7.8 Case Studies
7.8.1 Lack of Integrated Policy Development in NSW
and the Nexus
NSW water and energy regulatory and governance framework is rooted in the
National Competition Policy Reform which was premised on the idea that competitive markets would best serve the interest of consumers and the wider community.
However, the QLD and NSW Governments have since lacked the capacity and
willingness to effectively integrate and harmonise the water-energy-food policy
areas within and across State borders. This lack of coordinated and integrated policy
development has particularly affected food and fibre producers due to significant
energy and water infrastructure investments in NSW. This has caused significant
electricity price increases at the same time as irrigated agriculture has become more
energy intensive. Whilst water is a prerequisite for all food and fibre production,
energy has become an increasingly important input factor in agriculture. This is due
to continuous water scarcity concerns and water conservationist policy measures that
were initiated following the commencement of Australia’s Millennium Drought in
late 1995. Not only was access to water for agriculture significantly curtailed
following the 1995 Murray-Darling Basin Ministerial Council agreement to place
a ‘cap’ on surface water diversion (Murray-Darling Basin Commission 2004), but
further NSW and Federal water reform processes (see above) have reduced the pool
of available water. This has been through the introduction of Water Sharing Plans
and large-scale water entitlement recovery efforts by the Federal Government under
the Water Act 2007 (Cth) and the Murray-Darling Basin Plan 2012 (Cth). As a
consequence of the increasing risk of future water scarcity and the transfer of water
licences from agriculture to the environment, the opportunity to access water for
food and fibre production is diminished. As such, agricultural producers have
considered other measures and structural adjustments to remain financially viable
and productive. In particular, under the Basin Plan 2012 (Cth) and in response to
predicted ongoing water scarcity across the Murray-Darling Basin, the Australian
Government increased its focus on improving water management in the basin. It did
so by investing significantly in long-term initiatives designed to better balance the
water needs of communities, agricultural producers and the environment. This
occurred primarily through the AUD$12.9 billion Water for the Future initiative
(Australian Government 2008). Whilst this initiative contained a suite of urban and
rural policies and programmes, including funding for water purchases, irrigation
modernization, desalination, recycling and storm water capture, AUD$5.8 billion
was allocated against the Sustainable Rural Water Use and Infrastructure Program
(SRWUIP) (Australian Government 2012). The SRWUIP is thereby the largest
component of the Water for the Future initiative and incorporates programmes
such as the NSW Private Irrigation Infrastructure Operators Program and the
On-Farm Irrigation Efficiency Program (OEFIEP) in the southern connected system,
e.g. Murray and Murrumbidgee valley and the Lower Darling (Australian
7 Water Security: Challenges to the Irrigation Water-Energy Nexus in Australia
103
7.8.1 Lack of Integrated Policy Development in NSW
and the Nexus
NSW water and energy regulatory and governance framework is rooted in the
National Competition Policy Reform which was premised on the idea that competitive markets would best serve the interest of consumers and the wider community.
However, the QLD and NSW Governments have since lacked the capacity and
willingness to effectively integrate and harmonise the water-energy-food policy
areas within and across State borders. This lack of coordinated and integrated policy
development has particularly affected food and fibre producers due to significant
energy and water infrastructure investments in NSW. This has caused significant
electricity price increases at the same time as irrigated agriculture has become more
energy intensive. Whilst water is a prerequisite for all food and fibre production,
energy has become an increasingly important input factor in agriculture. This is due
to continuous water scarcity concerns and water conservationist policy measures that
were initiated following the commencement of Australia’s Millennium Drought in
late 1995. Not only was access to water for agriculture significantly curtailed
following the 1995 Murray-Darling Basin Ministerial Council agreement to place
a ‘cap’ on surface water diversion (Murray-Darling Basin Commission 2004), but
further NSW and Federal water reform processes (see above) have reduced the pool
of available water. This has been through the introduction of Water Sharing Plans
and large-scale water entitlement recovery efforts by the Federal Government under
the Water Act 2007 (Cth) and the Murray-Darling Basin Plan 2012 (Cth). As a
consequence of the increasing risk of future water scarcity and the transfer of water
licences from agriculture to the environment, the opportunity to access water for
food and fibre production is diminished. As such, agricultural producers have
considered other measures and structural adjustments to remain financially viable
and productive. In particular, under the Basin Plan 2012 (Cth) and in response to
predicted ongoing water scarcity across the Murray-Darling Basin, the Australian
Government increased its focus on improving water management in the basin. It did
so by investing significantly in long-term initiatives designed to better balance the
water needs of communities, agricultural producers and the environment. This
occurred primarily through the AUD$12.9 billion Water for the Future initiative
(Australian Government 2008). Whilst this initiative contained a suite of urban and
rural policies and programmes, including funding for water purchases, irrigation
modernization, desalination, recycling and storm water capture, AUD$5.8 billion
was allocated against the Sustainable Rural Water Use and Infrastructure Program
(SRWUIP) (Australian Government 2012). The SRWUIP is thereby the largest
component of the Water for the Future initiative and incorporates programmes
such as the NSW Private Irrigation Infrastructure Operators Program and the
On-Farm Irrigation Efficiency Program (OEFIEP) in the southern connected system,
e.g. Murray and Murrumbidgee valley and the Lower Darling (Australian
7 Water Security: Challenges to the Irrigation Water-Energy Nexus in Australia
103