Paul Dykes: Farmers awash with water woes

Photo / Elaine Fisher

In the fifth of a six-part series, Paul Dykes reveals a national survey showing water storage and irrigation proposals are swamped by public environmental concerns

Slow progress is being made in implementing new water infrastructure schemes because of public concerns that access to more water will simply encourage farmers to intensify their operations at the expense of the local environment.

In part 1 of its KPMG Agribusiness Agenda report, KPMG's global head of agribusiness, Ian Proudfoot, says the worldwide scarcity of water makes it critical that the potential of water is realised.

He says farmers need to take an active role in explaining the benefits of water to their local communities and show how farming businesses can deliver improved economic and environmental outcomes by adding water.

In March and April, professional services firm KPMG conducted 13 roundtable discussion sessions with rural leaders throughout the country while researching its two-part agenda report. Part 1, titled Facilitating Growth in an Uncertain World, has just been published.

It says that though some progress has been made in the past year to get water storage and irrigation schemes into construction, the challenges of realising a scheme remain considerable. However, the most notable feature of this year's roundtable conversations was the focus on water quality and nutrient management and how this changes the business case for a proposed water scheme in many and varied ways. The report notes that the Government has issued a range of proposed amendments to the National Policy Statement on Freshwater Management in the past year. These retain a commitment to maintain or improve water quality while adding a requirement for communities to define their freshwater objectives.

KPMG was told many schemes were struggling to convince their communities of the need for the investment.

The concern that participation costs would force farmers to intensify their production when extra water became available had many communities linking irrigation directly to environmental degradation.

Much of the modelling for schemes was based on an unconstrained ability to convert to a land use that would deliver farmers a return over the cost of water a scheme supplied. However, nutrient caps may restrict this freedom, making it more difficult to secure commitments to take water.

The report says the reality is water is not solely a primary sector issue but a a whole-of-economy issue and one that needs to be addressed as a priority.