THE Federal Government’s Water for Fodder program is an example of reactionary policy-making and will be exploited, a Sunraysia irrigator has warned.
The program, part of a drought-relief package announced last month, includes the release of 100 gigalitres (GL) of Murray River water to be used by eligible irrigators to grow fodder.
Farmers can apply for two, 50 megalitre (ML) parcels priced at $100ML in the first round of the program – the release of 40GL – this month.
The remaining 60GL will be released in April next year pending a review of the first phase.
Red Cliffs dried fruit grower Bill McClumpha on Wednesday said the program was “absolutely the government being seen to be trying to do something”.
“It’s typical of the reactive policies that happen when politicians are under the type of extreme pressure that they are now,” he said.
Mr McClumpha, a Victorian Farmers Federation Sunraysia branch member, said “everyone knows” the Water for Fodder program would be exploited.
“Any entity, including corporates, can use up to two allocation bank accounts (ABAs), to apply for up to two 50ML parcels, so long as they hold less than than 1GL of water in their allocation bank accounts prior to applying,” he said.
Mr McClumpha said while the pasture irrigators must grow fodder with the 50ML of water, there was nothing preventing them from selling water they already had in their ABA onto the open market.
“So an irrigator could pay $5000 for a 50ML parcel under the scheme and have it credited to his, or its, ABA,” he said.
“He could then immediately sell an equivalent, no-longer-required 50ML, on the market.
“At $900ML for example, a 50ML parcel would realise $45,000, and the irrigator would make a taxpayer-funded $40,000 killing. Or $80,000 by using the permitted two ABAs.”
Mr McClumpha said the release of 40GL would “mean a hell of a lot more to struggling horticulturalists” in Sunraysia than fodder growers.
“(Sunraysia horticulturalists) don’t have the option of letting a paddock lie fallow,” he said.
“They’ve got to keep their vines, or almonds, or citrus, or whatever it is, alive.
“They have to go into the market at high prices.
“They haven’t got a free kick from the government in the form of $100 a meg water.”
“So for many pasture growers, including well-heeled corporates, the scheme is not so much a measured response to demonstrated hardship as a taxpayer-funded Christmas bonus to be enjoyed while our ineligible local horticulturists, including our battling dried fruit and wine grape growers, tighten their belts and ponder their survival strategies.”
Mr McClumpha suggested a means-tested scheme which gave the most in-need fodder irrigators first access to water would make more sense than the current program.
In addition, he said one way of eliminating any exploitation would be to restrict ABA holders who obtained the water parcels from trading on the open market for that water year.
