Irrigators’ call to oust speculators from temporary water markets ignored by NIC

The nation’s peak irrigation council has dismissed calls to ban non-water users from trading in the temporary market.

THE National Irrigators’ Council has called on the Senate and Federal Government to ignore the bulk of water users’ calls to oust speculators from the Murray Darling Basin’s temporary water markets.

In its submission to the current Senate Inquiry into the Execution of the Murray Darling Basin Plan the NIC states: “agricultural groups are calling for temporary bans on non-landowning water investors from buying and carrying over water”.

“The statement is incorrect. NIC does not support this call, nor, as far as we know, does the National Farmers’ Federation.”

Yet a long list of irrigators have repeatedly called for non-water users to be banned from trading temporary water, including Victorian and Riverina irrigators, the Australian Almond board, Citrus Australia, Australian Olive Association, Australian Table Grape Association, Australian Grape and Wine, Summerfruit Australia, Pistachio Growers Association and Australian Walnut Industry Association.

Olive oil producer Boundary Bend Limited's executive chairman, Rob McGavin, said he was pulling out of the NIC, given it had “been infiltrated by speculators and non-water users.

“This organisation (NIC) is going to stand for nothing. You either represent irrigators or you represent non-irrigators, not both.”

“There’s no doubt city investors owning permanent water is fine, but it’s fundamentally bad to have non-water users buying temporary water.

“The effect is they can pile in (to the market) when the BOM says there will be an El Nino and hoard water.”

Mr McGavin said the added pressure on water prices damaged “base load” users – dairy, rice and irrigated cropping – who then lost markets, processing facilities and the ability to recover when water became plentiful once again.

Just last Friday one of the MDBA largest speculators, Duxton Water, issued its latest annual report, which showed it earned $87.9 million from the sale of temporary water in calendar year 2019, an almost fourfold hike on the $23.5 million in 2018 sales.

The report showed the temporary market delivered the bulk of Duxton’s 2019 revenue of $96.45 million, at a time when temporary water prices surged from $420 a megalitre in January last year to reach almost $1000/ML by November.

The financials also show Duxton Water’s parent company, Duxton Asset Management, is an NIC member.

In June last year The Weekly Times reported Duxton was sitting on the NIC’s Water Market Reference Group, which prepared the peak irrigator body’s submission to the Australian Competition and Consumer Commission’s review into water trading.

NIC chief executive Steve Whan said a rule limiting non-water users purchase of temporary water “might, for example, impact small (or former) farmers who have their water assets in self-managed superannuation funds, while missing large investors many of whom are also consumptive users”.