In 2019, 10% of Australian Water Owned By Foreigners

Via The Guardian, commentary on Australia’s water scarcity challenge:

I’m starting to think that after living on a farm for 25 years, I might now learn the art of agriculture at the age of 54. I’m starting to think, in the hierarchy of needs, it might matter more to me than journalism. Because of, well, food. As a journalist for 30-plus years, that is a hard truth. But food matters. Where food comes from matters. The landscape that provides our food matters.

And if you accept those propositions, we need a conversation about what we want from our food producers – our farmers. We need to think about what we want our regional landscapes to be. Talking to farmers, as I do in my home town and in my work, I think we could look back in a decade and find we have lost a fair chunk of middle growers: the in-betweeners. What we will have left is small, specialised food producers who cater to niche eaters with decent incomes, and vast entities churning out cheap food demanded by markets controlling our rural landscapes and our water. In that scenario, Australia would revert to the squatters’ blocks of days past – vast estates with sporadic populations dotted through the countryside. Which is fine, I guess, if that is what Australia wants. As long as it is an informed decision.

When most people think of Australian agriculture, they think of large tracts of the country sown down to waving fields of wheat. It is true that just under 58% of Australian land is used for agriculture, but a tiny 4% is used for cropping and horticulture. That is because most of Australia is not arable for those staple crops that we have grown since white settlement – crops that we commonly associate with our agricultural industry. That’s why another 9% of land is used for animals grazed on modified (introduced) pastures and a staggering 45% of land is grazed on native vegetation. (To digress, that is the problem. It’s all very well to yell at omnivores for wanting to eat meat, but most of the country cannot sustain the soybeans, lentils and chickpeas.) For all the fights over water recently, irrigated agriculture (including crops and livestock) accounts for less than 1% of total agricultural land.

Most Australian farmers are dryland farmers, but irrigated agriculture produces almost one-third of the industry’s economic value. That land usage means farmers are responsible for more than half the landmass. So, it goes without saying that the non-farming population should have an interest in what they do – not just from a food perspective, but also from an environmental perspective. Metropolitan and rural people have a stake in the future, and no matter which way you cut it, this requires some government guidance.

The reality is no one, farmer or not, expects to live entirely without regulation. While complaints about red tape abound, most operators know they have a level of restraint because the land has its limits. The role of government is to take into account the balance required between private rights and the public good. Some drought funding, Landcare and private-public partnerships are examples of intervention in land management for the greater good.

Yet, decades of unfettered markets, originally designed to force farmers to become more economically efficient, are leading to distorted outcomes. If government policy continues to take a hands-off approach, I fear we may see the rural landscape return to a type of corporate squattocracy, with a few failing towns and teams of fly-in fly-out workers. So long to the in-betweeners.

Water is the best example of this. When water titles were disconnected from land titles, farmer advocates applauded because it allowed another tradable commodity. But turning water into a commodity has opened the markets to any trader, national or international. The basic rules of supply and demand mean that if you treat water as just another asset and don’t need to grow anything, you can sit on water until supply is short. Like in a drought. What could go wrong?

The thing about markets and their regulators is that they often assume everyone has perfect information. Right now, along the rivers and tributaries of the Murray–Darling Basin, ordinary multigenerational farmers – usually in family structures – are competing with behemoths, with full water-trading desks, and those giants have seen the future. So there is a squeeze between these two groups of farmers, large and small to medium. Adding on other high-industry users like mining, and increasingly, towns are running out of water.

Webster Limited has risen to prominence in water coverage because they have 150,000 megalitres, or 150,000 million litres of water entitlements. Webster is one of the largest irrigated farming producers in Australia. When you eat a walnut, it is probably a Webster walnut, given they produce 90% of Australia’s walnut crop.

Small to medium-sized farmers do a lot of things in a day – farming, trading, hedging, investing – but they are farmers at the end of the day. They are intimately involved in the day-to-day tasks and don’t have legal departments or a genius bar for water analysis. Yet, they have been tossed into what is fast becoming a water war. A 2016 World Bank report predicted: “Water scarcity, exacerbated by climate change, could cost some regions up to 6% of their GDP, spur migration, and spark conflict.” Forget big oil and big energy, water is the new black.

A 2018 study from the European Union’s Joint Research Centre found the five most vulnerable places are the Nile, Ganges-Brahmaputra, Indus, Tigris-Euphrates and Colorado rivers. The study acknowledges that the “combination of climate change and demographic growth is likely to exacerbate hydro-political issues”, and the researchers worry about cooperation between countries. That is the global picture.

In Australia, we have already seen the same issues fracture state relationships and regional communities. Water is fundamentally destabilising electorates for sitting members on safe margins. We are the driest continent in the world. We are a big agricultural exporter. Who wants a bucket of our water? The answer is everybody. In 2019, 10% of Australian water was owned by foreign interests, with the United States and China the biggest of those foreign owners. In the Murray-Darling Basin, foreign interests own 9.4% of water but it is unevenly spread. In the northern basin, the proportion of foreign water ownership is 20.9%. The place to be is at the top of the river.

A more fundamental issue than foreign ownership is transparency in the market. At the time of writing, we can’t see who is trading water – nay, we can’t even see how much water is in the system to know whether it is being traded according to the rules. We can’t see whether the water savings, paid for by taxpayers in the form of water buybacks, or water saving infrastructure exist. Our own Coalition water minister says that 14% of water rights are owned by people who have no land. The ticket clippers.

Water is the most precious natural resource, but soil comes a close second. Michael Jeffrey grew up in the ancient red soils of Wiluna, Western Australia, and served in Vietnam before he became governor general. He is not prone to political outbursts, yet now he spends his time trying to get Australia and the world to take soil degradation seriously. As the head of Soils for Life, Jeffrey told the federal government in a 2017 report that protecting and improving Australia’s soils and managing agricultural intensification was an imperative for “global security”.

Jeffrey wrote to the prime minister telling him that water and soil security were two of the world’s six existential challenges, the others being energy security, climate change abatement, biodiversity protection and human health. “I believe that soil and water security will increasingly underpin global social stability and security.”

The Department of Defence came to a similar view in a submission to the Senate inquiry on the implications of climate change for national security: Australia’s national security includes state and human security and is inherently linked to the security of health, water, energy, food and economic systems at the local, national, regional and global level. Defence views climate change as a threat multiplier, having both direct and indirect impacts on Defence’s business.

Jeffrey wants to see properly funded agricultural education for Australia’s farmers and agronomists as well as soil and water scientists – independent from organisations with vested interests, such as big agricultural chemical companies. (The vast majority of agronomists advising Australian farmers are provided by agribusiness companies that sell products, the sales of which offset the cost of the agronomy service.) Jeffrey also wants farmers to be paid a fair price for food. We as consumers have a big role in this story because no farmer, mega supermarket or agribusiness will ignore the market.

Both of these submissions seem to have fallen on deaf ears. Instead, as a country we obsess about squeezing the last little bit of economic production out of our natural resources without a clear, long-term plan for food and farming in an uncertain global economy and an increasingly stressed environment. So much of the agriculture debate places farming in a single context – either as part of an economy or an environment. It is part of both.

This entry was posted on Sunday, December 8th, 2019 at 6:35 pm and is filed under Australia.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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