Premier John Brumby’s decision to raise the four per cent cap on water trade and the downturn in the dairy industry has affected the number of people trying to sell water, Shadow Minister for Country Water Resources and Deputy Leader of The Nationals Peter Walsh said today.
Mr Walsh has questioned Goulburn-Murray Water’s (G-MW’s) logic in stating last week that the real measure of producers wanting to exit irrigation was the number of farmers selling delivery shares as well as water shares.
“The number of people applying to sell their water shares in northern Victoria has more than doubled since the Brumby Government announced it would lift the cap to allow the Commonwealth Government to purchase water,” Mr Walsh said.
“The fact that producers are retaining their delivery share is not an indication that all is well in the sector.
“G-MW is misreading the dynamics of the industry in an effort to put a positive spin on the numbers.
“Producers are keeping their delivery shares because if they choose to sell them they will have to pay thousands of dollars in termination fees to exit the system.
“It doesn’t make sense for people to fork out that kind of money when there’s a strong possibility the fees could be reduced or waived if the delivery infrastructure is rationalised as part of the Northern Victorian Irrigation Renewal Project (NVIRP).
“It’s just good business sense for food producers to retain their delivery share until such time as NVIRP decides whether it wants to rationalise their channel. Then they might not be required to pay the termination fees.”
Mr Walsh said the Brumby Government had to acknowledge the ramifications of its decision to remove restrictions on water trade.
“The increase in applications to permanently sell water is an indication that more food producers are trying to exit the industry,” Mr Walsh said.
“People are selling water because they are short of cash and they’re keeping their delivery shares because they can’t afford to pay termination fees.
“The massive increase in those wanting to sell water only goes to show the Brumby Government made the wrong decision.
“It has undermined confidence in irrigated food production to such an extent that many people now feel the only way forward is out,” Mr Walsh said.
Media contact: Peter Walsh (03) 5032 3154
