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In the iconic ‘My Country’ Dorothea MacKellar best described Australia’s cyclical weather patterns as the land ‘of droughts and flooding rain’. Rarely is there not one part of Australia not experiencing drought conditions in a year but they always appear to bounce back. For example, as the lower Murray Darling enters another dismal season a record 2.45 MT of sorghum is estimated to be harvested in the Darling Downs and northern NSW and for some in that area its their best crop in 9 years

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The $50 million water buy back is being done by a tender system process which looks identical to the native vegetation buyback schemes being run by the Federal government based on Market Based Instruments (MBI)

Basically what happens is that farmers fill in the form saying how much they are willing to give up (areas, ML, ETC) for a set price. The government then sorts out the bids to meet a set number of goals (area, specific characteristics, etc) that each offer has and then in effect uses a cost effectiveness process to obtain its goals.

In effect the government is acting as a monopoly buyer as they have all the information from the bids and the sellers are operating with imperfect information unless there pervious tender and past history can guide future tenders.

Now the problem we have is that the government is saying that farmers are being unrealistic with their tender price and that they must resubmit. Now this does mimic a monopoly buyer dictating the final price paid and not the true value of the asset.

The problem the government has here unlike most other natural resource issues (native vegetation management) there are in fact other players in the market. What this will means is that people who need the money or wish to offload their water licences will offload their entitlement into the water trading market, thus potentially removing it from environmental flows forever.

This mimics the fundamental problem with the entitlement structure as people had the ability to sell their entitlement even sleeper licences onto the market. This then increased the amount of water used for irrigation further straining the system. Such a reaction by the government may in fact mean far less water for the environment as people will be far more likely to take the market price thus negating the policy.

Years ago when the QLD government acquired a series of new national parks we had ministers standing in front of flowering Lantana saying what a marvellous new national park it was. The irony from those interviews is that Lantana is a declared weed in Queensland.

With ownership comes responsibility and hopefully resources to match. By increasing the size of Australia by some 2.5 million km2 means that unless there is a significant expenditure to ensure that the sovereignty is maintained, illegal fishing will continue.

The move can not just be about what oil and gas discoveries there are to be made. We have maritime safety responsibilities and enforcement issues that have to be addressed.

Its going to be an interesting budget.

RSMG’s David Adamson and Peggy Schrobback attended the 2nd International Salinity Forum, held from 31 March – 3 April 2008 in Adelaide, where David presented a paper on “Options for Managing Salinity in the Murray-Darling Basin under Reduced Rainfall”.

The conference provided the great opportunity to meet with experts in salinity from all over the world and discuss themes like understanding the impact of salinity on the community, policy and environment and essential management strategies. Experiences were particularly shared on progress of salinity mitigation and adaptation. Special emphasis was also put on climate change and its uncertain impact on salinity. Current salinity policies in Australia were highly criticized by leading experts in the field for failing to set achievable targets, neglecting necessary incentives for behavioral change, limited capacities and policy driven budgets.
The forum clearly stressed the importance of improved partnerships between salinity affected communities, research and funding institution. Further, it was agreed that coordination, cooperation and consensus about multidimensional issues related to salinity are gaining even more importance under drought conditions.

As part of the conference, David and Peggy got the opportunity to undertake a field excursion to Lake Alexandrina, Australia’s largest permanent freshwater lake, and Murray Bridge, where natural flood plains as important part of Lower Murray Irrigation Area with its various irrigation techniques where examined. Of course, a field trip to Adelaide’s countryside would not be complete without a visit at the lovely Hahndorf where the two could not resist indulging in German food and splendid wines.

The Australian Agricultural Resource and Economics Society conference was held in Canberra this year. The group presented three papers dealing with issues in the Murray Darling Basin.

The first paper argues that its how climate change impacts are modelled that provide the greatest interest.

The second paper deals with long term issues for water quality reaching Adelaide and the possible options there are for salinity mitigation in the basin.

The third paper examines what may happen to the basin as environmental flows to the Snowy River are re-established.

By the way next years conference is at Cairns. I’m sure that’s going to be a well attended conference especially for the pre-conference tours that are going to be planned.

According to the ABC, 65 million kilograms of beef has been recalled as due to irregularities in an abattoir in the US. This has sparked suggestions about another outbreak of Mad cow disease. The last time a single cow was reported with mad cow disease in the US the Japanese blocked all US beef exports for 14 months.

It is likely that once again the US will find it either frozen out of the market or that Japanese consumers may not choose US labelled beef out of safety concerns. This last statement depends on a range of issues for the individual such as education, price, risk aversion, colour, tenderness; preference for gain feed beef, etc as listed in the ABARE report.

This should be good news for prices in the short to medium terms for domestic beef producers especially up north where once it dries out they will have very good pasture this year. It will depend upon the current level of stock to how well they will do.

This will also be reflected as in the supermarkets and I’m sure we will see it as a reason to why domestic food prices are increasing by the new supermarket price watchdog.

The group has been very busy since the last update. Firstly we need to welcome the three new staff members that have joined us since September.

New staff members (in order of appointment)
• Liam Wagner (September, Post Doc)
• Peggy Schrobback (November, Research Assistant)
• Sarah Chambers (January, Research Assistant)
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I’ve finally got around to finishing this blog post and it’s a bit dated now as the auction has been put on hold after the Federal government jumped up and down

There were plans to raise about $2.5 million to purchase an estimated 4,500 ML of water for the environment out of the total 8,000ML of a new general security license in the Warrego This means that the water will only be extracted once the system’s flow has reached a critical level.
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There is a proposal to enhance the oceans ability to absorb carbon. The notion is to seed the oceans with iron dust, this increases the growth rate of algae, which then increases the rate of carbon sequestration. The company then wants to sell this idea for carbon credits.

At the moment their is a lot of people saying things about climate change to potentially cash in and as Kert Davies suggests..

“The overarching thing is that there is definitely a panic about climate. If someone could come up with a quick band-aid fix to this problem they would be a hero to humanity,” said Greenpeace research director Kert Davies.

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While researching the whale article I stumbled upon this gem.

The 2008 international tuna catch has been increased because some countries could not fill their 2007 quota. One could suggest that the argument is slightly problematic as if we can’t meet the quota we just have to try harder to exploit the fish stock. What part of unsustainable, or intergenerational equity don’t some people understand?
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