
Note: these transfer figures include internal transfers within Murray Irrigation Limited (including water exchange), plus external trade that
might be to or from a licence held by the same landholder.
Survey responses
Participation in water trading was common among the growers interviewed, with 10 selling temporary water
allocations and three permanent water entitlements. The most common reason for selling water was to pay
debt (4) and/or to generate operational revenue (3). One grower purchased farm infrastructure. In all
instances the decision to sell water was based on the price of water reaching a critical level.
According to Kooloos and North (2007) returns per megalitre are low for the most limiting resource i.e. water.
This low return per megalitre places a heavy reliance on businesses to maintain scale (ML/family) and the
high per hectare water use makes production sensitive to water price and availability. If crop profitability is
high enough and water is affordable, rice growers will buy water to supplement allocations. Over half of those
interviewed also participated in purchasing water, mostly to grow or finish rice crops (6), with one grower
following this up with a wheat crop.
14
“The purchase of water guaranteed the ability to complete the existing investment in a rice crop, However it
did impact the profitability”.
However, if the price of water is higher (can be triggered by low allocations), and/or crop profitability is lower,
rice farmers will sell their water. One grower highlighted this via the following comment:
“If you can get $200 per ML for water, then you can’t afford to grow (rice)”.
Sales and purchases of water allocations and entitlements for rice growers surveyed in Central Murray is
shown in Table 9.
Table 9: Sales and purchases of water allocations and entitlements for rice growers surveyed in the Central Murray Region
Sold a water entitlement
Sold a water allocation
Sell water again
Purchased water?
No
Yes (200 ML general
security)
Yes, if price is right
No
No
No
No
Yes (200 ML @ $650/ML)
No
None to sell (general
security)
No
Yes (temporary)
Yes, if price is right
Yes (100 ML general
security @ $1000/ML)
No
Yes (temporary)
No
No
Yes (830 ML @
$1412/ML)
Yes (200 ML temporary @
$210/ML)
Yes, if price is right
No
No
Yes - several seasonal
trades
Yes
Yes - regularly
Yes (1,000 ML general
security)
Yes, twice
Yes
Yes (600 ML temporary
water @ $100/ML
Yes (360 + 420 ML
general security)
Yes
Yes, if price is right
Yes, temporary & deep
bore
No
Yes
Yes, if price is right
No
No
No
N/A
Yes (650 ML)
3.6.2
Yes, if price is right
Yes (200 ML; temporary)
Yes (100 ML; general
security)
Water use efficiency
Over 1996-2006, Australian rice growers improved their water use efficiency by 60% (Australian Bureau of
Statistics, Agricultural Commodities 2006). Water recycling systems are encouraged, as careful monitoring
by Irrigation Companies of drainage water entering drainage schemes must meet Environmental Protection
Agency (EPA) standards.
Eight of the 13 rice growers surveyed had undertaken total farm planning under the Land and Water
Management Planning process to improve on-farm water use efficiency. Examples of water use efficiency
measures implemented by Central Murray rice growers are:

Laser levelling has been undertaken to deliver precise control over the flow of water on and off the
paddock. This has improved layout of rice bays and resulted in reduction in time and water required to
5 15
irrigate the field, more uniform distribution of water in the field and more uniform moisture environment
for crops.
“Laser levelling means that I now can wait until December before I fill my rice bays”

Water recycling, drainage reticulation and storage systems minimise on-farm system water losses and
promote water use efficiency.

Direct drilling or combine sowing of rice seed has enabled rice bays to be filled later in the growing
season, therefore promoting greater water use efficiency.

Delayed permanent water involves drill sowing rice, followed by flush irrigations and permanent water
application later in the growing season (i.e. December).

Shorter season rice varieties (e.g. YRM 69) which require substantially less water to grow.
Many of the rice growers surveyed also implement a double cropping system whereby crops are sown
directly into the remaining soil moisture following harvest of the rice crop. This delivers two crops from one
application of water. A selection of quotes from rice growers highlighting this issue are:
“If you look at rice as part of an annual cropping cycle, the water used per tonne of food produced presents a
far more compelling equation than that of rice viewed in isolation”
“One year I’ll grow rice in a paddock and after harvest I’ll directly sow in a wheat crop. I am getting
two crops from the same water because I utilise the moisture remaining in the soil from the rice”
Future innovations in water use efficiency
There are likely to be no silver bullets for achieving further improvements in water use efficiency with regard
to innovation in the rice industry. Future innovation will likely include incremental solutions across a range of
th
areas (L Gordon 2010 (SunRice), pers. Comm., 30 November), Examples of recent and future innovations
in the rice industry include:

Additional cold tolerant varieties (e.g. YRM 69) resulting in further yield improvements.

Aerobic rice is currently being researched by SunRice as an alternative growing method. This has the
potential to achieve higher yields, reduce water use and non-productive outflows. This method has the
potential to achieve step changes in water use but is probably 15 years away from wide spread
application.

Alternative wetting and drying of rice bays can achieve up to 10 per cent gains in water use efficiency.

On-farm and corporate irrigation total channel control system application can yield significant
improvements in water use efficiency. This system is currently being piloted at the SunRice Jerrilderie
st
Research Station (R Ford 2010 (SunRice). pers. Comm.. 1 December)
3.6.3
Diversification – alternative income streams
A diversity of on-farm and off-farm revenue sources, other than growing rice, was identified by all growers.
When sufficient water is available rice was selected as the most financially attractive summer crop. Alternate
crops are generally planted during winter. These include cereals such as wheat and barley (12) and/or oil
seeds such as canola (5). Over the last five years the stocking of livestock, particularly sheep for meat and
wool was listed by six growers as an alternative income source, while two were also running cattle. Water
trading was also a revenue source (see Section 3.6.1). Off-farm sources of revenue included investment in
shares (stock market and Sunrice), racehorses, off-farm employment, contract sowing and harvesting and
operating a produce store.
All the growers interviewed stated that the dependency on alternate sources of revenue increased in the last
five years. The success of alternate revenue sources is encapsulated within the following responses:

16
Depends on the drought e.g. sold all sheep during the drought

Failed due to drought

Not very successful; in three of the last four years have not planted crops due to drought

Sheep have been successful; dryland cropping unsuccessful

Moderately successful due to rainfall

Good, depending on prices (e.g. oats has increased from $120/tonne to $400/tonne)

Moderately successful due to issues with water security.
3.6.4
Value-adding (SunRice)
SunRice exports 85% of Australia's , rice as value-added branded
products to over 70 countries including the Middle East, Japan and
Hong Kong. By–products from the growing and processing of rice
create many valuable new products. Rice husks, rice stubble, rice
bran, broken rice and rice straw are used as common ingredients in
horticultural, livestock, industrial, household, building and food
products. (About Rice factsheet - The Rice Growing and Production
Process).

Rice stubble: comprises the stalks and roots of the rice plant
left in the ground after it has been harvested. Rice stubble is
very thick and difficult to deal with. Livestock graze on
recently harvested paddocks and eat some of the rice stubble. A portion of the remaining stubble is
usually burnt off and a winter cereal crop, such as wheat, is planted. On some rice farms, rice stubble
is left to break down naturally and is incorporated into the soil, to improve the soil structure.

Rice bran: is the outer layer of the brown rice grain. The rice bran is removed during the milling
process for the production of white rice. Stabilised rice bran is sold as a health food product in
supermarkets and health food shops, or to food manufacturers who use it as an ingredient in foods
such as crispbreads and breakfast cereals. Unstabilised rice bran is used in stockfeed and for other
animal and industrial products.

Broken rice grains: during the rice milling process some of the rice grains break, these are removed
from the milling process. The larger broken rice grains are used in pet foods and stock feed, or
breakfast cereals. The smaller broken rice grains are ground into rice flour which is used in baby
foods, snack foods, including rice crackers, muesli bars, or as a baking ingredient. Ground broken rice
grains are also used in manufactured foods, such as sausages and milk powder drinks.

Rice straw: is the stalks left over after the grains of rice have all been removed in the milling process.
Rice straw is used as a building material because it is easy to work with, inexpensive and good for the
environment. Some dairy farmers use rice straw as fibre for grain–fed stock. It can also be used to
make paper.
3.7 Industry Performance
The decline in the terms of trade for agricultural commodities and the increasing cost and decreasing
availability and reliability of irrigation water is affecting rice industry profitability. These pressures are likely to
increase rather than decrease. Rice growers have maintained their profitability by increasing the scale of
their enterprises and buying i water but this strategy is becoming difficult to achieve.
Although many growers are optimistic about the long-term viability of the rice industry, particularly given the
improved outlook regarding water availability, many of the survey respondents noted that long term reliability
of water supply is critical factor which will govern long term industry performance. The industry has
implemented significant improvements in water use efficiency in response to increasing public scrutiny and
reduced water availability. However, many growers surveyed noted that the introduction of the Basin Plan,
5 17
incorporating Sustainable Diversion Limits (SDLs) has the potential to significantly impact availability of water
under General Security Allocations. This was unequivocally identified by all growers as the greatest threat to
long term industry performance.
The rice growers interviewed were also asked to indicate their likely farm management response to three
water availability scenarios, as presented below.
Option
Scenario 1:
Scenario 2:
Rainfall levels
returning to the longterm average
Rainfall levels return
to the long-term
average, with water
allocation being
reduced 30% by
government policy
without subsidy
Scenario 3: Level of
rainfall remains as
per the average of the
last 10 years
a Increase production &
investment in rice
farm
9
1
2
b Remain rice
production at current
level
2
3
1
c Diversify operations
to include dryland
farming
1
1 (cattle)
2
d Sell water & exit
irrigation industry
0
4
6
Other
2 X b then a
1 x b then d
1 x c then d
Under Scenario 1 involving a return to long-term average rainfall levels, 9 of the 13 rice farmers surveyed
indicated that they would increase their on-farm production and investment. This decreased significantly
under Scenario 2 whereby water allocations were reduced by 30 per cent, only one of the rice farmers
surveyed indicated that they would increase their on-farm rice production. For Scenario 2 one respondent
noted that that the level of debt would need to be taken into account. This is variable across enterprises and
the decision may ultimately be made by the bank.
Under Scenario 3 involving rainfall remaining as per the average of the last 10 years, 6 rice farmers stated
they would sell water and exit the irrigation industry. This highlights the importance of water security and its
influence on rice industry viability.
3.8 Challenges
Although the majority of survey respondents were optimistic regarding the long-term viability of the Central
Murray rice industry, many highlighted both current and future challenges, including:
18

Water security

Rising input costs and volatile commodity prices

Community impacts and sustainability

Locusts
These challenges are outlined in further detail below.
Water Security
The uncertainty around future water security in response to drought and government policy, aiming to reallocate water away from irrigation to environmental flows was highlighted by all survey respondents as the
most important issue facing the rice industry. Although, the Central Murray rice industry has made significant
advances in promoting on-farm water use efficiency the uncertainty around government policy and its impact
on access to water under general security allocation regimes is a major issue impacting on rice growers.
A number of rice growers surveyed also highlighted that fixed costs associated with access to water were a
major concern, particularly given the low proportion of general security allocation received in recent years.
Growers also felt that the timing of State Government allocation announcements was a major problem, with
late announcements impacting on rice production planning.
Rising input costs and volatile commodity prices
A number of growers surveyed highlighted issues around the volatility of commodity prices on world markets
and the strength of the Australian dollar as potential threats to production profitability.
Rising input costs (e.g. water and fertiliser) were also highlighted as a major challenge faced by rice growers,
although this cost/price squeeze is common for most primary commodities. The main strategy for addressing
this problem in the Central Murray rice industry is targeting niche markets, on and off-farm diversification as
well as increasing the size of farms and enterprises.
Community impacts
The recent drought has already impacted profoundly on the Central Murray community. The decline in rice
production to the extent of it representing a small proportion of that sustained decades ago has had
significant flow on effects for the community, as evidenced by the closure of the Deniliquin rice mill. There is
concern about the ongoing sustainability of regional towns, particularly given further reductions in water
availability predicted by the introduction of sustainable diversion limits under the Basin Plan. There is fear
amongst many rice growers that this will trigger an irreversible decline in the economic and social viability of
Central Murray communities.
Locusts
A number of growers survey were concerned about the threat posed by locusts to the 2010-11 rice crop.
According to the Australian Plague Locust Commission It's very likely that adult swarms will move south and
continue to lay eggs now—Australia's autumn—in agricultural areas. This heightens the risk of damage to
early cereal and fodder crops and, subsequently, of large nymph infestations during the spring
3.9 Industry viability
A viable rice industry is highly dependent upon sufficient access to and timely delivery of water. Most of the
growers interviewed were optimistic regarding the viability of the industry in the region due to the return on
rice, good quality product and effective industry management. “The industry is very viable due to good
leadership that explores all avenues”. A few noted that the industry will only be viable providing there is
access to water.
Some concerns were raised regarding the long-term viability of Murray Irrigation Limited, should significant
volumes of water be purchased under buy-back arrangements of traded out of the region. One grower
commented:
“Are the delivery companies going to be viable?”
5 19
3.9.1
Water security and rice industry viability
Critical water allocations for maintaining viability
Water is the key factor underpinning rice industry viability. This is reinforced by Frontier Economics (2010)
where it is noted that the ‖future of the rice industry in the Riverina is very much linked to water availability”.
The recently released Guide to the proposed Basin Plan calls for cuts in surface water diversions of 26-35%
in the NSW Murray River catchment. According to the MDBA (2010) reduced diversion limits, even at the
lower end, are likely to marginalise the viability of many rice farms as farms choose to trade water to higher
value uses (e.g. nuts and fruit). This trend is highlighted below in figure 9. The figure shows that the
contribution of rice to gross irrigated agricultural production in the MDB decreases significantly under a
proposed long-term SDL of 7500 GL.
Figure 9: Reduction in baseline gross value of irrigated agricultural production due to reduction in surface water
diversions, by sector (MDBA, 2010)
Rice growers surveyed outlined that cuts to water allocations would have significant impacts on the viability
of their industry. This finding is also supported by a number of recent socio-economic impact evaluations in
MDB irrigation districts. A survey of rice growers in the Central Murray undertaken by MJA et al. (2010)
identified the following responses with regard to reduced water availability scenarios as shown in Figure 10:
20

Under a 20% reduction in water availability relative to the long-term average, a quarter of rice farmers
would exit and a further quarter would change their activity while 50% of growers would make no
change to activities.

Under a 50% reduction scenario in water availability from the long-term average, more than 50%
would seek to exit. Rice farmers remaining on farm would exit rice production and move to less water
demanding cereal crops.
Figure 10: Central Murray rice industry grower responses to reduced water availability (Marsden Jacobs and Associates et
al., 2010)
Impacts arising from reduced water availability on rice growers at the farm scale will also trigger large flow on
effects for regional townships. For example, many of the issues seen during the drought such as closure of
rice mills, storage and production facilities will trigger further impacts on regional townships if water
allocations are substantially reduced i.e. water trading may impact regional economies of scale.
Timing of water allocations
Rice growers require early notification of water allocation announcements (ideally September) to enable
them to plan investment prior to the rice growing season. In recent years the impact of drought has resulted
in water allocation announcements being announced late in the growing season. A perverse outcome of this
situation is that rice growers have sold limited early season allocations due to high water prices resulting in
no crop production.
3.9.2
Improving viability
Suggestions by rice growers to improve viability included:

R&D: continued improvements to water use efficiency and higher yielding varieties

improve water supply reliability and security. “I would be prepared to offset loss of some general
security for greater reliability of supply”

earlier announcements of water allocations to allow for more effective decision making

changing paddock/farm sizes. ―Increasing paddock size...from 40 ha on each farm to 100 ha on fewer
farms” and conversely, “Small to medium size businesses are better than large businesses”

Government subsidies.

Consolidation is likely to continue i.e. for many rice growers, irrigation is only a proportion of total
agricultural land and there is some capacity for substitution between irrigation and broadacre dryland
production on an annual basis

Modernisation of the MIL network. The Colleambally Irrigation Area has installed a total channel
control system which has achieved water use efficiency gains of approximately 10 per cent.
5 21
4 Conclusion
The conclusions from this case study of the Central Murray rice industry are:
22

The Central Murray is one of Australia‘s three major rice growing regions, accounting for half of
Australia‘s rice production in 2006.

Reduced water availability was identified by almost all rice producers surveyed as the most important
driver of change in the Central Murray rice industry over the past 10 years. Many of the growers
surveyed had not planted rice since 2005/06 due to low water availability.

Total water usage for rice production for the year 2005/06 was approximately 628,000 ML, accounting
for over half of Australia‘s water use for rice production.

Rice growers in the Central Murray have introduced a number of adaptation strategies to respond to
reduced water availability, including water trading, on-farm water use efficiency and diversification.

The MDBA Basin Plan suggesting long term diversion limits of 26-45% for the NSW Murray was
identified by rice farmers as the most significant issue impacting industry viability. Reduced diversion
limits, even at the lower end, are likely to marginalise the viability of many rice farms as farmers
choose to trade water to higher value uses such as horticulture.
4.1 References
Access Economics (2010). Strengthening Central Murray Irrigation Communities Stage 1 Case Studies:
Socio-economic profile of the Central Murray Region. 8 October 2010
ABARE (2010). Issues Insights 10.4: Adapting to ongoing drought: irrigation in the Murray-Darling Basin.
Dale Ashton, March 2010.
ABS (2010). Agricultural Commodities in Australia 2008-09. 7121.0
Dunn B, Gaydon D and Dunn C (2010). Saving water, lifting efficiency. Industry & Investment NSW, Yanco
Agricultural Institute and CSIRO Sustainable Ecosystems, Queensland. IREC Farmers Newsletter, Spring
2010.
Frontier Economics (2010). Structural adjustment pressures in the irrigated agriculture sector in the MurrayDarling Basin. A report prepared for the Murray-Darling Basin Authority, March 2010.
Koolos H and North S (2007). The new “V-Bay” flexible layout. Published in 2007 Grains Research Update
for irrigation croppers.
Marsden Jacob Associates, RMCG, EBC Consultants, DBM Consultants, ANU, McCleod G and Cummins T
(2010). Synthesis report. Economic and social profiles and impact assessments in the Murray-Darling Basin.
A report to the Murray-Darling Basin Authority, July 2010.
Murray Darling Basin Authority (2010). Guide to the proposed Basin Plan: overview. MDBA Publication No.
60/10. Murray-Darling Basin Authority, Canberra.
Murray Irrigation Limited (2007). Rice Growing Policy, February 2007.
Murray Irrigation Limited (2006). Sustainable rice growing for Murray Irrigation shareholders: Electromagnetic
and sodicity testing
National Water Commission (2009). Australian Water Reform: Second biennial assessment of progress in
implementation of the National Water Initiative, NWC, Canberra.
National Water Commission (2010). The impacts of water trading in the Southern Murray-Darling Basin: an
economic, social and environmental assessment, June 2010.
Ricegrowers‘ Association of Australia. Overview of the Australian Rice Industry: Factsheet.
SunRice
(2005).
Detailed
timeline
of
the
Australian
Rice
Industry.
Available
at
http://www.sunrice.com.au/uploads//documents/education/Detailed_History_of_the_Australian_Rice_Industry
.pdf
SunRice (2010). Overview of the Australian Rice Industry. Available at
http://www.aboutrice.com/downloads/overview.pdf
SunRice (2010a). A solid year of innovation - Annual Report 2010
Sydney Morning Herald (2010). Aussie rice output may triple after rains. September 2010.
The Australian (2010). Perfect weather yields a rice bowl record. July 12 2010.
The Australian (2010), SunRice to reopen Deniliquin rice mill to process bigger rice crop, 3 November 2010.
5 23
Appendix D
Dairy Industry Case Study
Page 40
DAIRY INDUSTRY CASE STUDY
11/10/2010
Contents
1
Introduction ........................................................................................... 4
1.1
Approach for this case study ................................................................ 4
2
The Australian dairy industry ................................................................ 5
3
The Central Murray dairy industry ........................................................ 8
3.1
History of the dairy industry in the Lower Murray-Darling Basin ........... 8
3.2
Industry snapshot ................................................................................. 8
3.3
Water use ............................................................................................18
3.4
Adaptations and innovations ...............................................................23
3.5
Challenges ..........................................................................................25
3.6
Key drivers and outlook .......................................................................27
3.7
Assisting the dairy industry..................................................................28
4
Conclusion .......................................................................................... 30
5
References ......................................................................................... 31
1 Introduction
The Central Murray Strengthening Basin Communities project will assist the Riverina and Murray
Regional Organisation of Councils (RAMROCs) Cluster Group plan for a future where less water
sustains food production, key industries, communities and the environment. The dairy industry
continues to be a significant contributor to the Central Murray economy, despite low water allocations
over the last decade.
This case study provides an overview of the dairy industry in Central Murray and the factors that have
influenced production, production methods and profitability.. It also discusses the major challenges
faced by dairy farmers in the region, as well as the adaptations they have undertaken to manage the
circumstances of the last ten years.
1.1
Approach for this case study
This case study is based on a desktop review of literature and an analysis of data relating to the dairy
industry in Australia and the Central Murray. Information contained within the case study was collected
from a variety of sources that included:

Australian Bureau of Statistics reports,

Access Economics statistics,

Industry publications from Dairy Australia,

Other privately produced reports on the dairy industry.
Primary research was also conducted with 10 dairy producers surveyed from across the region. Face
to face interviews were conducted with these dairy producers using a custom Dairy Survey designed
by Hyder Consulting. A list of dairy farmers suggested for interview was provided by the six Central
Murray Industry representatives from Dairy Australia were also consulted by Hyder Consulting
Councils. The case study provides an insight into the dairy industry from a producer’s perspective.
.
4
2 The Australian dairy industry
Dairy is Australia’s third largest rural industry with a farm gate value of $4.0 billion in 2008/9 (Dairy
Australia, 2010). It is also a significant regional employer, both on-farm and through processing,
manufacturing and the distribution of finished product. It is estimated that 40,000 people are directly
employed on dairy farms and manufacturing plants across Australia and many more are employed in
association with the industry (Dairy Australia 2010).
Australia has a national herd of 1.6 million cows. Milk production almost doubled in between 1985 –
2002, but has contracted to an annual production of 9.2 billion litres (figure 2-1). The total number of
dairy farms has halved over the past two decades, with a shift to larger, more efficient operating
systems (Beale et al, 2009).
The trend in farm numbers has meant that the average herd size has increased from 85 cows in 1980
to 200 cows in 2008/9. Figure 2-1 illustrates the change in the number of dairy farms in Australia since
1994/5. The majority of dairy farms in Australia are owner-operated. Corporate farms make up just 2%
of the total and share farms 18% (Dairy Australia, 2010).
Figure 2-1
Change in dairy farm and cow numbers in Australia, 1994 to 2008 (Beale et al, 2009)
The dairy industry also contributes to rural economies through value-added processing. A large
proportion of this processing occurs close to farming areas and generates additional economic activity
and employment in country regions. Australian dairy manufacturers produce a range of products that
include bulk commodities such as powdered milk and retail products such as liquid milk, cheeses,
yoghurts, custards and dairy spreads.
5
According to Beale et al (2009) in 2008 over 75% of all milk produced was used for dairy
manufacturing, an industry valued at $11.5 billion. Dairying is spread across Australia with all States
supporting a dairy industry to supply fresh drinking milk to nearby cities and towns. However, the bulk
of Australia’s milk production occurs in the south-east, with Tasmania, Victoria and NSW producing
80% of the total volume of milk (Dairy Australia, 2010).
The majority of Australia’s dairy farms are also located in coastal areas where pasture growth is
generally supported by rainfall sometimes supplemented by irrigation. However, over recent decades
the proportion of dairy farms utilising inland irrigation systems in lower NSW and northern Victoria has
increased. Feedlot-based dairying has also increased in recent seasons with farmers adapting to dryer
conditions in many regions. Australia’s dairy regions, as defined by Dairy Australia, are illustrated in
Figure 2-2.
Figure 2-2
Australian dairy industry regions (Dairy Australia, 2010)
Improvements in herd genetics, pasture management practices and supplementary feeding regimes
have increased the average yield per cow from 2850 to 5750 litres a year over the last three decades.
Average annual milk production per farm has also increased from 247,000 to 1,185,000 litres over the
same period (Beale et al, 2009).
However, despite the increase in yields and milk production per farm ABARE estimate that the
national average farm business profit last year was a loss of $6,000 (Dairy Australia, 2010).
6
DAIRY INDUSTRY AT A GLANCE 2008/9
National dairy herd
1.6 million cows
Average herd size
200 cows
Average annual milk production / per cow
5,750 litres
Farmgate value
$4.0 billion
Milk Utilisation
Cheese
33%
Drinking milk
24%
SMP/butter
25%
WMP
12%
Other
6%
Dairy industry workforce
Figure 2-3
40,000
Australian dairy industry at a glance 2008/9 (Dairy Australia, 2010)
7
3 The Central Murray dairy industry
The Central Murray dairy industry includes the Shires of Berrigan, Deniliquin, Conargo, Jerilderie,
Wakool and the Murray.
3.1

In 2005/6 the Central Murray dairy industry had a local production value of $87 million (Access
Economics, 2010),

The Central Murray dairy industry accounts for 2.63% of Australia’s total dairy production
(Access Economics, 2010),

412 people are employed in ‘dairy cattle farming’ within the Central Murray region. This is 1.9%
of Australia’s total ‘dairy cattle farming’ workforce (Access Economics, 2010),

There are 72,486 dairy cattle (including bulls, cows, heifers and calves), with 47,472 dairy cows
in the Central Murray region. This is 2.6% of Australia’s total herd (Access Economics, 2010),

There have been reduced water allocations in the inland irrigated regions of the Lower MurrayDarling Basin over the last decade. Figure 3.9 illustrates the changes to water allocations in the
region over that period.

An international market downturn and its impact on milk prices has forced many dairy farmers in
the region to reassess their situation and make a difficult decision on whether to continue
farming, relocate or exit the industry.

According to Dairy Australia (2010) low rainfall and water allocations in 2008/9 have increased
the dependence on bought-in supplementary feed which has placed many producers into
negative cash flow situations. Dairy Australia state that cash flow pressures have forced some
producers to make significant changes to their operations, including reducing the use of boughtin feed, destocking and some producers have even exited the industry (Dairy Australia, 2010).
History of the dairy industry in the Lower Murray-Darling
Basin
Central Murray is located within the Lower Murray-Darling Basin. Three waves of dairy farmers came
to Central Murray between 1970 and 2000 due to cheap land, low cost means of producing feed and
low risk (Beale et al, 2009). The first boom occurred in the early 1980’s The region was considered
low risk as the supply of water for irrigation during the period was relatively stable and attracted
farmers from coastal regions where land had become expensive.
Later in the 1980’s the second wave of migration began with many New Zealand dairy farmers moving
to the region due to similar price differentials in land values between New Zealand and the Lower
Murray Darling Basin. Finally, in the mid 1990’s a further wave of New Zealand farmers migrated to
the region.
3.2
Industry snapshot
3.2.1
Employment
There are 419 people working in the dairy farming industry in Central Murray (Access Economics,
2010). The Northern Victoria and Riverina (shown in figure 2-2) dairy regions employ 8,415 people in
both farming and processing (Access Economics, 2010). Refer to figure 2-4 for a breakdown of
employment by individual Shire / Council in the Central Murray.
8
Employment type
Berrigan
Shire
Dairy Cattle Farming
Dairy Produce
Wholesaling
Total Dairy Farming
Figure 3-4
Conargo Deniliquin Jerilderie Murray
Shire
Council
Shire
Shire
Wakool
Shire
Total
Central
Murray
220
39
57
0
23
73
412
7
0
0
0
0
0
7
227
39
57
0
23
73
419
Employment in dairy farming in the Central Murray, 2005/6 (Access Economics, 2010)
Four out of the ten surveyed diary farmers in the Central Murray had increased the number of workers
employed on their dairy farm over the last 10 years. Two dairy farmers had reduced the number of
employees and four had not changed the number of workers employed on their dairy farm over the
last 10 years.
One dairy farmer also commented that it was ‘difficult to find staff willing to work the required hours’.
3.2.2
Dairy Herd
There were 72,487 in the Central Murray in 2005/6 (Access Economics). A breakdown in the number
of dairy cattle in 2005/6 at a Shire / Council level is shown in figure 2-5. The average size of a dairy
farm in the region is 388 hectares, supporting 379 cows. On average each farm has 187 hectares setup for irrigation and 50 hectares for non-irrigated crops. However, in 2008/9 only 38% of land
established for irrigation was irrigated (Dairy Australia, 2010).
Type of cattle
Berrigan Conargo Deniliquin Jerilderie Murray
Shire
Shire
Council
Shire
Shire
Wakool
Shire
Total
Central
Murray
Dairy cattle – cows (milk
and dry)
19806
14840
1011
677
3345
7792
47471
Dairy cattle – bulls, heifers
and calves
10395
8297
22
579
2200
3525
25016
Total dairy cattle
30201
23137
1033
1256
5545
11315
72487
Figure 3-5
Dairy herd size in the Central Murray, 2005/6 (Access Economics 2010).
Four of the surveyed dairy farmers had increased the number of cows they were milking compared to
10 years ago. Three farmers had reduced the number of cows they were milking and the remaining
three farmers were milking the same number of cows compared to 10 years ago.
3.2.3
Income and profitability
The financial performance of dairy farms can be measured by farm cash income and farm business
profit. Farm cash income shows the difference between total cash receipts and total cash costs. Farm
business profit is defined as farm cash income plus build up in trading stocks, less depreciation and
the value of farm labour.
9
Farm cash income and business profit have historically been volatile and in 2008/9 the Lower MurrayDarling Basin dairy industry did not perform as well as in 2007/8. ABARE estimate that whilst the
average farm cash income was $31,900, the average farm incurred a business loss of $43,900 during
the period (Beale et al, 2009). This is illustrated in figure 3-6.
Figure 3-6
Farm cash income and business profit in the Lower Murray-Darling Basin, 1998 to 2008
(Beale et al, 2009)
The relationship between the break-even milk price and the received milk price can be used as
an indicator of profitability of dairy operations. The ‘break-even’ milk price is a hypothetical milk
price required for dairy farms to break even. Figure 3-7 illustrates the break-even price of milk in
the Lower Murray Darling Basin over the last six years. It shows that in 2008/9 there was a
significant gap between the received price for milk and the’ break even’ price for milk. This
contributed to an average farm business profit of -$43, 900 during the period as shown in figure
3-6 (Beale et al, 2009).
10
3-7
Received milk price and break-even milk price in the Lower Murray-Darling Basin, 2003-4 to 2008-9
(Allen Consulting Group, 2009a)
The rate of return is another common measure of financial performance. It is measured as the ratio of
money gained or lost, compared to the amount of money invested. Dairy farms in the Lower MurrayDarling Basin had on average a 6% annual rate of return on assets from 1999/0 to 2007/8 (ABARE).
This is low compared to the dairying regions of Western Australia and Western Victoria, but higher
than Queensland and North Coast NSW. ABARE (2010) state that the rate of return for dairy farms in
the Northern Victorian and Riverina region was -3.9% in 2009/10. This was significantly lower than the
other regions in Australia. Low water allocations and the need to purchase supplementary fodder by
farmers in this region contributed to the lower rate of return. This is shown in figure 3-8.
Figure 3-8
Average rate of return for dairy regions across Australia, 1999/2000 to 2007/8 (ABARE
Farm Survey Data)
Dairy Region
3.2.4
Average Rate of
Return – 1999/2000 to
2007/8 (%)
Northern Victoria and Riverina
(includes Central Murray)
6.0
Western Victoria
10.3
Gippsland
8.4
Southern and Central NSW
6.5
Tasmania
8.9
South Australia
7.4
Queensland and North Coast NSW
4.7
Western Australia
9.2
Equity
In a report on the Lower Murray Darling Basin dairy industry Beale et al (2009) state that there have
been significant economic pressures on dairy farming operations in recent years, with strongly
increasing debt levels. According ABARE (2009) dairy farmers have increased debt for a range of
reasons including to fund farm expansion, to invest in productivity improvements and/or to maintain
herds while operating at a loss.
The dairy survey identified that low water allocations and the high cost of fodder has particularly
impacted the profitability of dairy operations in the Central Murray. Average fodder costs per dairy farm
in 2008/9 were $221,480 (ABARE 2010). The change in the debt and equity position of dairy farms in
the Lower Murray Darling Basin is shown in figure 3-9.
11
3-9
Average financial position of dairy farms in the Lower Murray Darling Basin (ABARE, 2010)
2006/7
2008/9
Total capital value
$2,526,510
$2,508,683
Farm debt at June 30
$406, 370
$548,071
Equity ratio at June 30
80%
77%
Dairy farm debt in the Lower Murray Darling Basin is estimated at $548,071 per farm. This is
compared to an average per farm capital value of $2,508,683 and a corresponding equity ratio of 77%
at 30 June 2009 (Beale et al, 2009). The equity ratio of Lower Murray Darling Basin in 2006/7 was
80% with $2,526,510 per farm capital value and debt of $406,370. This highlights how from 2006/7 to
2009/10 the average per capital value of farms in the region has decreased and the debt levels have
increased. This has had the impact of decreasing the debt to equity ratio by 3% during the period.
Section 3.2.10 outlined the reliance of many dairy farmers in the Central Murray on Exceptional
Circumstances payments to control their financial situation during the period of the drought. Some
dairy farmers were eligible for the full $500,000 available through the scheme. However, even despite
these payments the average per farm debt in the Lower Murray Darling Basin has increased by
$141,701 from 2006/7 to 2008/9. The dairy survey reinforced the existence of this trend with a number
of farmers identifying debt as a key challenge facing their business today.
Compared to the Australia’s total dairy industry the Lower Murray Darling Basin has a lower debt to
equity ratio. In 2008/9 the average Australian dairy farm had a capital value of $3,714,700, debt of
$663,200 and an equity ratio of 82% (ABARE 2010).
A breakdown of the financial performance of the dairy industry in the Lower Murray Darling Basin is
outlined in the figure 3-10. It includes information on cash receipts, cash costs and farm cash income
as well as debt and capital.
Financial Performance:
2008/9
Cash receipts:
Total milk receipts
431 370
Dairy cattle sales
45 480
Beef cattle sales
1 990
Total cash receipts
514 820
Cash costs:
12
Dairy cattle purchases
12 250
Hired labour
17 190
Fertiliser
13 080
Fodder
221 480
Fuel, oil and lubricants
17 130
Electricity
10 480
Repairs and maintenance
32 260
Interest payments
40 920
Rent
5 190
Total cash costs
495 760
Farm cash income:
19 060
Plus build-up of trading stocks
-13 180
Less depreciation
28 750
Less owner manager and family labour
53 610
Farm business profit
-76 470
Rate of return:
Total
capitalcapital
value appreciation
- excluding
2
481 460
-1.2%
Farm
debt capital
at Juneappreciation
30
579
120
- including
-3.2%
Equity ration at June 30
77%
3-10 Average financial performance of dairy farms in the Lower Murray Darling Basin, 2008/9
(ABARE 2010)
According to NWC (2010) many dairy farmers in the southern Murray Darling Basin have sold
water entitlements to manage drought-induced debt and other pressures for change. However,
only two out of the 10 respondents to the dairy survey stated that they had sold water
entitlements in the last five years. All other respondents had not sold water allocations or
entitlements over the last five years.
3.2.5
Fodder
Dairy farms in the Lower Murray Darling Basin relied upon a grazed pasture system. Under this
system home-grown pasture and crops were often conserved as silage and hay for later use.
However, ongoing dry conditions of the last decade have brought about a shift in production systems
at many dairies. Feeding systems now range from traditional pasture based systems to full feedlot
dairies.
Fodder purchased includes cereal hay, silage and straw. Fodder prices have a significant impact on
the profitability of dairy farms that are reliant on purchasing supplementary feed. Feed costs as a
proportion of total production costs in the Lower Murray Darling Basin have increased in the last five
years as illustrated in Figure 3-11. In 2008/9 feed costs were 74% of total production costs, an
increase from 64% in 2003/4 (Beale et al, 2009).
Figure 3-11 Feed costs as a proportion of total production costs (%) (Beale et al, 2009)
It is estimated that cows in the Lower Murray Darling Basin consumed on average 1.9 tonnes of grain
or concentrate per head in 2008/9. This is up from an average of 1.4 tonnes in 2007 (Beale et al,
2009).
This trend was observed in the dairy survey where nine out of the 10 respondents had increased the
volume of fodder purchased over the last five years (figure 3-12). One respondent stated that he ‘used
to grow all my own fodder…but today I am totally reliant on purchasing it in’. Another respondent
13
quantified the change in value of fodder purchased and stated that ‘prior to the drought I was spending
$120,000 a year on fodder, now I spend $600,000!’
Many dairy farmers are switching to more intensive farming systems more reliant on supplementary
feed as their preferred production strategy. This trend is also reflected in the dairy survey.
3-12
Responses from the dairy survey relating to fodder purchasing behaviour, 2000 – 2010.
Trends in fodder purchasing (2000 – 2010)
3.2.6
Number of
responses
Increased the amount of fodder purchased
9
Reduced the amount of fodder purchased
0
Fodder purchased remained stable
1
Production value
In 2005/6 the local value of milk produced in the Central Murray was $87,867,388 (Access
Economics). A breakdown of the local value of milk production at a Shire / Council level is shown in
figure 3-13.
Local value of milk
Berrigan
Conargo
Deniliquin
Jerilderie
Murray
Wakool
Total Central
Shire
Shire
Council
Shire
Shire
Shire
Murray
$36,661,686
$27,468,333
$1,870,699 $1,252,200 $6,190,752 $14,423,716
$87,867,388
production
3-13
3.2.7
Local value of milk production in the Central Murray, 2005/6 (Access Economics, 2010)
Milk price
Farmgate milk prices are influenced by the prices that processers can secure on both domestic and
international markets. Beale et al (2009) state that Murray-Goulburn plays a dominant role in
purchasing milk in the Basin, with its prices tend to reflect the base milk price for the region (Dairy
Australia, 2010). Processors have also tended to pay additional incentives to encourage uniform
production throughout the year.
Farm gate milk prices reached a record high in 2007/8, and despite falling by 15% in 2008/9 remained
above levels of previous seasons (Dairy Australia, 2010). The average milk prices over time are
illustrated in Figure 3-15. As at 6 June 2010 Murray-Goulburn announced the latest milk price of 36c
litre for milk and $4.75 for milk solids. (ABC Rural)
Transportation costs also impact on the milk prices between regions and processors. Dairy Australia
(2009) estimate as much as 1.5c per litre per 100 km is required to transport milk.
Respondents to the dairy survey sold milk to a variety of purchasers that included Dairy Farmers,
Fontera, Murray-Goulburn, Parmalat and National Foods (figure 3-14). All but one dairy farmer
responded that they were happy with the price they were receiving for their milk. One dairy farmer
commented that ‘milk prices are very competitive at the moment’.
14
Organisation
No. of respondents who sold milk
to the organisation
Dairy Farmers
2
Fontera
1
Murray-Goulburn
3
Parmalat
3
National Foods
1
3-14 List of organisations that bought milk from the surveyed dairy farmers
Figure 3-15 International and Murray-Goulburn average farm gate milk price, 2002 to 2009 (Beale et al,
2009)
3.2.8
Off farm employment/income
Some dairy farmers have diversified their income sources to adapt to periods of lower profitability. One
such strategy has been to secure off farm employment. One respondent had adopted this strategy to
provide a ‘secure’ form of income during the recent drought. The other nine respondents did not have
off farm income. Limited statistics are available to quantify the intensity of dairy farmers using off farm
employment and income to sustain their businesses.
3.2.9
Succession planning and feelings about future in farming
The dairy survey uncovered mixed feelings about the future of the dairy industry in Central Murray and
plans for succession. Some respondents stated that their high debt levels ensured that they could not
easily exit the industry. Others were more optimistic and were increasing their herd size and milk
production to achieve greater economies of scale within their dairy operation.
Overall, eight out of ten respondents stated that they believed the Central Murray dairy industry to be
viable. The other two respondents stated that without water the Central Murray dairy industry was not
15
viable. However, when provided with a hypothetical scenario that prompted respondents to select an
option of what they would do if the level of rainfall in the region returned to the long-term average, nine
out of the 10 respondents chose to ‘increase production and investment on their farm’. Two out of the
10 respondents were also looking to retire in the next five years and did not have a succession plan in
place for their business.
3.2.10
Government support (EC Payments)
There are a number of government support subsidies available to dairy farmers in the Central Murray.
These include exceptional circumstances assistance – available for declared regions during periods of
drought.
1
Exit Grants:
The Exceptional Circumstances Exit Grant of up to $150,000 assists farmers who have endured
severe drought conditions for several years and are considering their options outside farming.
2
Income Support:
Exceptional Circumstances Relief Payment (ECRP) commonly called 'income support', assists farm
families in EC declared areas that are experiencing difficulties meeting basic living expenses.
3
Interest Rate Subsidies:
Exceptional Circumstance Interest Rate Subsidies (ECIRS) provide business support to farms that are
viable in the long term, but are in financial difficulties due to an EC event. Interest rate subsidies are
provided at 50% of the interest payable on new and existing loans for the first year of an EC
declaration and at 80 per cent in the second and subsequent years, up to a maximum of $100,000 in
any 12-month period and $500,000 over five years.
4
Professional Advice and Planning Grants:
Grants of up to $5500 (GST inclusive) are available for drought affected farm businesses to access
professional business and financial planning advice.
5
Farm Management Deposits:
Farm Management Deposits are a financial risk management tool for farmers to help smooth the
uneven income streams that are common in agriculture due to climate and market variability.
6
Tax Relief:
Special taxation measures and concessions are available for farmers affected by drought.
Other support that may be available for dairy farmers include:
7
Assistance for Isolated Children
8
Rural Financial Counselling
9
Social and Emotional Counselling
10
Employment Services
11
Drought Force
12
Drought Contracts
A high proportion of dairy farmers interviewed received EC support. Six responded that they were
receiving the Interest Rate Subsidy, two declined to comment and the final two respondents were not
receiving any subsidies. There was consensus amongst the dairy farmers receiving the Interest Rate
Subsidy that it was significantly helpful to their financial position. A few comments from the survey
include:
16
‘I would of walked without the scheme (interest rate subsidy)’,
‘The Interest Rate Subsidy has allowed us to carry on’,
‘The Interest Rate Subsidy is the only thing that has got us through’
3.2.11
Production statistics / yields
According to Dairy Australia the number of dairy farms in Australia has decreased over the past three
decades. Milk output has generally increased due to increased cow numbers and improved cow yields
up until the major drought of 2002/3 (Dairy Australia). Since 2002/3 there has been a decline in total
milk production, as illustrated in Figure 2-1.
Recent seasons have seen continuing drought conditions across many dairying regions, including the
Central Murray, further reducing cow numbers. According to Dairy Australia (2010) the underlying
trend has been a continued shift towards fewer farms, larger herds and increased milk production per
farm.
In 2008/9 Australian milk production increased by 165 million litres to a total of 9,338 million litres
(Dairy Australia, 2010). This was an increase of 1.8%. However, Dairy Australia (2009) report that the
irrigated regions of NSW faced very difficult conditions during the period, with yet another season on
low water allocations and milk production suffered accordingly.
The dairy survey showed mixed results for on-farm production volumes and herd numbers. Since 2000
four respondents had increased their herd size, two had maintained a consistent herd size and three
respondents had decreased their herd (figure 3-16). Five out of the ten respondents had also
successfully increased milk production during that period. The farmers that had increased production
had generally done so to achieve increased economies of scale. One commented that ‘I had to grow
my business to survive’.
Variable
No. of respondents
Increased
Decreased
Variable
No. cows milked
4
1
3
1
Milk produced (litres)
5
1
2
1
3-16
3.2.12
Stable
Results from surveyed dairy farmers - changes to the number of
cows milked and milk production on their farms, 2000 - 2010
Processing
There are six large dairy processing companies operating in the Lower Murray Darling Basin. These
are Murray Goulburn, Fonterra Milk, Bega Cheese, National Foods, Parmalat and Tatura Milk
Industries. Combined these processing companies operate 13 dairy product manufacturing facilities
within the lower Murray Darling Basin. Local production of drinking milk has some protection against
competition from distant regions due to the relatively high costs associated with transporting liquid
milk.
17
3.2.13
Economic contributions
The Central Murray dairy industry contributes to the local economy both directly and indirectly. Directly
the industry employs 412 people in the region (section 3.2.1) and generates a total production value of
approximately $87 million each year (section 3.2.6).
Indirectly the industry supports employment and income within a number of related industries that
provide services required by the dairy industry. This includes agricultural suppliers that provide the
fodder requirements of the industry down to the local shops that provide the basic everyday needs of
the dairy farmers and their families.
3.3
Water use
The dairy industry is a large water user in the Central Murray. In 2009/10 the dairy industry within the
Murray Irrigation Area used 26,111 ML of water (Murray Irrigation Limited, 2010). This represented
16% of the total amount of water used for irrigation in the Murray Irrigation Area. Figure 3-17 shows
the water use of the dairy industry in the Murray Irrigation Area over the last five years.
Year
Water usage by dairy
farmers in the Murray
Irrigation Area (ML)
Total water usage in
the Murray Irrigation
Area (ML)
% of water used in the
Murray Irrigation Area
by dairy farmers
2005/6
80545
985001
8%
2006/7
43096
222685
19%
2007/8
7959
29491
27%
2008/9
16434
69279
24%
2009/10
26111
161454
16%
Figure 3-17 Water usage by dairy farmers in the Murray Irrigation Area (Murray Irrigation Limited, 2010)
Recent dry climatic conditions have resulted in historically low water allocations. The water allocations
for the major irrigation catchments in the lower Murray Darling Basin are shown in figure 3-18.
18
Figure 3-18 Average annual water allocation as a % of water entitlement (Beale et al, 2009)
Water is integral to the feed production processes of dairy farms in the Central Murray. However, as
figure 3-18 illustrates water is becoming increasingly scare and there is uncertainty as to whether
there will be sufficient water available for dairy farms to continue with current irrigation practices into
the future. Beale et al 2009 identified that there are three factors that will influence the availability and
price of water in the future. These are:
1
Climate – i.e. annual rainfall / variability / climate change,
2
Policy decisions,
3
Efficiency of on-farm irrigation practices and irrigation infrastructure.
These three factors will influence the amount of water that will be available for irrigation and at what
price it will be available.
3.3.1
Volume of water traded in/out of the region
Water trading is widely undertaken by dairy farmers in the Central Murray. Nine out of 10 respondents
from the dairy survey had participated with water trading (refer to section 3.4.4 for additional
information on water trading).
Data provided by Murray Irrigation Limited shows the volume of temporary water that was bought and
sold by dairy farmers in the Murray Irrigation Area over the last five years. This data was not available
at the Central Murray level. Figure 3-19 shows that except for 2007/8 the dairy industry in the Murray
Irrigation Area has bought more water than they have sold each year. The net volume of water
transfers in by dairy farmers in the Murray Irrigation Area was 12,617 ML in 2009/10. During this
period dairy farmers in the region purchased 18,443ML and sold 58,26ML of temporary water.
Year
Temporary water purchased
by dairy farmers in the
Murray Irrigation Area (ML)
Temporary water sold by
dairy farmers in the Murray
Irrigation Area (ML)
Net change
(ML)
2005/6
37427
11495
25932
2006/7
46246
8165
38081
19
Year
Temporary water purchased
by dairy farmers in the
Murray Irrigation Area (ML)
Temporary water sold by
dairy farmers in the Murray
Irrigation Area (ML)
Net change
(ML)
2007/8
3543
4474
-931
2008/9
13250
3850
9400
2009/10
18443
5826
12617
Figure 3-19 Water transfers made by dairy farmers in the Murray Irrigation Area (Murray Irrigation Limited, 2010)
Note: these transfer figures include internal transfers within Murray Irrigation Limited (including water exchange), plus external
trade that might be to or from a licence held by the same landholder.
According to NWC (2010) water trading has been a central element of many strategies adopted by
dairy irrigators in northern Victoria and the NSW Murray to deal with drought. The NWC (2010) believe
that when water prices were high, allocation sales were used to generate income to purchase
additional fodder. Alternatively, when prices were lower, irrigators bought additional water to maintain
production and capacity. According to the NWC (2010) entitlement sales also increased over the
period of the drought as dairy farmers in the southern Murray Darling Basin sought to manage debt.
A report by the NWC (2010) on the Impacts of Water Trading in the Southern Murray-Darling Basin
states that ‘dairy farmers bought and sold allocations in response to changing input and output prices
and other factors…they (dairy farmers) were net sellers of entitlements in response to adjustment
pressures and the recent milk price decline’.
3.3.2
Viability of the diary industry with different water supplies
Water is an influential factor in the viability of the dairy industry in the Central Murray. When water is
available through allocations dairy farmers are able to produce milk relatively cheaply on irrigated
pasture. When allocations of water are low and the price of temporary water high it is possible to
produce milk through rain fed pastures and supplementary purchased feed instead. Figure 3-19
showed that in 2007/8 when water allocations were low more water was sold than bought by dairy
farmers in the Murray Irrigation Area.
However, the use of supplementary feed can have a significant impact on the profitability of the dairy
industry under this production method. Dairy farmers interviewed during the dairy survey identified that
their increased use of fodder for supplementary feed has reduced profitability and contributed to
increasing debt levels.
Despite this there was a strong sentiment reflected in the dairy survey that the dairy industry in the
Central Murray still remains viable. When questioned about the viability of the dairy industry in the
Central Murray eight out of the 10 dairy farmers interviewed responded that the industry ‘remained
viable’. The respondents identified that the climate and low land costs will continue to make the
Central Murray an attractive location for dairy farming.
Some respondents also noted that the skills set of dairy farming has also changed. They noted the
necessity for dairy farmers to have business management skills to operate a viable dairy farm. One
respondent quoted that it is ‘no place for traditional dairy farmers anymore…the industry is still viable,
but only for those with good business sense’.
20
The recently released Guide to the Proposed Basin Plan calls for cuts in surface water diversions of
26-35% in the NSW Murray River catchment. According to the MDBA (2010) reductions in current
diversion limits could be expected to continue to drive trends in dairy farming systems that
developed during the drought, in particular:

the change in feeding systems from perennial pasture to more flexible and complex feeding
systems with an increased focus on annual crops,

farm numbers may continue to decline as average farm size increases,

on-farm water-use efficiency improvements.
It has also been estimated that the contribution of dairy to gross integrated agricultural production in
the Murray Darling Basin would decrease noticeably under a proposed long-term SDL of 7500 GL.
This is shown in figure 3-20 which illustrates that some irrigated agricultural sectors are likely to
suffer larger declines than others in response to a reduction in watercourse diversions. The most
significantly effected sectors are those with relatively lower-value products such as rice and cotton.
The dairy industry will be moderately affected in comparison to these sectors, but will still occur a
larger reduction that higher-value products such as nuts, fruit, vegetables and grapes.
The MDBA Authority (2010) also believes that a 3,000-4,000 GL/y reduction in current diversion
limits would result in dairy production beyond that of production levels experienced during the recent
drought. This is likely to be achievable through continued innovations and adaptations of the dairy
industry. Industry adaptations are outlined in greater detail in section 3.4.
However, whilst industry adaptations have assisted in drought management, in many circumstances
they have also eroded the profitability of the farms and have increased the debt levels of many dairy
farms in the Murray Darling Basin.
Figure 3-20 Reduction in baseline gross value of irrigated agricultural production due to reduction in
surface-water diversions, by sector (MDBA, 2010)
21
During the dairy survey farmers were asked what they would do under three hypothetical scenarios.
The responses to these scenarios indicate how the Central Murray dairy industry may react under different
water availabilities. The first scenario asked dairy farmers what they would do if the level of rainfall
returned to the long-term average. All respondents except one replied that under this scenario they
would increase milk production. One respondent mentioned that they would diversify operations
instead.
Under the second scenario dairy farmers were asked that they would do if a 30% reduction in water
allocations was imposed within the region. Three farmers replied that they would increase production,
four would remain at current production levels, one would diversify operations and two would sell
water and exit the diary industry.
For the final scenario dairy farmers were asked what they would do if the level of rainfall remained as it
had for the last 10 years i.e. during the drought. Under this scenario only one farmer replied they
would increase production, one would remained at current production levels, two would diversify their
operations and four would sell water and exit the dairy industry. The final two respondents stated they
were unsure what they would do in this situation.
These responses suggest that dairy farmers in the Central Murray are likely to increase production
with increased water availability but some farmers would exit the industry altogether and others will
diversify their operations given reduced water allocations or reduced rainfall.
3.3.3
Consequences of reduced water and when that began to take place
There has been a significant decline in water usage in the Murray Irrigation Area since 2002/3. This is
show in table 3-21.
Year
Water Usage in the Murray
Irrigation Area (ML)
% Allocation
2000/1
1,295,437
78
2001/2
1,239,536
86
2002/3
399,740
8
2003/4
658,608
45
2004/5
651,212
42
2005/6
985,001
56
2006/7
222,689
0
2007/8
29,401
0
2008/9
69,274
9
2009/10
161,454
34
Figure 3-21 Water usage and allocation in the Murray Irrigation Area (Murray Irrigation Limited, 2010)
According to NWC (2010) irrigated dairying can be thought of as a ‘quasi-interruptible production
process’ with opportunities to vary the volume of water used by substituting irrigated pasture for
purchased feed, varying the culling rate of cattle, and altering the balance of annual and permanent
pasture.
22
Dairy farmers have responded to reduced water allocations in a variety of ways. According to the
NWC (2010) one strategy has been to continue purchasing water on the temporary market as a shortterm measure to maintain productive capacity. Figure 3-19 shows that dairy farmers in the Murray
Irrigation Area are buying more water than they are selling water on the temporary market. Whilst this
may assist to keep the dairy farmers in production it also has the drawback of increasing debt. The
increase in debt was discussed in section 3.2.4.
The NWC (2010) also state that another strategy of dairy farmers has been to sell allocations or
entitlements and purchase feed substitutes. This allows farmers to maintain production for the next
season, but it also exposes the farmer to price fluctuations on the grain/feed market (Frontier
Economics et al. 2007). Under this strategy many dairy farms have also shifted from perennial to
annual cropping.
This and other adaptations of the dairy industry in response to reduced water availability are outlined
in greater detail in section 3.4. However, many of the adaptations have also had an impact on the
profitability of the dairy industry in the Central Murray. In particular the industry has become more
dependent on supplementary feed for production which has eroded the profit margin of many dairy
farms. Figure 3-6 shows the variability in farm business profit of dairy farms in the Lower Murray
Darling Basin over the last ten years. In 2002/3, 2003/4, 2006/7 and 2008/9 farm cash income (the
difference between total cash receipts and total cash costs) was less than $50,000.
3.4
Adaptations and innovations
Over the last decade the drought has caused reduced water allocations as per figure 3-18. What’s
more, Beale et al (2009) noted that recently dairy farmers in the Lower Murray Darling Basin have
recently been affected by both low water allocations and historically low milk prices. This ‘doubleedged sword’ has accelerated the consequences from reduced water allocations. According to Dairy
Australia, dairy farmers have undertaken a number of adaptations to manage their operations and
adjust to lower water allocations, a highly volatile milk price and increasing costs of production. The
consequences of reduced water and the adaptations the industry has made to counteract the issue
are outlined below:
3.4.1
Perennial to annual cropping
Many dairy farmers have diversified their feed base and have shifted from irrigated perennial pastures
to annual pastures (Beale et al, 2009). Six out of the 10 surveyed mentioned that they had undertaken
this practice. One respondent commented that ‘90% of dairy farmers are no longer growing summer
pastures’. Another respondent also commented that they had shifted to growing pastures that required
less water.
3.4.2
Increased purchasing of supplementary feed
Many dairy farmers are also purchasing more grain and fodder, as well as increasing capital
investment into feed sheds and feed mixing equipment (Beale et al, 2009). This is in response to a
reduction in the production of home-grown feed. Nine out of the 10 dairy farmers surveyed indicated
that they were purchasing more fodder than compared to 10 years ago (figure 3-12). One respondent
commented that they were ‘totally reliant on purchasing fodder’ for their operation. Another respondent
quantified the increase in fodder costs and stated that they had more than trebled in the last 10 years.
Other dairy farmers have engaged with better strategic utilisation of rainfall for on farm pasture and
crop production. However, comments taken from the survey highlighted that it had been a challenge to
produce sufficient home-grown feed with the lower water allocations.
23
3.4.3
Increased farm operating flexibility
According to Beale et al (2009) there has been an increase in the flexibility in feed base supply options
to reduce reliability on pasture in the Lower Murray Darling Basin dairy industry. Many dairy farmers in
the region have changed their calving patterns to take advantage of higher winter and autumn prices
and have adjusted stocking rates to better match herd size to feed availability. Some of the dairy
farmers interviewed had undertaken similar practices to increase their operating flexibility as those
identified by Beale et al (2009).
3.4.4
Water trading
A number of dairy farmers in the region have also become active in water trading, as shown in figure
3-19. Dairy Australia estimated that 31% of dairy farms participated in temporary water trading in
2006/7 in the Lower Murray Darling Basin. The dairy survey highlighted that nine out of the 10 dairy
farmers surveyed had also traded temporary water during the last five years. Seven of them had
bought temporary water and two had purchased permanent water. None of the respondents had sold
permanent water, but two had sold temporary water (figure 3-22).
There was a mixed feeling amongst the dairy farmers when questioned about their experience with
water trading. Responses ranged from ‘it was one of the better decisions of my life’ to ‘I will never buy
water again as last time I did the Government suspended it’. The general feeling from the dairy survey
was that most of the respondents will continue to engage in water trading.
Sold a water entitlement
Sold a water allocation
Purchased water?
Yes (650ML, general
security)
No
Yes (160ML; temporary)
No
No
Yes (1024ML; permanent)
No
No
Yes (temporary)
No
No
Yes (874ML; temporary)
No
No
Yes (200ML; temporary)
No
No
Yes (temporary)
No
No
Yes (600ML; permanent)
No
No
Yes (annually purchase 150ML;
temporary)
Yes (800ML; permanent)
No
Yes (temporary)
Figure 3-22 Sales and purchases of water allocations and entitlements for dairy farmers surveyed
in the Central Murray
3.4.5
Cow parking
According to Beale et al (2009) some dairy farmers in the Lower Murray Darling Basin have leased
their herd to other farmers in the region experiencing more favourable seasonal conditions. This
24
practice allows dairy farmers to maintain their herds. However, none of the survey dairy farmers
mentioned that they had undertaken this activity.
3.4.6
Improved water use efficiency
The adoption of more sophisticated water management and distribution technologies such as laser
levelling, automated flood irrigation systems, high flow flood irrigation and spray irrigation have been
used by farmers in the area to improve their water use efficiency (Beale et al, 2009). The majority of
the surveyed dairy farmers had undertaken practices on their farm to improve water use efficiency,
with six out of the 10 farmers responding that they were increasing using water more efficiently on
their farm.
3.4.7
Increased herd size
Some of the dairy farmers surveyed have increased their herd sizes to improve the economies of
scale on their property. This practice is also being adopted more broadly across the Lower Murray
Darling Basin (Dairy Australia, 2009). Four out of the 10 dairy farmers surveyed had increased their
herd size since 2000/1. One farmer commented that ‘to stand still was to go backwards’ and this
sentiment was shared by many other farmers who saw that expanding their dairy was the way forward.
3.4.8
Improved cow comfort
The survey also found that some dairy farmers had modified their practices to improve cow comfort,
which in turn is believed to increase milk yields. This included developing shade sheds over areas
such as the total mixed ration (TRM) distribution area.
3.4.9
Other adaptations
According to Beale et al (2009) other adaptations in the Lower Murray Darling Basin include better soil
testing, improved animal genetics, artificial insemination programs, the use of new milking equipment
and techniques and widespread use of computers to record and monitor herd and individual cow
performance. However, none of these other adaptations were listed by respondents to the dairy
survey.
3.4.10
Enhancing adaptations and innovations
The adaptations and innovations of the dairy industry can be enhanced in a number of ways. Section
3.8 examines the ways that the overall industry can best be assisted. Many of these are related to
enhancing adaptations and innovations within the industry. This includes providing greater certainty
over future water allocations.
Uncertainty over future water allocations has made it difficult for the industry to plan for its future.
Many of the respondents to the dairy survey commented that they were hesitant about making
changes to their businesses before they knew what water allocations could be expected. The
respondents stated that they need to know what the allocations will be so they can adjust their
businesses to increase efficiency and maximise profitability. Activities that provide certainty over water
allocations will contribute towards advancing innovation and adjustment within the dairy industry.
3.5
Challenges
Despite the majority of the surveyed dairy farmers having an optimistic outlook on the Central Murray
dairy industry, they also identified a number of challenges. The key challenge identified was water
25
uncertainty with all 10 respondents stating this as a problem. This included climatic variation as well as
water policy and its impacts on the industry.
Other challenges indentified by the dairy farmers are:
servicing high levels of debt,
succession plan / how to exit the industry,
variable milk prices,
increased input costs.
3.5.1
Water uncertainty
Dairy Australia believes that the Lower Murray Darling Basin dairy industry could access sufficient
water for a sizeable dairy industry, especially if on-farm water productivity continues to improve.
However, the dairy survey showed that the uncertainty over future water supplies was a considerable
concern for many dairy operators. The surveyed dairy farmers were particularly concerned about the
uncertainty of government policy regarding water allocations and as a consequence were reluctant to
make investment on their dairy farms.
One respondent quoted that ‘I wish the government would just make up their mind (relating to water
allocations and the Basin Plan) so we can all just get on with it’. This sentiment was shared by a
number of the other surveyed dairy farmers who in reference to the Basin Plan believed that they can
remain viable with reduced water allocations, but only if they know what these reduced allocations will
be. The respondents stated that they need to know what the allocations will be so they can adjust their
businesses to increase efficiency and maximise profitability.
Whilst dairy farmers have adapted to reduced water allocations and lower rainfall over the last 10
years, water availability still impacts on the profitability of many dairy farms. Figure 3-6 illustrates the
volatile profitability of dairy farms in the lower Murray Darling Basin.
However, despite the challenge of water uncertainty Dairy Australia predicts that dairy farming will
remain the major water user in the lower Murray Darling Basin over the next 10 years. According to
Dairy Australia (2010) the critical factors that will impact how much water will be available in the future
for dairying and include:
Climate,
Government policy,
Efficiency of on-farm irrigation practices and irrigation infrastructure,
Expansion of the water grid increasing the connectedness between agricultural irrigation systems
as well as urban water supplies.
3.5.2
Milk prices
Dairy Australia (2010) estimates that in 2010 milk prices will firm but remain volatile. They forecast that
growth in demand for protein from emerging markets will increase as per capita incomes rise and will
put pressure on upward price trends. However, this upward trend is also likely to be offset by a strong
Australian dollar.
26
According to Dairy Australia (2010) dairy farm systems must be flexible and resilient to cope with
greater milk price and input cost volatility. They also recognise that the region’s milk production must
remain competitive at milk prices directly connected to international commodity prices.
3.5.3
Input prices
The dairy survey found that the recent dry conditions in the Central Murray region had caused many of
the farmers to increase the volume of fodder purchased as supplementary feed. This production
system is vulnerable to volatile fodder costs. The dairy survey also showed that some dairy farmers in
the region were also facing increased electricity and water costs. Both these were impacting on their
dairy farm’s profitability.
3.5.4
High levels of debt
The survey found that many dairy farmers were concerned about their level of debt. Many respondents
were forthcoming with acknowledging the crucial role that Exceptional Circumstances support had on
the profitability of their dairy operation. The support that dairy farmers in the region have been
receiving from the EC payments has not been quantified but it is substantial.
3.5.5
Succession plan
The dairy survey showed that some farmers are also concerned about a succession plan for their dairy
farm. Two of the farmers surveyed commented that they planned to retire within the next five years but
did not have a succession plan or exit strategy. Many of the farmers also noted that it was difficult to
attract younger farmers to the region, a sentiment also observed through other surveys conducted by
Hyder Consulting as part of the Strengthening Basin Communities project.
3.6
Key drivers and outlook
According to Dairy Australia (2010) the operating conditions for the Australian dairy industry have
improved in 2010. In 2009 the industry was faced with the global economic downturn cutting milk
prices and a continued period of drought. Dairy Australia believes that the economic recovery of 2010
has underpinned renewed growth in key markets, while reduced supplies have seen dairy commodity
prices rise sharply in US dollar terms. However, a strong Australian dollar may continue to impact on
Australian exporters.
Dairy Australia (2010) forecast that improved milk prices and generally favourable seasonal conditions
will see southern dairy farmers enjoying the best production conditions for several years. Dairy
Australia’s 2010 Situation and Outlook report outlined that the future size and structure of the
Australian dairy industry will be shaped by a number of major primary drivers. These include:
Changing global economics

Competitiveness of agricultural production in developed countries,

Costs of competing products,

Volatility of commodity markets.
27
Climate Variability

Adaptability and sustainability of proven production systems,

Increased competition for irrigation water,

Volatility of feed input supply and costs,

Uncertainty on policy making.
Advancing technologies

Technologies to improve operational risk and farm productivity.
Changing trade and social policies

High priority placed on food security,

Greater concern for environmental impacts,

Varied social empathy for the farm sector,

Potential competition from emerging low-cost exporters.
Consumer and community demands

3.7
Compliance demands on farm and processing enterprises.
Assisting the dairy industry
There are a number of ways the dairy industry in the Central Murray can be assisted. These include:

Create greater certainty,

Research and development,

Training and support,

Funding and grants.
Creating certainty
The key challenge identified by the dairy survey was uncertainty surrounding water allocations in the
Murray Darling Basin. Providing certainty will assist the dairy industry to better adapt to current
conditions. The dairy survey identified that the majority of dairy farmers believed that the Central
Murray dairy industry was viable, but that uncertainty over water allocations has prevented the industry
from undertaking some necessary adaptations.
The dairy farmers were hesitant about making changes to their businesses before they knew what
water allocations could be expected. The respondents stated that they need to know what the
allocations will be so they can adjust their businesses to increase efficiency and maximise profitability.
Assistance that provides certainty over water allocations will contribute towards advancing innovation
and adjustment within the dairy industry.
Research and development
Research and development is another way assistance could be provided to the dairy industry. Dairy
Australia identified that research and development can be carried out in three areas, these are:
28

Farm - feed, animal genetics, resource management, farming systems and business practices.

Manufacturing - pre-competitive research in biosciences, processing, bulk and functional
ingredients, functional foods, cheese starters and fermented products, sustainable production
processes, health and nutrition.

Technical issues - quantitative risk analysis, control measures for contaminants, development
of analytical methods and animal health and welfare.
Training and support
Training for dairy farmers in best practice irrigation methods would also provide the industry with
assistance in adjusting to reduced water allocations.
Funding and grants
The dairy survey also identified that a number of the farmers had also used grants to implement water
saving initiatives and improve on-farm infrastructure. These programs were viewed as a positive by
the respondents and similar programs could be used to assist farmers make further adjustments to
their businesses in a future with less water.
The Exceptional Circumstances payments were also widely relied upon by many of the dairy farmers
interviewed during the survey. Many of the dairy farmers noted the ‘crucial’ financial support the EC
payments provided towards servicing high levels of debt during the drought.
29
4
Conclusion
The Central Murray diary industry continues to be a significant contributor to the local economy, with a
local production value of $87 million in 2005/6. This is 2.63% of Australia’s total dairy production. In
2005/6 the Central Murray dairy industry supported a workforce of 412 people, 1.9% of Australia’s total
dairy workforce.
Over the last decade the industry has undergone significant changes, largely in response to low water
allocations and an extended period of drought. An international market downturn and its impact on
milk prices has also forced many dairy farmers to reassess their situation and make difficult decisions
on whether to continue farming, relocate or exit the industry.
Dairy farmers in the Central Murray have undertaken a number of adaptations and modifications to
adjust to circumstances of the last decade. Some of these include:

Increasing reliance on purchased feed,

Shifting from perennial to annual cropping,

Water trading,

Increasing farm operating flexibility,

Improved water use efficiency,

Increasing herd sizes.
Whilst these adaptations have enabled some dairy farmers to sustain operations during the drought,
they have also eroded the profitability of many dairy farms. ABARE estimate that in 2008/9 whilst the
average farm cash income was $31,900, the average farm incurred a business loss of $43,000.
Of the 10 surveyed dairy farmers six were receiving the exceptional circumstances Interest Rate
Subsidy. These dairy farmers commented that the Interest Rate Subsidy provided significant support
to their financial position. Overall, eight out of the 10 surveyed dairy farmers also believed that the
Central Murray dairy industry is viable. The other two respondents stated that without water the
Central Murray dairy industry was not viable. The surveyed dairy farmers all identified water
uncertainty as a major challenge. Surprisingly many of the respondents commented that water
uncertainty, rather than reduced water allocations, was impacting their business most significantly.
Dairy Australia (2010) forecast that improved milk prices and generally favourable seasonal conditions
will see southern dairy farmers enjoying the best production conditions for several years. However,
this optimistic forecast needs to be tempered by the great uncertainty over water allocations in Central
Murray.
30
5
References
ABS (2010). Agricultural Commodities in Australia 2008-09. 7121.0
ABARE (2010), Australian Dairy – Financial Performance of Australian Dairy Farms, 2007/8 to
2009/10.
ABARE (2009), Australian Dairy – Financial Performance of Australian Dairy Farms, 2006/7 to 2008/9.
Access Economics (2010). Strengthening Central Murray Irrigation Communities Stage 1 Case
Studies: Socio-economic profile of the Central Murray Region. 8 October 2010
Beale, R., Radcliffe, J., Ryan, P., Report on the Lower Murray Darling Basin Inquiry – A dry argument:
a future for dairy in the Murray Basin?, November 2009.
Dairy Australia, Lower Murray-Darling Basin: the Facts, the Future, Preliminary Response to the
Inquiry into Dairying in the Lower Murray-Darling Basin.
Dairy Australia, Dairy 2010 Situation and Outlook, 2010.
Dairy Australia, Dairy 2009 Situation and Outlook, 2009.
Murray Darling Basin Authority (2010). Guide to the proposed Basin Plan: overview. MDBA Publication
No. 60/10. Murray-Darling Basin Authority, Canberra.
Murray Irrigation Limited, data prepared for Hyder Consulting on 10 December 2010.
National Water Commission, The impacts of water trading in the southern Murray Darling Basin: an
economic, social and environmental assessment, 2010.
www.dairyaustralia.com.au – Industry statistics and information taken from the website on 20
September 2010.
31
Appendix E
Community Engagement and Workshop Summary
Report – Stage 1
Page 41
STRENGTHENING CENTRAL MURRAY
IRRIGATION COMMUNITIES
COMMUNITY ENGAGEMENT AND
WORKSHOP SUMMARY REPORT - STAGE 1
CONTENTS
1
Introduction ........................................................................................... 1
2
Method .................................................................................................. 2
3
4
2.1
General interviews ................................................................................ 2
2.2
Public meetings .................................................................................... 4
2.3
Conargo and Deniliquin Shire Workshops ............................................ 5
Results .................................................................................................. 7
3.1
General survey interviews .................................................................... 7
3.2
Conargo and Deniliquin Workshops ................................................... 20
3.3
Public Meetings .................................................................................. 24
Conclusions ........................................................................................ 30
APPENDICES
Appendix A
Questionnaires
Appendix B
Public Meeting Issues and Actions
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page i
1
INTRODUCTION
This report contains the results of the community public meetings, council workshops and indepth interviews under “Stage 1 Where are we at now?” of the Central Murray Strengthening
Basin Communities project. The inclusion of stakeholders and the wider community early in the
planning process is integral to the project. It provides: the opportunity for stakeholders to be
informed of the project

an opportunity to bring their experience to the project

the opportunity to represent the interests of a wider constituency

to understand the opinions and concerns of stakeholders.

the impact of change on communities

provide experience from facing those changes to help plan for the future
The engagement process has also identified:

the value of water to the Central Murray Region

key drivers of change in the Central Murray Region

issues currently impacting on the viability of the Central Murray Region

the causes behind those impacts

the actions people are taking to address issues.
Win
Stakeholder
benefits vs.
council costs
and lost
community
opportunity
Mutual
advantages
Strong “social
license to
operate”
Lose
Council Interests
The reality is that even a “perfect” technical solution cannot be delivered without appropriate
buy-in from the stakeholders who are involved and/or affected. By understanding this and
undertaking the consultation process, Central Murray councils are essentially working toward a
“win/win” outcome in regard to the adaptation planning process (Figure 1).
Mutual
disadvantages
Weak ‘social
license to
operate”
Council
benefits vs.
community
costs
Lose
Win
Community Interests
Figure 1: Win/win outcome matrix
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 1
2
METHOD
The research process involved in the community consultation stage of this project consisted of
four distinct phases, as detailed below.
In depth Interviews
July 2010-August 2010
A key feature of the community engagement plan for Stage 1
involved face-to-face interviews with 41 respondents
representing a diverse range of community and business interest
groups.
th
Public Meetings
23rd – 26 August 2010
Public meetings were undertaken in Jerrilderie, Deniliquin,
Finley, Wakool and Moama. The purpose of these meetings was
to inform community members about the project, identify issues
currently impacting on regional viability (particularly water
security) and identify possible causal factors and management
actions.
Conargo and Deniliquin Shire Council Workshops
th
th
14 and 15 July 2010
Two community information sessions undertaken to build upon
information obtained from community survey, literature review
and field based condition assessment.
Rice, Dairy and Tourism Case Study Interviews
Face-to-face interviews with rice and dairy farmers to
understand the current vulnerability and future viability of these
industries to continuing or worsening water security scenarios.
July 2010 - September
2010
A separate case study for the Central Murray tourism industry
was also undertaken, involving face-to-face interviews with
tourism operators. The aim was to translate the current
experience under drought conditions to those likely to be
experienced under a future with less water.
Note that these case studies have been compiled as separate
reports.
The methodology applied to these phases (with the exception of the rice, dairy and tourism case
studies) is discussed in further detail in the following sections.
2.1
General interviews
A feature of the community engagement plan is the importance given for personal face-to-face
interviews with a wide variety of people in business and community groups in the Central
Murray Region. An initial interview schedule was prepared and approved by the project Steering
Committee. The first five interviews were conducted as a trial and then refined based on the
lessons learnt. The interview questions were also developed so that the information gathered
from respondents could be used to ground-truth statistics and other material used for building
the socio-economic model. A copy of the questionnaire used for the general interviews is
provided in Appendix A.
Page 2
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
A major challenge was to ensure that the respondents are distributed equitably across all six
Cluster Group Councils, as well as being representative of the diverse enterprises and
communities in region.
The questionnaire used for the interviews was qualitative and it was therefore essential that
respondents were selected to include a wide range of people representing the key industries,
business and community interests. The qualitative aspects of the questions allowed
respondents to answer from their perspective. Sometimes their answers covered other
questions in the schedule. In other words, the questions were not mutually exclusive.
Each interview took approximately an hour to complete. A total of 41 separate interviews were
completed. Most involved a single respondent, however some involved up to three people
thereby increasing the actual number of people beyond the 41 interviews.
Participant representation
Number of participants
Most respondents represented more than one interest group. For example, the results of an
interview with a Mayor who is a farmer also included information from a local government as
well as agricultural perspective. Similarly, a person managing a transport company may also
have significant agricultural holdings. Figure 2 shows that all irrigators also had dryland farming
interests. For example, a rice grower is also highly likely to have a very large part of the property
managed for dryland grazing. Consequently, the respondents to the interviews covered a wide
range of interests and provided a broad perspective on the region. To ensure that respondents
included a wide range of community interests the interviews included people such as the
general manager of a major service club, a newspaper editor, a priest, a school principle and a
representative from the indigenous community.
18
16
14
12
10
8
6
4
2
0
Respondent represented one
category
Respondent represented
different categories
Figure 2 Participants represented by more than one category
Council representation
Respondents for the interviews were selected with the assistance of the Steering Committee to
achieve a sample from all six Councils. The object was to gain a broad coverage of interest groups for
the region rather than exactly the same number in each Council. Returning to the area to complete
more interviews in one or two of the Councils to achieve more apparent equity is not an efficient use of
the Project resources at this stage. A clear trend has been established and this is unlikely to change.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 3
Table 1: Showing number of General Interviews as well as the Dairy and Rice industry case studies and the
Tourism component of the Project. Also shown are the number of people who attended the two
workshops. The number in brackets shows multiple respondents at the one interview
COUNCIL
General
Rice
Dairy
Tourism
Berrigan
6
2
5
Conargo
12
4 (5)
2
Deniliquin
6
2
Murray
10
1
1
7
Wakool
4 (5)
2
2
1 (3)
Jerilderie
3
2
Totals
41
13
2
4
1
10
Overall
15
62
Workshops
Conargo 14
Deniliquin 9
2.2
Public meetings
The public meetings had two objectives:
1
To inform community members about the project; the objectives, scope, what is and is not
involved in the process, and why it is required.
2
To provide community members with an opportunity to have their say and to ensure that
issues of importance to them and actions for addressing these are addressed
constructively.
A total of five public meetings were delivered in the Central Murray Region, each having a
duration of approximately three hours. A summary of public meeting locations and estimated
number of attendees is presented in Table 2.
Table 2: Community public meeting location and attendance details
Workshop Location
Venue
Date
Estimated No. of
Attendees
Jerilderie
Council Chambers
August 23
3
Finley
RSL Club
August 24
54
Moulamein
Council Chambers
August 25
60
Moama
Bowling Club
August 25
14
Deniliquin/Conargo
RSL Club
August 26
23
The following method was implemented to ensure that the public meeting objectives were met.
Page 4
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
1
Advertisement of the public meetings: The public meetings were advertised through
local media channels including, radio, television and newspapers; stakeholder phone call;
emails and letters to stakeholders.
2
Workshop facilitation: Hyder consulting team members, Roland Breckwoldt and Brad
Searle facilitated each public meeting.
3
Presentation on project: The project manager, Roland Breckwoldt delivered a
presentation at each public meeting highlighting the projects objectives, scope, what is
and not involved in the project and progress to date.
4
Question and answer session on project: The floor was opened for questions and
comments which were addressed by Hyder team members and council representatives at
each workshop.
5
Community issue and action identification: Meeting attendees were invited to identify
the main issues and causes currently impacting community viability (Figure 3). The focus
was on priority issues within a regional and strategic context. The issues raised were
recorded as worded by meeting attendees. This means that the same or similar issues
raised in one meeting may be worded differently to another public meeting.
Figure 3: Issues and action identification process
6
2.3
Issue consolidation and action identification: Community members were asked if they
were happy with the issues identified. Issues were then grouped on the basis of similar
features. Following, consolidation meeting attendees were then invited to identify actions
for addressing each issue.
Conargo and Deniliquin Shire Workshops
These workshops were undertaken in parallel with general and case study interviews being
th
th
undertaken within these council areas. These workshops were undertaken on the 26 and 27
August 2010 and were facilitated by Roland Breckwoldt and Dr Andrew Stoeckel.
Details for each meeting are outlined below.
Conargo
Number of people: 14 attendees selected by the Mayor as representative of agricultural and
business interests across Conargo Shire.
Purpose: Conargo Mayor, Norm McAllister requested a scenario planning meeting for Conargo
Shire. The purpose was to investigate a range of possible future water availability scenarios and
determine attendee responses to each of these. This was made possible by the team being in
Deniliquin during that week for the community engagement program. The Mayor and General
Manager of Conargo Shire had organised a representative group to come in to the Conargo
Shire offices for individual in-depth interviews the day prior to the scenario planning workshop
and many of these also came to the scenario planning workshop. Consequently, most of the
participants in the workshop were familiar with the project prior to the workshop.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 5
Deniliquin
Number of people: 9 selected by General Manager, Deniliquin Council to represent town
interests.
Purpose of meeting: An opportunity to have a workshop with business and community leaders
in one of the major towns of Central Murray to discuss issues impacting viability and strategies
for addressing these.
Page 6
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
3
RESULTS
3.1
General survey interviews
3.1.1
Major changes
Respondents were asked to nominate the major changes they have observed on a scale with
five being the most significant and one being the least. The number of participants and the rank
they gave it was used to develop a score for each change identified. It is very clear that water
related issues and the drought are the two major changes people have experienced (Table 3).
Table 3: Major changes identified and scored by survey respondents
CHANGE
5
4
3
2
1
SCORE
water related allocation issues - introduction of water
trading, water buybacks
8
9
5
1
2
93
Drought
8
4
2
1
1
65
Implications from Government policies (e.g. native
vegetation act, environmental controls)
2
2
3
3
2
35
Declining social morale - lack of enthusiasm, loss of
confidence, stress in the community
2
2
2
5
3
37
Loss of government services / poor performance of local
government
2
2
2
2
24
Low commodity prices and high cost of inputs / low
agricultural returns
4
5
4
1
1
55
Loss of employment and industry (including closure of
rice mill and abattoir)
1
3
6
3
34
Declining rural population
2
3
2
2
3
35
Increased environmental concerns and management
1
2
2
Agricultural deregulation/restructuring/practices
3
Infrastructure development/increased services
2
1
1
Lack of support for regional areas/more political
landscape
Social changes (e.g. new demographics/work
habits/population distribution)
3.1.2
2
3
4
15
2
21
2
9
2
4
2
2
40
Timeline for changes
Respondents were asked to put a time next to the major changes they have experienced and
the results are shown in Table 4 below. It is clear that the region has been the subject of
massive change. Some of those changes such as the growth of the dairy and rice industries
have been positive. However, these have been offset by other changes that have affected those
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 7
two industries and the wider community. Completing this timeline prompted one respondent to
comment:
“There must have only been a very brief period when it was all stable”
Table 4: Timeline for changes
CHANGE
YEAR
NOTICED
Growth of rice industry
1960s
Low commodity prices and higher
input costs
1960s
Growth of dairy industry
1980s
Growth in Murray Shire, Berrigan
Shire
1985
Victoria permits poker machines
1987
Loss of government services
Mid 90s
uncertain
Continuing or halted? Perhaps
different agencies e.g. Centrelink
etc?
Realised water was no longer
there
1995-97
Yes
May not get it back
Increased regulations –
environmental concerns
1995
Yes
Continuing
Loss of productivity due to
drought
2000
Uncertain
Government interventions in
water increased
2000
yes
Early 1990s no water was allocated
to the environment
Decline in forest industry
2010
Yes
Recent and sudden
3.1.3
TREND?
COMMENT
Extreme decrease since 2006
Yes
Continuing
Uncertain
Yes
Related to growth in nearby towns
in Victoria
A great loss of income to service
and sporting clubs and tourism
business in NSW where poker
machines were permitted while
banned in Victoria.
Impacts on the community
Respondents were asked what impact these changes had made on the community. The
category of impact and the number of times it was mentioned is shown in Figure 4. Some of the
comments made by respondents were”
“60% of all problems are related to the drought’
“The only ones who are happy are the ones who have decided to move away”
“Population decline has got to be the biggest challenge”
Page 8
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Lack of support in government
Comment
Lack of services
Loss of income making the community less
sustainable
Constant erosion of confidence and stability /
increased uncertainty
Population decline
Significantly impacted the community for the
worse
0
2
4
6
8
10
12
14
16
18
Number of Responses
Figure 4: Impacts on the community
3.1.4
The main drivers of change
Respondents were asked to rank four drivers of change in order of importance on a scale of five
being the most important and one the least. The four drivers shown in the interview schedule
were: Climate Change, Water Buybacks, Drought and Low Commodity Prices. There was an
“Other” category that provided respondents the option to nominate other drivers of change and
rank them in the overall scale of five to one. When the interview schedule was being trialled a
number of respondents placed “Increasing government regulations” in the “Other” category. It
was therefore tempting to formalise that in the revised schedule by naming “Increasing
Government Regulation” along with the other four named categories listed above. However, it
was decided not specify an “Increasing government regulations” category so it would not act as
a prompt. It was more interesting to see how many of the 41 overall respondents would
spontaneously nominate increasing government regulations as a driver of change. Included in
this general comment about increasing government regulations were the native vegetation and
threatened species legislation, restrictions on the timber industry and increasing intervention in
water management.
The responses to this question about drivers of change show that there is a very low level of
connection between drought and climate change. The prevailing drought is clearly the major
driver of change and this is consistent with many comments made during discussions with
respondents (see Table 5). On the other hand, climate change is ranked as the least important
driver. It even ranks lower than the number of respondents who nominated “increasing
government regulations’ as a driver of change.
The high score attributed to water buy-backs demonstrates the high level of awareness that
exists for this Commonwealth Government program. However, while it is clearly regarded by
respondents as a driver of change it also has both positive and negative consequences. Some
respondents had sold water to the Government and regarded it as a benefit whereas others saw
water buy-backs as simply another form of government intervention.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 9
Table 5: Showing the ranking respondents gave to major drivers of change
ISSUE IN ORDER
PRESENTED
Priority rankings – highest score is 1 on a 1-5
scale
SCORE
5
4
3
2
1
Drought
19
2
7
2
2
130
Water buybacks
4
14
6
5
2
106
Climate change
2
3
5
6
13
62
Low commodity prices
2
8
9
7
4
87
Other – (Increasing
government regulations unprompted)
5
5
1
9
3
69
Personal impacts from government regulations:
Approximately 58 percent of respondents who listed increased government regulations in the
‘Other’ category stated that they had personally been affected by regulations. Figure 5 below
shows the number of respondents who nominated a category of government regulation that had
affected them.
Consequence
Agricultural deregulation – abolition of single desk
grain marketing
Draft regional Murray strategy
The native vegetation legislation
Have struggled as a result of government regulation
Water buybacks
0
1
2
3
4
5
6
Number of responses
Figure 5: Respondents who nominated a category of government regulation that had affected them
3.1.5
The negative consequences of the changes
The cumulative impact of change and the number of times mentioned is shown in Table 8
below. It is emphasized that this qualitative interview means that these are not mutually
exclusive categories. Each category is based on a content analysis of the responses. This was
regarded as a superior method of obtaining the experience of respondents rather than selecting
some categories and then asking them to rank them in order of importance. That technique was
used where the issues were regarded as straightforward but for this question we wanted to
know how people described the impact of change as well as how many times it was mentioned.
Page 10
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Shut down of industry / timber / rice mill / abattoir
created knock-on effects
Social impacts – despair, social breakdown, substance
abuse, depression
Negative impacts from water buyback policy
Uncertainty – (incl. impending MDBP and SDL
implications)
Consequence
Dealing with negative media on Indigenous issues and
hard to get out a positive message
Farmers working a lot harder and longer hours
Most farmers borrowing money to exist. Survive by
biting into equity
Fewer people participating in rural industries – fewer
rural multipliers, absentee owners
Declining population and services (incl. loss of
intellectual capital)
Effect of the drought on loss of production / industry /
business
Lack of employment opportunities
People disillusioned and walking away from it.
Pessimism. Loss of confidence
0
1
2
3
4
5
6
7
8
9
10
Number of responses
Figure 6: Negative consequences of change identified by survey respondents
3.1.6
The positive consequences of change for the community
People have made changes and some of them have been positive. Figure 7 shows the positive
aspects of change that respondents nominated and the number of times it was mentioned. One
respondent noted the following positive response to change:
‘Our community has pulled together….with good attendance at community events’.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 11
Contributions of income from the water buyback
scheme into the economy
More realism about what development is possible
Drought exceptional circumstances support
The capacity to trade water
Consequences
Reasonable access to larger towns
Financial management has improved.
Development of farmers markets
Lifestyle and tourism opportunities along the River
Realisation that we don’t get any help from the State
Government
It has created resilience
More efficient water use and more dynamic/diverse
businesses (improved environt. mngt practices)
Recognising we are all in this and cooperate more.
Councils cooperating between each other
0
1
2
3
4
5
6
7
8
9
10
Number of responses
Figure 7 Positive aspects of change that respondents nominated and the number of times it was mentioned
3.1.7
Responses people are making to the situation
People are responding to the changes taking place in Central Murray in a variety of ways. Some
are positive, such as becoming more efficient farmers, restructuring and better financial
management. However, the corollary of that is the amount of cost cutting that inevitably impacts
on employment and reducing spending. Leaving the region is also a common response and this
is supported by the population decline facing towns such as Deniliquin.
Page 12
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Selling water to alleviate debt
Leaving the region
Consequence
Better financial management and water resource
use strategies
Restructuring / transiting between industries and
activities (ie diversification)
Becoming more efficient farmers
Increased government assistance (incl centrelink)
Cost cutting (incl putting off staff)
Getting bigger businesses (for economies of scale)
0
1
2
3
4
5
6
7
8
9
10
Number of responses
Figure 8:Responses people are making to change
3.1.8
What is your vision for the region?
The responses provided by people when asked about their vision for the future of the region are
shown in Figure 9 below. These were unprompted responses and they have been categorised
according to the main phrases used in the response. Again, they are not mutually exclusive
categories but they do show the range of views people have for the future. It would require a
strong combination of all the suggestions to achieve a strong community. Comments provided
by survey respondents supporting views on vision for the Central Murray Region include:
‘Unless the drought breaks and we get political support it will be more of the same’.
‘If government acknowledge the need to support structural adjustment, the district’s prosperity
can return’.
‘Vision will depend upon MDBP’.
‘Could be wonderful, however, hamstrung by state and government regulation’.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 13
Farmers markets
Becoming a retirement village
Greater certainty for water security and
government decision-making
Increased government support / certainty
Bleak vision / including limited prosperity for
farmers
Vision
Grow tourism
Airport / freight services
Increase in local services
Reduce age demographic / get young people back
Maintain existence as the ‘food bowl’ including
irrigation activities
Be a favourable community to live and work /
attract population
Create sustainable farming operations / more water
efficient
Be a good base for business / alternative to the
cities / diversification
That people will remain and resilience win-out
0
1
2
3
4
5
6
7
8
9
10
Number of responses
Figure 9: Future vision for the Central Murray region highlighted by survey respondents
3.1.9
What opportunities do you see ahead for the region?
Respondents had mixed views on future opportunities for the Central Murray Region. Many
respondents believed that opportunities would be largely influenced by outcomes from the Basin
Plan (Figure 10). A selection of comments highlighting future opportunities, includes:
‘Opportunities exist for anyone who is a bit smart. Problem is getting the capital to do it’.
‘Don’t see any opportunity in the short-term. Never looked for help but detest interference’.
‘Opportunities dependent on the new Basin Plan SDL’.
‘We have the Kakadu without the crocodiles’.
Page 14
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Affordability of land
Increased empowerment of the region
Aged-care facilities / retirement centre
Increased food production
Opportunities
Increased local services
Airport
Diversification for business and industry (including
through better technology)
Population increase
Tourism
Abattoir / stock selling centre
Alternatives to present farm enterprises and
production systems
More stable Federal and State Government / more
support for regional Aust
0
1
2
3
4
5
6
7
Number of Responses
Figure 10 Opportunities identified by respondents in the Central Murray region
3.1.10 What needs to be done to achieve the opportunities you
identified for the region?
The most common responses identified by survey respondents for ensuring realisation of
opportunities included both influencing government decision making and receiving government
support (10) and greater certainty around water policy (5). A number of other initiatives identified
by survey respondents are highlighted in Figure 11.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 15
Provide small business incentive to kick-start
business
Progressive local councils
Increase private investment
Forum to bring together ideas / community and
sectors
Actions
Improve tourism facilities
Use water more effectively
Retain water in the district
Increase local employment through govt services
Maintain community support and attitudes
Greater certainty of water policy
Influence Govt decision-making / Govt support
0
1
2
3
4
5
6
7
8
9
10
Number of Responses
Figure 11 Actions for achieving opportunities identified by survey respondents
3.1.11 What could your Council do?
Four mayors and the six general managers were interviewed and this will have influenced the
number of times it was mentioned that the Councils are doing their best. Any such selfassessment could, on the one hand, be a biased view but it also may be an informed view
because they are very aware of the constraints that the Local Government Act 1993 places on
Councils undertaking activities outside their responsibilities. A range of actions identified by
respondents are shown in Figure 12.
Page 16
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Make the region a better place to live
Empower local communities
Increase tourism
Actions
Build community moral / improve social attitudes
Increase support for farming
Provide innovation and leadership
Lobby Government and achieve increased support
for region
Encourage industry out of cities / small business
grants / increase employment
They are doing the best they can and cannot do any
more
0
2
4
6
8
10
12
Number of Responses
Figure 12: Actions identified by respondents which Councils could do to help the region
3.1.12 What could the NSW State Government do?
Many survey respondents were concerned that State Government actions are currently
impacting on the viability of the Central Murray Region. For example, a common concern
highlighted was the decision to ban logging in Barmah State Forest and transform it into a
national park. This is highlighted by the top two actions highlighted by survey respondents;
listen to the regional communities (13) and remove uncertainty and stop imposing regulations
(8) (Figure 13). Some comments recorded by survey respondents included:
‘Invest more heavily in developing farming systems that operate better with variable water
availability’
‘Stop screwing us’
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 17
Reduce overheads such as fuel taxes
Change border to include the region in Victoria
Increased funding for the regions
Actions
Increase support for agriculture including research
Invest in infrastructure such as Deniliquin Airport
Supply natural gas to Deniliquin
Promote decentralisation
Remove uncertainty and stop imposing regulations
Listen to the regional communities and support
local councils
0
2
4
6
8
10
12
14
Number of Responses
Figure 13: Actions suggested by respondents which the NSW Government could do to assist the region
3.1.13 What could the Commonwealth Government do?
When asked what the Commonwealth Government could do to support the Central Murray
Region survey respondents most common response was to listen to the regional communities
(12) followed by removing uncertainty and promoting long-term decision making (11). A number
of other actions suggested by respondents are shown in Figure 14. Comments provided by
survey respondents with regard to Commonwealth Government included:
‘Build the national broadband network quickly then provide support packages for business to
relocate to regional areas. Its people we want’.
It is very difficult to work across the whole of government.”It is a struggle for them to work
together for real solutions”
Page 18
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Commonwealth Government Actions
Bring back Landcare programs
Provide funding for tourism
Support agriculture
Encourage industry / business / services to regional
areas
Actions
Abolish water buyback scheme
Increased funding for regions
Remove State Government
Change State boundaries to increase influence of
regional areas
Promote decentralisation
Remove uncertainty and provide long-term
decision-making
Listen to the regional communities and support
local councils
0
2
4
6
8
10
12
Number of Responses
Figure 14: Actions suggested by respondents which the Commonwealth Government could do to assist the
region
3.1.14 Conclusions
Ther conclusions that can be drawn from these interviews are:

one of the major impacts on the region at the time of the interviews was drought

the impact of the drought was exacerbated by the cumulative impact that successive
negative impacts over many years have imposed on the region

many of these impacts are imposed on the region by the changing nature of the wider
community

there is a transfer of regional resources to urban interests and this continues.

the transfer of resources is often achieved by new regulations or restrictions on use

there has been a steady and inexorable decline in direct NSW Government employment
and services in the region

there are extremely low levels of resilience in some towns and the capacity for change is
extremely limited
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 19

people feel neglected by the NSW State Government. They believe that the main reason
for this is because so much of their economic activity is oriented towards Victoria

however, remotely delivered services such as income support through the
Commonwealth Government Exceptional Circumstance Provisions has been a major
benefit during the drought.

the community does not see this change in government services as compensation for the
direct involvement of government in the town. The interviews in Deniliquin inevitably
covered the gradual decline of Government offices in the town. This then reduces the use
of the airport which subsequently gets downgraded which causes further decline and so
the spiral continues.

towns along the River Murray have benefitted from population growth, whereas the rural
towns such away from the River have declining populations

rural adjustment is taking place. People are leaving agriculture and farms are getting
bigger. There is a benefit to those who achieve economies of scale. However, there is a
disadvantage to the towns as there are fewer people

there are high levels of uncertainty about water management and this is likely to continue
until the Basin Plan is finalised.

no new industries or agricultural enterprises emerged during the period of the drought.
There are better and more efficient ways of managing the current range of enterprises,
but no new ones arose

increased tourism was frequently mentioned as an economic activity that could assist the
region
3.2
Conargo and Deniliquin Workshops
3.2.1
Conargo workshop
The workshop commenced with a group discussion on the main drivers of change facing the
region, with a particular emphasis on Conargo Shire.
The workshop identified the following main drivers of change:
Page 20

Water –t he difficulty facing people in dealing with this driver is that it is influenced by two
variables: drought and politics, and they have no control over either

The rice industry - the existence of the rice industry is a driver. It is also a great example
of value-adding. It has taken producers up the value chain. But much of the work needs
to be done overseas. It is a huge task to be competitive.

Social welfare – participants noted that there had been a change from being vibrant
communities to welfare communities. A lot of farmers are on income support.

Locational disadvantage – participants emphasised the disadvantages of being in NSW
but having to deal with many cross-border differences in Victoria. They gave the example
of COAG failing to address interstate barriers to road transport. There are different rules
between NSW and Victoria such as legal dimension of hay loads. Vehicle registration
costs are hugely disadvantageous to small regional transport providers who do not do
many kilometres per annum.

Rapid social change - many social changes (e.g.young people leave for tertiary education
and do not return). Major community assets such as sporting fields are not used so much
and not maintained. Loss of government services.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx

Locational advantage - above Barmah Choke, Mulwala Canal is likely to be used more to
get environmental water past the Choke. We are close to the dams being high in the
Murray catchment.
Scenario planning
It was decided to use these drivers of change as the basis for a scenario planning session.
Participants selected water as the main driver as the basis for the scenario planning. Given that
this driver is influenced by government policy they decided to look at two scenarios. The first
scenario is based on water alone and the second scenario based on various levels of
government support or intervention. The responses highlighted by survey respondents are
shown in Figure 15 and Figure 16 under each scenario.
Figure 15: Water availability/agricultural commodity scenarios and workshop participant responses
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 21
Figure 16: Government support and workshop participant responses
3.2.2
Deniliquin workshop
A workshop was held in Deniliquin to specifically address the issues faced by Council as it
covers the town and does not have a rural rate base. The key findings of the workshop are
outlined below.
Water issues
Water issues identified by participants included:
Page 22

The area is coming out of drought, but is still highly vulnerable because of low livestock
numbers and the high cost of livestock for restocking is prohibitive.

Participants stated that it has been calculated that the River Murray use one megalitre per
kilometre. They see any more than that allocated to the River as being a lost opportunity
to grow rice.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx

They see drought as exacerbating the real underlying problem which Government policy.
The overriding policy emphasis on drought history is distorting policy.

Policies should relate to prevailing conditions. Irrigation policy should work with the
seasons

How water is being distributed is the issue. Need to be able to get it to the right place at
the right time.

There is no long term plan

The Government was paying unrealistic and unsustainable prices for water. Our sense of
confidence was damaged
Adaptations to date
Comments recorded by workshop participants on adaptations to date in Deniliquin Shire
included:

Dairy people are better off because they can plan

The rice industry has greatly improved its products

There will be serious change when the National Broadband Network comes on stream

We need better leadership – there are so many good things about the area

We have a strong community but we need to value people, engage with the uncommitted
such as the unemployed

We could promote the quality of life because of its environment and affordability.
Social policy
Social policy issues identifies by participants included:

Urban people do not understand our issues because 84 percent of the population lives on
one percent of the land.

We need to be using reporters and media sympathetic to our situation. For example, our
tourism operators tell us that 80 percent of people on coach tours are anti irrigation

Rental properties are in high demand but sales are right down because people are too
worried about taking out loans

We have lost too many employers – government agencies and forest industry. Many such
as parole office and State Water have moved to Albury.

The lack of regular transport affects things – the District Court no longer sits because
Barristers can’t get here.

Businesses in Deniliquin are really struggling with 20 percent of the CBD now vacant.
Many others would close but they just open for business because there is no other
option. Many shops are operating at a hobby level
Opportunities
We are a highly productive vibrant agricultural district close the source of water. We should get
so strong that we can’t be ignored
There are opportunities for Indigenous people to get involved in land and water management.
Indigenous Protected Areas can be jointly managed.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 23
Tourism
A number of suggestions were provided by participants on issues and opportunities relating to
tourism:

Need to develop further tourism opportunities – Beach to Beach walk, need to be able to
hire bicycles, attract grey nomads

Most of our tourists are coming from the south. We need them to travel on from Echuca
which is only 45 minutes away

Promote the place amongst young people with an “anything goes” approach

The Lawson Syphon is an engineering feat that is widely known but the public is denied
access is denied by Murray Irrigation Limited. This is possibly because of problems
supervising public entry and insurance issues but these could be overcome.

The Edwards River is a major Deniliquin tourist attraction. They water level in the River
needs to be maintained all year around and water managers need to prevent it declining
in winter.

We need water managers to balance tourism demands with other interests. They need to
help us by not dropping the water level when there are thousands of people water skiing
Deniliquin Council
Businesses rely on strategic alliances with the Council and administration within the Council. It
is necessary that Council staff and administration are skilled in strategic thinking and planning.
When things go into decline it is the time when it is most necessary for Council to provide
leadership and direction.
3.3
Public Meetings
The public meeting series took in five locations and were attended by over a 150 community
1
members . Figure 17 provides a summary of the geographic coverage of the workshop series
and issues identified at each public meeting. Due to the low turnout at Jerilderie no issues are
presented.
1
Note that although a public meeting was called in Jerilderie no community members attended. Therefore, results
for this meeting are not available.
Page 24
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
ISSUES [Moulamein]
ISSUES [Finley]
Development of Basin Plan flawed
Uncertainty about water security our future
Loss of productive use of water from agriculture from this area
Food security
Declining population, loss of services
Less efficiency brought about by less water
Broader impacts on community from loss of water
Depopulation of community maintaining services
Relocation of people from rural areas to cities
Attracting people into the region
Lack of understanding and empathy of rural issues
Volatility in commodities
Social capital of region at risk
Erosion of equity via drought
Declining proportion of agriculture in Australian economy
Lack of water depreciating value of assets
Influencing political decision making outside the region
Community resilience + vitality
Utilise innovative people i.e. Dick Smith
ISSUES [Deniliquin]
ISSUES [Murray Shire]
Community is hindered because of public policy
Urban water demand
Competition for water
Irrigation water security
MDB storage access provisions
Difficulties with succession planning
Decreasing morale in farming community
Amalgamation of family farming units
Lack of information to inform water related market
decisions
Population shifts in farming communities
Government Intervention
Environmentalism in cities impacting rural areas
Water traded out of shire
Food production water used in environment
Political intervention overriding best science outcomes
Economy heavily dependent on water
Strategic land use planning
Changing demographics of local government areas
Lack of government research and development for area
Extracting regional benefit from environmental water apps
Inadequate water efficiency & water delivery systems
Land and water management planning
Management of river system
General Uncertainty creating community paralysis
Lack of strategy & vision for agriculture & food production
Government intervention in water trading markets
Over emphasis on environmental water
Land and water management plans were positive
Managed investment schemes impacted water market
Maintaining area as best food producing area in Australia
Area not appreciated by those outside the region
Figure 17: Summary of issues and actions identified at public meetings
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 25
A detailed list of issues and actions for addressing these identified by community members are
presented in Table 6. Detailed comments on the issues raised for each public meeting are
provided in Appendix B. Uncertainty was a major theme identified across all public meetings,
particularly with regard to water security. Furthermore, many residents were concerned about
the potential impact of the Murray Darling Basin Plan and the impact of proposed cuts to water
allocations directly to irrigators and indirectly on businesses and the general community. Other
common issues sited by community members included:

Lack of understanding and appreciation of rural issues by those outside the region.
Additional to this was the feeling that environmentalism in cities is impacting on the region

Food security

Lack of government research and development for area

River system management including state government allocation announcements i.e.
many participants felt that announcements were made late impacting on planning.
A number of actions were also identified by community members for addressing issues raised in
the public meetings (Table 6). Many participants felt that the current Strengthening Basin
Communities consultancy was an important action in establishing an evidence base to influence
government decision making. Education was also identified as an important action in raising
awareness of regional areas and issues impacting on their viability to city populations.
Examples of other actions suggested at the public meetings included:
Page 26

On-farm efficiencies and broader investment in infrastructure

Business grants

Establishment of the National Broadband Network (NBN)

Decentralise government infrastructure and services not reliant on water

Negotiate offsets in R&D to compensate for water loss.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Table 6: Issues and actions identified at Central Murray public meetings
ISSUE
AREA
Moulamein
BASIN PLAN
• Development of Basin Plan
flawed. Over emphasis on
environmental water. Need
more balance with economic
and social interests
• Loss of productive use of
water from agricultural
areas. Competition for water
between environment, rural
and urban areas.
• Influencing political decision
making outside the region

Finley

ACTION
Deniliquin
Moama


•
•
Lack of understanding and
appreciation of rural issues by
those outside the region
• Establish evidence base to ensure more equitable balance
across environmental, social and economic interests.
• Need to Address Water Act 2007
• Transparent audit of environmental and productive water
use.
• Water saving by restrictions, education and behavioural
change, recycling schemes.
• Alternative & equivalent investment to offset water loss.
• Alternative delivery systems
• Reconfiguring delivery systems. Other Irrigators
downstream.
• Test rigour of SDL assumptions.
• Challenge the process for the Basin Plan development.
• Lack of ownership and engagement and community
consultation in the Basin Plan



Environmentalism in cities
•
•
•
•
•
impacting rural areas
Uncertainty about water security
of our future
•
•
•
General Uncertainty creating
community paralysis



•
•
•
•
•
Community impacts
• Declining population, loss of
services and difficulties in
succession planning.
• Broader impacts on
community from loss of
water
• Decreasing morale in
farming community
• Changing demographics of
local government areas



•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Food security
•
•


•
•
•
•
•
Educate schools and communities.
Opportunities for targeting city media to promote value of
region.
Government to promote value of agriculture and food
production.
Establish iconic attractions to complement forests
Transforming visitor experiences.
Lobby government for long term commitment.
Establish a better balance between environmental, social
and economic interests set out in the Water ct 2007.
Establish robust evidence base through this project.
Need catch up allocations.
On-farm efficiencies and broader investment in
infrastructure.
Certainty around trading policies for CEWH.
Improve reliability of supply.
Set a standard and stick to it (e.g. WSPs).
Reinforce that there is a direct cost in people moving out of
the area into cities.
Highlight the government needs to take a more active role
in communities to offset what is taken (e.g. return of
government departments)
Push for regional airport and air service.
Encourage housing and industry.
Provide additional grants for housing.
Business Grants.
Encourage people to set up in surplus housing.
Water efficiency engineering solutions.
Maintain rural areas as decentralised areas.
Get Broadband into the region ASAP.
Subsidy for agricultural studies.
Succession planning support schemes.
Understand changes and drivers of changes.
Maintain health and education services.
Use drought and its cost as an example of impacts caused
by removal of permanent water.
Remove uncertainty.
Treat issue not symptoms.
Social and rural support networks (maintain and enhance
funding).
Rural counselling services.
Scenario planning + socio-economic modelling
Register of future agricultural ownership in our region and
Australia.
Clear out succinct plan by federal and state government to
understand real value of food.
Encourage people in cities to understand flow on effect of
food choices.
Packaging and labelling of food products from region.
Sell competitive advantage of Australian food.
Restrictions of foreign ownership of Australian farms.
High regional efficiency of water use.
Raise awareness and make media more accountable.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 27
ISSUE
AREA
Moulamein
Finley
ACTION
Deniliquin
Moama
Attracting people into the region


Government Intervention
•
Organise study tours to the region.
•
•
Increase professional diversification.
Decentralise government infrastructure and services not
reliant on water.
Minimise water loss.
Regional community support town businesses.
Funding businesses not reliant on agriculture.
Stress the location & cost-effective benefits of the region.
Promote opportunities of highways.
Increasing representation of community through
involvement in local and state politics (taking the mystery
out of getting involved).
Action required on national plan for food production and
how regions fit into it.
Find way of drawing industry back to region (e.g. natural
gas).
Find way to improve infrastructure to encourage
departmental HQ to return to region.
Address cost shifting from State to Local Government to
improve services (lobbying and awareness raising).
Work more regionally across councils i.e. not in isolation.
Show consideration for timing in entering the water market,
particularly temporary water.
Reinstate land and water management plans and
recognise previous investments.
Recognise custodial nature of farming families.
Land use capability.
Understanding regional productivity.
Identify soil types on carrier systems to improve water use
efficiency.
Push for generation 2 land and water management plans.
Review of current provisions + physical operation of
storages.
Understand and clarify ownership, storage and rules
around use and release.
Ensure general security water allocated in timely manner to
provide greater certainty.
Ensure that long term policy decisions are not based solely
on one recent drought.
Need to look at other options in addition to freshwater.
Undertake investigation into Water Act and consequences
of it.
Understand environmental impact of barrages.
Credible investigation into the management of the Lower
Lakes in relationship to delivery of water.
Viability of council’s reports and socio-economic model.
•
•
•
•
•
•
•
•


•
•
•
•
•
Land and water management
plans were positive

Strategic land use and water

management planning
•
•
•
•
•
RIVER SYSTEM
•
MANAGEMENT
•
•
MDB storage access
provisions
•
•
Management of river system

•

•
•
•
•
Social capital of region at risk

•

•
•
•
Declining proportion of
agriculture in Australian
•
Promote sustainability.
Promote efficiency of gravitational irrigation.
Industry investment group proactive in modelling various
configurations.
Value adding product
•
•
•
Maintain pressure for property.
Anticipate and counter act sudden loss of EC support.
Subsidising to keep us here.
•
•
Taxation reform.
Recognise the impacts on commodity markets.
economy
Volatility in commodities

Erosion of equity via drought

Managed investment schemes
impacted water market
Amalgamation of family farming
units

• Accept change.

Lack of information to inform
• Greater certainty from Commonwealth with regard to price
of water.
• Training courses in key aspects of water trade.
water related market decisions

Water traded out of shire

• This project will assist in quantifying impacts.
Economy heavily dependent on

• Integrate projects so tipping points identified.
Page 28
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
ISSUE
AREA
Moulamein
Finley
Deniliquin
ACTION
Moama
water
Lack of government research
and development for area


• Common themes across other SBC projects.
• Negotiate offsets in R&D to compensate for water loss.
• Identify on farm water use efficiency programs
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 29
4
CONCLUSIONS
A number of common priority issues were identified in the Stage 1 community consultation
process. These can be grouped according to the following areas:
Page 30

The recent drought has accelerated the process of structural adjustment in the Central
Murray Region. People are leaving agriculture and farms are getting bigger. There is a
benefit to those who achieve economies of scale. However, there is a disadvantage to
the towns as there are fewer people.

There are high levels of uncertainty regarding water management and this is likely to
continue until the Basin Plan is finalised. This combined with the impacts of drought has
impacted significantly on community morale.

No new industries or agricultural enterprises have emerged during the drought. Although
it was noted that there are better and more efficient ways of managing the current range
of enterprises.

Increased tourism was frequently mentioned as an economic activity that could assist the
region. However, given the importance of irrigated agriculture to the region regarding its
contribution to Gross Regional Productivity tourism will not be the silver bullet to offset
water losses projected in the Guide to the Basin Plan.

The Guide to the Basin Plan calls for deep cuts in long-term diversions of 28-37 per cent.
If these proposed cuts were implemented this will likely have adverse social and
economic impacts on the Central Murray region communities, particularly given the area
reliance on irrigated agriculture.
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
APPENDIX A
QUESTIONNAIRES
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 31
General Interview Questionnaire
Interview schedule
1 Name:
2 Position:
3 Council area
4 Contact:
5 Profession/representative
•
Farmer Dryland
•
Business
•
Tourism
•
Industry
•
Local government
•
Other
Irrigation
Both
Comment:
6 How long have you been a resident in this Council area?
7 What are the five main changes you have observed in that time in order of importance?
5
4
3
2
1
Comment
8 Can you put a timeline to those changes? When did you first notice change and what caused it?
Page 32
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
5
4
3
2
1
Comment:
9 What impact did these changes have on the community?
10 Please put a number next to each of the following in order you rate its importance in causing change
•
Drought
•
Climate change
•
Water buybacks
•
Low commodity prices
•
Other
•
Other
Comment:
12 Have there been positive consequences?
13 What changes are people making to the situation?
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 33
14 What is your vision for the area?
15 How do you rate the future of the region?
5 Very good future
4 Good future
3 Only average
2 It will fall behind
1 Pessimistic
Comment
15 What opportunities do you see ahead?
16 What needs to be done to achieve those opportunities?
17 What could your Council do?
19 What could the State Government do?
Page 34
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
20 What could the Commonwealth Government do?
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 35
Rice and Dairy Questionnaire
Rice Producer Survey:
Rice producer information:
Name:______________________________________________________________
Contact Phone: _______________________________________________________
Property Address (including name): _______________________________________
Property size (ha):
_____________________________________________________
Shire:_______________________________________________________________
Overview of the survey:
This survey is designed to provide insights into the rice industry in the Central Murray
region. The findings of this survey will be included in a report by Hyder Consulting
that assesses a future with less water in the Central Murray region.
The survey is estimated to take around 30 minutes to complete.
Your responses are treated as confidential and your name and other details will not
be communicated by Hyder Consulting.
Thank you for your participation.
Page 36
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Survey #: _______
Survey Questions:
The Rice Industry:
1. Over the last 10 years what are the major changes you have noticed to the rice industry around your
region? Please list in order of significance.
I.
____________________________________________________________________________
II.
____________________________________________________________________________
III.
____________________________________________________________________________
IV.
____________________________________________________________________________
V.
____________________________________________________________________________
2. What has caused these changes?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Your Farm:
3. Please complete the following table as it relates to your rice farm.
YEAR
water allocation
(growing
area
rice
water
provided
season)
planted
produced
usage
(% of total
(ha)
(Tonnes)
(ML)
allocation)
2000/1
2005/6
2009/10
4. Has the size of your rice farm changed over the last 10 years? Yes / No
If yes,
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 37
•
To what extend has the size of your rice farm changed?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
5. Have you made any significant investments on your farm in the last 5 years? Yes / No
If yes,
•
What were these investments and why were they made?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Have these investments been worthwhile? Yes / No. Please explain.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
6. Apart from rice production, do you have any other sources of revenue on your property? Yes / No
If yes,
•
What are your other sources of revenue?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Has your dependence on these other sources of revenue changed in the last 5 years?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
How successful have these other activities been?
_________________________________________________________________________
_________________________________________________________________________
Page 38
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
_________________________________________________________________________
_________________________________________________________________________
Production:
7. Has the way you grow rice changed over the last 10 years. Yes/No
If yes,
•
What are you doing differently?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Have other farmers across the region undertaken similar practices? Why / why not?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
8. If there is no water available to grow rice, what farming activities do you undertake over summer
instead?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
9. Do you employ workers on your rice farm? Yes / No
If yes,
•
Please complete the table below to show many workers you employ today compared to 10
years ago?
EMPLOYMENT
TYPE
# STAFF EMPLOYED
2000
2010 (average)
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 39
Full-time
Part-time
Casual
Water Usage:
10. Are you using less water on your farm compared to 10 years ago? Yes / No
If yes,
•
Why are you using less water?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Has using less water impacted on your production output, and if so to what extent?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
11. Has the way you use water for rice production changed over the last 10 years? Yes/ No
If yes,
•
What changes to your production methods have you made?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
How successful have these changes been?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
12. If there is a reduction in your water allocation do you diversify your operations to reduce your
reliance on rice production? Yes / No
Page 40
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
If yes,
•
What other activities do you undertake?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
13. Have you sold an entitlement of water? Yes / No
If yes,
•
What quantity, what security, and when?
_________________________________________________________________________
_________________________________________________________________________
14. Have you sold an allocation of water? Yes / No
If yes,
•
What quantity, what security, and when?
_________________________________________________________________________
_________________________________________________________________________
•
Would you sell water again, and if so under what circumstances?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
What did you do with the money raised from the sale of the water?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
15. Have you bought water entitlements or allocations? Yes / No
If yes,
•
What quantity, what security, and when?
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 41
_________________________________________________________________________
_________________________________________________________________________
•
What was this water used for?
_________________________________________________________________________
_________________________________________________________________________
•
Was it a success?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Would you buy water again, and if so under what conditions would you do this?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Government Assistance:
16. Do you receive any government assistance? Yes / No
If yes,
•
What subsidies do you receive?
_________________________________________________________________________
_________________________________________________________________________
•
How helpful have these subsidies been to your financial position?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Outlook:
17. What are the key challenges that your business is facing today?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________
Page 42
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
18. How viable is the Central Murray rice industry? Explain your answer.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
19. What suggestions do you have to improve the viability of the Central Murray rice industry?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
20. Are there any changes which you intend to make in the short-term (next 5 years)? Yes / No
If yes,
•
What are these changes?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Why do you plan to make these changes?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
If no,
•
Why do you not plan to make any changes?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 43
Scenario 1:
If you knew that the level of rainfall will return to the long-term average, how would you react?
A. Increase production and investment in your rice farm
B. Remain in production at current volumes
C. Diversify operations to include dry land farming
D. Sell water and exit irrigation industry
E. Other
Scenario 2:
If you knew that the level of rainfall will return to the long-term average, however, your water allocation
was reduced by 30% by government policy without subsidy, how would you react?
A. Increase production and investment in your rice farm
B. Remain in production at current volumes
C. Diversify operations to include dry land farming
D. Sell water and exit irrigation industry
E. Other
Scenario 3:
If you knew that the level of rainfall will remain as per the average of the last 10 years, how would you
react?
A. Increase production and investment in your rice farm
B. Remain in production at current volumes
C. Diversify operations to include dry land farming
D. Sell water and exit irrigation industry
E. Other
•
If you answered D for any of the responses above – please indicate what options you would pursue
if you were to leave the irrigation industry.
Page 44
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Dairy Producer Survey:
Dairy producer information:
Name:______________________________________________________________
Contact Phone: _______________________________________________________
Property Address:_____________________________________________________
Shire:_______________________________________________________________
Overview of the survey:
This survey is designed to provide insights into the dairy industry in the Central
Murray region. The findings of this survey will be included in a report by Hyder
Consulting that assesses a future with less water in the Central Murray region.
The survey is estimated to take around 30 minutes to complete.
Your responses are treated as confidential and your name and other details will not
be communicated by Hyder Consulting.
Thank you for your participation.
Survey #: _______
Page 46
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Survey Questions:
The Dairy Industry:
21. Over the last 10 years what are the major changes you have noticed to the dairy industry around
your region? Please list.
VI.
____________________________________________________________________________
VII.
____________________________________________________________________________
VIII.
____________________________________________________________________________
IX.
____________________________________________________________________________
X.
____________________________________________________________________________
22. What has caused these changes?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Your Farm:
23. Please complete the following table as it relates to your dairy farm.
YEAR
Number
(growi
of cows
milk
irrigated
water
allocation
ng
milked
production
pasture
usage
provided
seaso
(daily
(Litres)
(ha)
(ML)
(% of total
n)
average
water
allocation)
)
2000/1
2005/6
2009/1
0
If the number of cows milked has changed over the last 10 years then,
•
Why has the number of cows milked changed over the last 10 years?
_________________________________________________________________________
_________________________________________________________________________
If the annual irrigated pasture has changed over the last 10 years then,
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 47
•
Why has the amount of land irrigated changed over the last 10 years?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
24. Has the size of your dairy farm changed over the last 10 years? Yes / No
If yes,
•
To what extend has the size of your dairy farm changed?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
25. Have you made any significant investments on your farm in the last 5 years? Yes / No
If yes,
•
What were these investments and why were they made?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Have these investments been worthwhile? Yes / No. Please explain.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
26. Apart from milk production, do you have any other sources of revenue on your property? Yes / No
If yes,
•
What are your other sources of revenue?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Page 48
How successful have these other activities been?
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Production and Sales:
27. Has the way you operate your dairy changed over the last 10 years. Yes/No
If yes,
•
What are you doing differently?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Have other farmers across the region undertaken similar practices? Why / why not?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
28. Do you purchase fodder? Yes / No
If yes,
•
Where do you purchase your fodder from?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Has your use of purchased fodder changed over the last 10 years, and if so why?
_________________________________________________________________________
_________________________________________________________________________
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 49
_________________________________________________________________________
_________________________________________________________________________
29. Where do you sell your milk?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
•
Are you happy with this arrangement? Why / Why not?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
30. How have the following input costs changed from 2000 – 2010. Please complete the table below:
Change in input costs from 2000 to 2010
Water
Fodder
Electricity
Significant
Slight
No
De
increase
increase
chang
cre
e
ase
Significant
Slight
No
De
increase
increase
chang
cre
e
ase
Significant
Slight
No
De
increase
increase
chang
cre
e
ase
31. Do you employ workers on your rice farm? Yes / No
If yes,
•
Please complete the table below to show many workers you employ today compared to 10
years ago?
EMPLOYMENT
TYPE
# STAFF EMPLOYED
2000
2010 (average)
Full-time
Page 50
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Part-time
Casual
•
Is it a challenge to find and retain employees? Why / why not?
_________________________________________________________________________
_________________________________________________________________________
Water Usage:
32. Are you using less water on your farm compared to 10 years ago? Yes / No
If yes,
•
Why are you using less water?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Has using less water impacted on your production output, and if so to what extent?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
33. Has the way you use water to improve pasture changed over the last 10 years? Yes/ No
If yes,
•
What changes to your irrigation practices have you made?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
How successful have these changes been?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 51
34. Have you sold an entitlement of water? Yes / No
If yes,
•
What quantity, what security, and when?
_________________________________________________________________________
_________________________________________________________________________
35. Have you sold an allocation of water? Yes / No
If yes,
•
What quantity, what security, and when?
_________________________________________________________________________
_________________________________________________________________________
•
Would you sell water again, and if so under what circumstances?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
What did you do with the money raised from the sale of the water?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
36. Have you bought water entitlements or allocations? Yes / No
If yes,
•
What quantity, what security, and when?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
What was this water used for?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Page 52
Was it a success?
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
_________________________________________________________________________
_________________________________________________________________________
Would you buy water again, and if so under what conditions would you do this?
_________________________________________________________________________
_________________________________________________________________________
Government Assistance:
37. Do you receive any government assistance? Yes / No
If yes,
•
What subsidies do you receive?
_________________________________________________________________________
_________________________________________________________________________
•
How helpful have these subsidies been to your financial position?
_________________________________________________________________________
_________________________________________________________________________
Outlook:
38. What are the key challenges that your business is facing today? Please explain your answer.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
39. How viable is the Central Murray dairy industry? Please explain your answer.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
40. What suggestions would you make to improve the viability of the Central Murray dairy industry?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
41. Are there any changes you intend to make to your farm in the short-term (next 5 years)? Yes / No
If yes,
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 53
•
What are these changes?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
•
Why do you plan to make these changes?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
If no,
•
Why do you not plan to make any changes?
_________________________________________________________________________
_________________________________________________________________________
Page 54
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Scenario 1:
If you knew that the level of rainfall will return to the long-term average, how would you react?
F. Increase production and investment in your dairy farm
G. Remain in production at current volumes
H. Diversify operations – (e.g.) increased dry land farming
I.
Sell water and exit dairy industry
J.
Other
Scenario 2:
If you knew that the level of rainfall will return to the long-term average, however, your water allocation
was reduced by 30% by government policy without subsidy, how would you react?
A. Increase production and investment in your dairy farm
B. Remain in production at current volumes
C. Diversify operations – (e.g.) increased dry land farming
D. Sell water and exit dairy industry
E. Other
Scenario 3:
If you knew that the level of rainfall will remain as per the average of the last 10 years, how would you
react?
A. Increase production and investment in your dairy farm
B. Remain in production at current volumes
C. Diversify operations – (e.g.) increased dry land farming
D. Sell water and exit dairy industry
E. Other
•
If you answered D for any of the responses above – please indicate what options you would pursue
if you were to leave the irrigation industry.
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
______________________________
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 55
Tourism Questionnaire
Tourism Questionnaire:
Name:
_________________________________
# Phone:
Organisation:
Address:
Shire:
This is designed to provide insights into the tourism industry in the Central Murray region.
The findings of this survey will be included in a report by Hyder Consulting that assesses a
‘future with less water’ in the Central Murray region.
The survey is estimated to take around 45 minutes to complete.
Your responses are treated as confidential and your name and other details will not
be communicated by Hyder Consulting.
Thank you for your participation.
Page 56
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Tourism Snapshot:
1.
In the Shire, what level of growth has the tourism industry experienced over the last 5 years?
LEVEL OF GROWTH
INDICATORS
A. Significant growth
increased tourist numbers, increased tourism services / infrastructure
B. Slight growth
increased tourist numbers, limited response by industry
C. Stagnation
no change
D. Slight decline
decline in tourist numbers, limited response by industry
E. Significant decline
decline in tourist numbers, reduced tourism services / infrastructure
F. Unsure
2.
What factors have contributed to this level of tourism performance (as indicated in quest 1)?
3.
Is the tourism industry seasonal within the Shire? If so when are the peak and low seasons?
Why is this?
4.
What are the most popular tourist attractions / activities in the shire? Please rank in regards to
most popular and indicate the growth rate over the last 5 years.
GROWTH RATE
ATTRACTION
MOST
POPULAR
LEAST
POPULAR
HIGH GROWTH
LOW GROWTH
1.
Significant
growth
Slight
growth
Stagnation
Slight
Decline
Significant
Decline
2.
Significant
growth
Slight
growth
Stagnation
Slight
Decline
Significant
Decline
3.
Significant
growth
Slight
growth
Stagnation
Slight
Decline
Significant
Decline
4.
Significant
growth
Slight
growth
Stagnation
Slight
Decline
Significant
Decline
5.
Significant
growth
Slight
growth
Stagnation
Slight
Decline
Significant
Decline
Please explain your choices above.
5.
Within the Shire are there any events which attract tourists to it? If so what are these events,
and have they grown over the last 5 years?
Page 58
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
6.
Are there any tourism entrepreneurs in the Shire? If so what are they doing? And how
successful have they been?
7.
Has any investment in tourism been made in the Shire over the last 10 years? If so, what are
these investments and have they been successful in increasing tourism within the region?
8.
How do you rate the level of support from: Tourism NSW and The Murray / Riverina RTO, and
Local Council?
LEVEL OF SUPPORT
ORGANISATION
SIGNIFICANT SUPPORT
NO SUPPORT
Tourism Australia
Significant
Moderate
Limited
None
Tourism NSW
Significant
Moderate
Limited
None
Murray / Riverina Tourism
Significant
Moderate
Limited
None
Local Council
Significant
Moderate
Limited
None
Please suggest ways you could be better supported by these organisations.
9.
Do you think the drought has had an impacted on tourism in the region? Why / Why Not?
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 59
Tourism business: (operators only)
10.
How has your tourism business performed over the last 10 years?
A. Excellent
B. Good
C. Average
D. Poor
E. Very badly
Please explain why your business has performed as indicated.
11.
Has the size of your business changed over the last 10 years? If so, why?
12.
Do you plan to make any changes to your business in the next 5 years? If so, what are they and
why?
13.
Has the drought and reduced access to water in the region impacted your tourism business? If
so, please explain the extent of the impacts.
14. What are the 3 greatest challenges facing your business? Please rank.
MOST
IMPORTANT
CHALLENGES
1.
2.
LEAST
IMPORTANT
3.
Comments:
15.
Has the type of tourists (ie age, travel party, market of origin) in the shire changed over the last
5 years? If so what changes have noticed?
Page 60
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Strengths / Weaknesses / Opportunities / Threats:
16.
What are the strengths of the tourism industry in the Shire?
17.
Weaknesses?
18.
Opportunities?
19.
Threats?
Page 62
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Tourism Outlook:
20.
What growth rate do you think the tourism industry in the Shire will experience over the next 5
years?
A. Strong Growth
B. Slight Growth
C. Remain at current levels
D. Slight decline
E. Significant decline
F. Unsure
Explain your answer.
21.
What is your vision for tourism in the Shire / Region?
22.
What are the 3 biggest opportunities for tourism in your Shire / region.
1.
2.
3.
How do you think these opportunities could be developed?
23.
What are the 3 greatest challenges preventing a more vibrant tourism industry in the Shire?
Please rank.
MOST
IMPORTANT
CHALLENGES
1.
2.
LEAST
IMPORTANT
3.
Please explain your choices:
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 63
24.
What is the level of community support like for local tourism initiatives?
A. Excellent
B. Good
C. Average
D. Limited
E. Very poor
Please explain your choice
25.
How important to tourism is access and availability of water in the region?
A. Critical
B. Highly important
C. Moderately important
D. Slightly important
E. Not important at all
Why? Please explain your choice.
Page 64
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
APPENDIX B
PUBLIC MEETING ISSUES AND ACTIONS
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 65
Finley Public Meeting
ISSUES
ACTIONS
Uncertainty about water and lack of trust in
government to resolve the issues
There needs to be some bigger allocations to
catch up
There should be planning and funding for onfarm efficiencies and broader investment in
infrastructure
There needs to be structural adjustment and
a stimulus for local economy
Longer term planning with longer term
commitment
Certainty around trading policies for CEWH
Move to a different mix between general
security and high security to improve
reliability of supply (also consider carryover)
Ranking of environmental water versus other
trading classes
Food security (for our region and our nation,
neighboring countries)
Misconceptions about the importance of food
produced in Australia need clarification.
Urban people do not understand how
important Australian agriculture is in
supplying them with high quality food.
Register of future agricultural ownership in
our Region and Australia
There is less efficiency brought about by less
water. For example, stranded irrigation
infrastructure assets (swiss cheese effect)
Minimise level of adjustment
There should be alternative and equivalent
investment to offset water loss
There should be a strategic approach to subsystem retirement to avoid stranded assets.
Alternative delivery systems
Reconfiguring delivery systems
Attracting other irrigators from downstream
irrigation areas
Promote benefits of this irrigation area
against others such as our close proximity to
the water storages
Test rigour of SDL assumptions (maintain
watching brief)
Page 66
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
ISSUES
ACTIONS
Depopulation of community
Demonstrate how lack of water is impacting
our population
maintaining services (which ones to
maintain, how to fund and which ones to
keep)
-
Mechanization
How are we going to deal with service
provision in each township with declining
population?
Ageing population
Ability to keep health and education
services
Attracting people into region?
Make them care about our communities ad
understand socio-economic impacts
Understand changes and drivers of change
Maintain health and education services (put
actions in train to address)
Increase professional diversification
Decentralise government infrastructure and
services not reliant on water
Eliminate or minimize water loss (reverse
trading of water out of region)
Volatility in commodities
Value adding product (e.g. rice)
Erosion of equity via drought
Maintain pressure for property rights
Anticipate and counter act sudden loss of EC
support
Subsidising us to keep us here
-
Lack of water is causing depreciating value
of assets.Lack of water and economic
sustainability
Recognising link between on-farm and offfarm impacts (linkages and flow on effects)
Community resilience and vitality
People within community support town
businesses
Retail + service sector (important for
attracting new people)
Channel funding through shire to support
businesses not reliant on agriculture
Stress the locational and cost-effective
benefits of the region
Understand and promote additional
opportunities of highway etc not yet captured
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 67
Moulamein Public Meeting
ISSUE
ACTION
Concrete Actions
Development of Basin Plan
flawed – priority for
environment i.e. not social or
economic
Ensure better balance across three
competing interests
Fund study to critically analyse assumptions in Basin
Plan
- Lobby interpretation of Act to ensure
more equitable balance
Ensure socio-economic model shows three dimensions
of issue i.e. 1) what would happen if water taken out
2) purchase SDL at market value
3) Achieve same results through efficiency
4) acknowledge flow on effects to community
Engineering solutions for environmental watering
(minimize amount of water for achieving same outcome)
Loss of productive use of water
from agriculture from this area.
Link the loss of production to price signals
Declining population, loss of
services (broader community
impacts)
Transparent audit of environmental and productive
water use
Encourage housing and industry i.e. attract industry to
area (renewable energy established and fed back into
grid)
Provide additional grants for housing in Shire
Business grants
Encourage people to set up in surplus housing
Water efficiency engineering solutions (e.g. recycled
water)
Broader impacts on community
Page 68
Use drought and its cost as example of
impacts caused by removal of permanent
Use the outputs from this consultancy to influence
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
from loss of water
water
politicians
Emphasize impacts on mental health
Influence urban public (media campaign + protests)
Use media sympathetic to rural Australia (advertising)
Relocation of people from rural
areas to cities (high cost)
Maintain rural areas as decentralized
areas
-
create jobs locally within community
Highlight broader impacts outside of region
(multiplier effects of 1 rural job compared
to job in city; multiplier effect of dollar)
Economic model
Get broadband into region ASAP (links to above)
Highlight locational advantages of area
Maintain and enhance services to rural areas
Create proposition to bring back services
Lack of understanding and
empathy of rural issues
Educate city communities
Put agriculture back on agenda re school curriculum
Emphasize quality of home grown produce
(campaign) vs imported produce
(environmental footprinting)
Use drought and its cost as example of
impacts caused by removal of permanent
water
Food security and population growth
Challenge misconceptions (e.g. lower
lakes) don’t live the lie (stand ground)
Make the scientists accountable – greater
vigilance
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 69
Social capital of region at risk
(erosion of equity + capital)
Building the evidence base to understand
the impacts
Declining proportion of ag in
Australian economy (loss of
variety of economic base)
Viability of councils report and socio-economic model
What are the values of our region? Common
understanding
Promote sustainability
Promote efficiency of gravitational irrigation (low energy
inputs)
Industry investment group proactive in modeling various
configurations. Shire ideally suited to annual cropping
and family farms
R&D fundamental to what we do
Influencing political decision
making outside the region
Making area less of a safe seat
Challenge the process for Basin Plan development
Resurrect water for food campaign
(requires improvement)
Lack of ownership and engagement and community
consultation in Basin Plan
Organised protest rallies in cities
Trading resources back into region (offset
losses triggered by government
intervention)
Effective local member (promote
accountability)
Understand drivers of decision makers
(e.g. price) – market research
"could we somehow tap in to
the resources of someone like
Dick Smith , who is positive,
innovative and passionate
about Australia, who has
started up industries , and who
Page 70
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
could perhaps throw some
suggestions for industries in
this area - perhaps
something that none of us have
even thought of. and could be
even better than the industries
that we have had here
historically."
- "my thought since then has
been let’s see if it would be
possible to get funding for the
Moulamein- Balranald road.The
fact that the Yanga National
Park is now open and getting
more visitations should be an
important consideration, also
there is a new hospital being
built in Balranald to cater for
the outback communities. ( a
lot of people from Tooleybuc go
to Balranald for medical
reasons) As well as this I would
like to include a visitation
Tourist Building for Moulamein,
not one that has to have some
one employed, but a decent
building promoting the whole
area . I have always felt that
around this area we don’t
promote all the wonderful
birdlife, if we were given a
decent grant we could have
excellent displays, some of the
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 71
displays at Yanga are
superb(of course that’s all gov.
money) There are birds
everywhere now because of all
the water, but even in the dry
times the bird life is still about."
Page 72
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Moama Public Meeting
ISSUE
ACTION
There will be an
incremental water
demand from urban
townships (e.g. Echuca)
resulting in competition
for water between
environment, rural and
urban interests
The Water Act should be amended to allow
conversion of high and general security to town water
Uncertainty regarding
water security
Lobby government for long term commitment
There should be continuing water saving by
restrictions, education and behavioural change,
recycling schemes
Establish a better balance between environmental,
social and economic interests set out in Water Act
2007
Establish robust evidence base through this
Strengthening Basin Community project
MDB storage access
provisions across
Southern connected
basin (carry over water)
– reactionary policies to
drought
Review of current provisions and physical operation of
storages
Understand and clarify ownership, storage and rules
around use and release
There are
inconsistencies between
states (carry over
provisions for high
security variable)
Ageing population,
difficulties with
succession planning
(limited to family
succession)
Real rate of return from agriculture needs to improve
Subsidy for agricultural studies
Start up funding for young farmers
Succession planning support schemes
Decreasing morale in
farming community
Managing debt –
declining equity. It
means they stop
purchasing and reduce
investment
Remove uncertainty
Treat issue not symptoms
Social and rural support networks (maintain and
enhance funding)
Rural counselling services
Emergence of corporate
farms and amalgamation
of family farming units
Accept change
Lack of information to
inform water related
Greater certainty from Commonwealth with regard to
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 73
ISSUE
ACTION
market decisions
price of water
Training courses in key aspects of water trade
Population shifts in
farming communities –
declining population +
declining terms of trade
Focussed decentralisation policy for Sydney +
Melbourne
Government intervention
e.g. Native Vegetation
Act 2003 (over
regulation)
Lobbying where negative impacts and adequate
compensation for custodianship (stewardship
payments)
Emerging
environmentalism in
cities and impact on
rural areas (e.g Barmah
Forest)
Establish iconic attractions to complement forests
Water traded out of shire
This project will assist in quantifying impacts
Transforming visitor experiences
Government idealogy
(e.g. “free trade”)
-
Removal of water
from land and
impact on rate
yields
-
Managed
investment
schemes
-
Interference of
government in
market
Consequences of water
trade (winners and
losers)
Removal of water from
food production for
environment
Economic model (tipping points)
Offset water losses to counteract community impacts
-
Community development and employment
fund
Political intervention
overriding best science
outcomes (e.g. Barmah
Forest)
Barrages are taking
water from our area
Page 74
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
ISSUE
ACTION
Economy heavily
dependant on water
Investigate alternative sectors and industries
Critical mass of
distribution networks
(stranded assets / swiss
cheese effect)
Ensure integration across other projects so tipping
points are identified
Strategic landuse
planning
Landuse capability
-
Understanding
regional
productivity and
point which
communities and
their industries
are not self
sustaining
Changing demographics
of local government
areas
-
Impacts on
service delivery
-
Welfare
dependence
(pressure on local
government
services)
-
Diminishing rate
payer base
Lack of government
research and
development for area
Understanding regional productivity
Identify soil types on carrier systems to improve water
use efficiency
Scenario planning + socio-economic modelling
Look at common themes across other SBC projects
Negotiate offsets in R&D to compensate for loss of
water
Identify on farm water use efficiency programs
-
Whole of system modernisation
Extracting maximum
regional benefit from
environmental water
applications (e.g.
Pericoota)
-
E.g tourism
benefits (inland
fishing)
Inadequate water
Improvements required
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 75
ISSUE
ACTION
efficiency and water
delivery systems
Drainage and water recycling schemes in urban and
rural areas
-
System losses
Land and water
management planning
Page 76
Push for generation 2 land and water management
plans (sustainability, conversion to dryland farming
and structural adjustment)
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Deniliquin Public Meeting
ISSUE
ACTION
Community is dying
(killed!) because of public
policy (Big changes in last
10-12 years)
Increasing representation of community through
involvement in local and state politics (taking the
mystery out of getting involved)
-
-
-
“Government done
more damage than
drought”
Population
shrinking having a
huge effect on skill
base (skills
integrity)
Depressed real
estate market –
impact on property
values
-
Concern about
welfare
dependence in
town
-
Trading resources
out of region to
meet urban
interests
-
Lack of change
management and
support
(compounding
grief) – impacts on
mental and
physical health
(inability to develop
resilience)
-
Removal of
government
services
Management of river
system (issues with lower
lakes and barrages)
-
Issues on priorities
-
Announcements
about allocations to
late
Action required on national plan for food production
and how regions fit into it
Find way of drawing industry back to region (e.g.
natural gas)
Find way to improve infrastructure to encourage
departmental HQ to return to region
Address cost shifting from State to Local
Government to improve services (lobbying and
awareness raising)
Work more regionally across councils i.e. not in
isolation
Ensure general security water allocated in timely
manner to provide greater certainty
Ensure that long term policy decisions are not based
solely on one recent drought
-
Existing water sharing plans have not had
chance to be tested and now new policy
changes are not giving chance to be
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 77
ISSUE
ACTION
(see report on Lower
Lakes)
implemented
Lobby for weir at Wellington
Need to look at other options in addition to
freshwater
Undertake investigation into Water Act and
consequences of it
Understand environmental impact of barrages
Credible investigation into the management of the
Lower Lakes in relationship to delivery of water
(e.g. diverting fresh water around western perimeter
of lake)
General uncertainty
creating community
paralysis
-
Reduced
investment
-
Governments
changing goal
posts
Set a standard and stick to it (e.g. WSPs)
Reinforce that there is a direct cost in people moving
out of the area into cities
Highlight the government needs to take a more
active role in communities to offset what is taken
(e.g. return of government departments)
Tourism would be happening anyway and it is
absurd to think that it will replace agriculture. If there
is scope for tourism development then this can
happen without water. There is no connection
between the loss of water and an increase in
tourism. (“tourism is not the silver bullet but there are
some opportunities for contributions to regional
economy”)
Push for regional airport and air service
Lack of strategy and
vision for agriculture and
food production
Clear and succinct plan by federal and state
government to understand real value of food
-
Reverse approach to water consumption
campaign (e.g. water for food campaign)
Water buy backs
not used
strategically (e.g.
sub-system
retirement)
Encouraging people in cities to understand flow on
effect of food choices (e.g. Tasmania)
-
Stranded assets
(Swiss Cheese
effect)
Packaging and labelling of products from Region
(e.g. Sunrice)
-
“Death by a
thousand cuts”
-
-
Show linkages
Sell competitive advantage of Australian food
Restrictions of foreign ownership of Australian farms
Need food security – look at actions of other
Page 78
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
ISSUE
ACTION
countries
Highlight regional efficiency of water use of this
region
Government intervention
in water trading markets
Should be transparent
Over emphasis on
environmental water (need
more balance with
economic and social
interests)
Establish evidence base to ensure more equitable
balance across environmental, social and economic
interests
-
Impacts of delivery
of environmental
water – how will it
be delivered?
-
Potential increase
of adverse flood
risks following
release (risk
assessment of
shire, rural and
community
infrastructure
required)
-
Carry over issues
(dams full of
environmental
water) – adequate
tagging
-
Lack of sound
science (river
operation rules
haven’t kept pace
with current public
policy) – perverse
set of rules
-
Environmental
water has
precedence over
general security
water (big problem)
-
Delivery, timing of
delivery and
Show consideration for timing in entering the market,
particularly temporary water
Need to address flaws in Water Act 2007
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 79
ISSUE
ACTION
capacity of river
system to
accommodate in
line with other
social and
economic uses
Land and water
management plans were a
positive. People invested
in positive NRM outcomes
and land improvement.
(Not recognised by
government NOW)
-
Significant
investment (private
and public) not
appropriately
utilised
-
E.g. Deniliquin
Council invested
over $300K
-
No opportunity for recoupment of
the investment (exacerbated by
loss of water)
Reinstate land and water management plans and
recognise previous investments
Recognise custodial nature of farming families
Managed investment schemes impacted
water market (damaging effects)
Taxation reform
Maintaining area as best food producing
area in Australia – Food Security
Organised study tours to region
-
Area could be expendable??
-
Measure value of crops by dollar
output and not people that is
feeds
-
City folk don’t value Australian
food production
-
National security an issue
-
International issues – feeding our
neighbours
-
Environmental footprint much
larger for imported food
Page 80
Recognise the impacts on commodity markets
Improve school curriculums
Raise awareness and make media more
accountable
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
ISSUE
ACTION
Area not appreciated by those outside
region
Opportunities for targeting City Media to promote
value of region
-
Negative perceptions
-
E.g. Barmah Forest
-
If we are not here who will
manage the land (e.g. weeds,
pests)
-
Land custodianship and
stewardship (direct personal
relationship with environment) –
BIG DISCONNECT
Lack of alternative industries to drive
same return as agriculture – limited
options
-
Ute Muster required every week
Government to promote the value of agriculture and
food production
Need the research to support industries
Retain present industries suitable to the regional
environment
Research to identify opportunities
Community Engagement and Workshop Summary Report - Stage 1—
Hyder Consulting Pty Ltd-ABN 76 104 485 289
c:\documents and settings\bsaz0401\desktop\stage 1 sbc community workshop and survey report_final_1 11 10.docx
Page 81