an already challenging operating environment. For agricultural producers this means
being continually confronted by competing and often conflicting policy objectives.
As the authors discussed in the case studies of this chapter, agricultural producers are
facing a multitude of ‘natural’ challenges, including climate change, above-average
temperatures, extended dry periods (including prolonged droughts) and lower water
availability (Khan et al. 2006). Whilst many are adjusting their on-farm practices,
others are asking themselves whether to plant at all.
Since the development of Australia’s water market, options exist for Australian
agricultural producers to trade parts or all of their water entitlements/shares as well as
allocations. This allows the agricultural producer to recoup some of their on-farm
fixed costs during years where they do not produce a crop (or downscale on
production). Whether or not the fundamental market structure or the rules governing
water trade could be improved to assist agricultural producers to more effectively
engage in trading has not been fully answered. However, the authors are of the view
that the topic warrants further investigation, particularly in the context of State-based
water allocation regimes, the operations of State-owned water storages and the rules
governing river operations. On the other hand, once agricultural producers have
committed to a crop, the burden of ever-increasing input costs – including
electricity – weigh heavily on food and fibre producers who often see their profit
margins diminished by expedited policy changes (e.g. climate change policy) and
regulatory adjustments (e.g. electricity tariff changes). As the recent water reform
under the Water Act 2007 (Cth) and Basin Plan 2012 (Cth) has highlighted, wellintended water efficiency programmes (e.g. upgrades in irrigation equipment to
reduce water use dependency) are being undermined by parallel regulatory changes
in the electricity sector. These have exponentially increased the cost of operating the
newly installed on-farm water efficient irrigation equipment. Without deliberate
action to resolve the ‘water efficiency’ and ‘energy intensity’ trade-off in
Australian agriculture, the likelihood of perverse and wasteful outcomes will
increase. Already, food and fibre producers are actively considering the removal of
their previously installed water efficient irrigation equipment to avoid further electricity cost increases. Others are contemplating to switch from electricity to diesel as
an alternative energy source. Both developments are deeply concerning; particularly
if they are evaluated in the context of climate change and future water scarcity.
However, there is a distinct lack of alternative options available to agricultural
producers to overcome these multitudes of challenges. Whilst recent technological
advances in renewable energy generation, energy storage systems and automation
show promising results, the fear of further policy reversals leads agricultural producers to often be cautious about making further large-scale and costly changes on
farm. Consequently, the agricultural sector is vulnerable to both ‘natural’ risk
(e.g. climate change, temperature changes, water availability) and ‘man-made’
risks arising from conflicting policy development that, at times, appear ‘resistant to
resolution’ (Briggs 2007). In this sense, the water-energy-food nexus resembles a
‘wicked problem’ (Rittel and Webber 1973) at multiple scales. If policymakers are
committed to solving complex water-energy-food challenges for Australian agriculture, there needs to be further discussions as to how enduring, long-term coordinated
108
S. Schulte et al.
being continually confronted by competing and often conflicting policy objectives.
As the authors discussed in the case studies of this chapter, agricultural producers are
facing a multitude of ‘natural’ challenges, including climate change, above-average
temperatures, extended dry periods (including prolonged droughts) and lower water
availability (Khan et al. 2006). Whilst many are adjusting their on-farm practices,
others are asking themselves whether to plant at all.
Since the development of Australia’s water market, options exist for Australian
agricultural producers to trade parts or all of their water entitlements/shares as well as
allocations. This allows the agricultural producer to recoup some of their on-farm
fixed costs during years where they do not produce a crop (or downscale on
production). Whether or not the fundamental market structure or the rules governing
water trade could be improved to assist agricultural producers to more effectively
engage in trading has not been fully answered. However, the authors are of the view
that the topic warrants further investigation, particularly in the context of State-based
water allocation regimes, the operations of State-owned water storages and the rules
governing river operations. On the other hand, once agricultural producers have
committed to a crop, the burden of ever-increasing input costs – including
electricity – weigh heavily on food and fibre producers who often see their profit
margins diminished by expedited policy changes (e.g. climate change policy) and
regulatory adjustments (e.g. electricity tariff changes). As the recent water reform
under the Water Act 2007 (Cth) and Basin Plan 2012 (Cth) has highlighted, wellintended water efficiency programmes (e.g. upgrades in irrigation equipment to
reduce water use dependency) are being undermined by parallel regulatory changes
in the electricity sector. These have exponentially increased the cost of operating the
newly installed on-farm water efficient irrigation equipment. Without deliberate
action to resolve the ‘water efficiency’ and ‘energy intensity’ trade-off in
Australian agriculture, the likelihood of perverse and wasteful outcomes will
increase. Already, food and fibre producers are actively considering the removal of
their previously installed water efficient irrigation equipment to avoid further electricity cost increases. Others are contemplating to switch from electricity to diesel as
an alternative energy source. Both developments are deeply concerning; particularly
if they are evaluated in the context of climate change and future water scarcity.
However, there is a distinct lack of alternative options available to agricultural
producers to overcome these multitudes of challenges. Whilst recent technological
advances in renewable energy generation, energy storage systems and automation
show promising results, the fear of further policy reversals leads agricultural producers to often be cautious about making further large-scale and costly changes on
farm. Consequently, the agricultural sector is vulnerable to both ‘natural’ risk
(e.g. climate change, temperature changes, water availability) and ‘man-made’
risks arising from conflicting policy development that, at times, appear ‘resistant to
resolution’ (Briggs 2007). In this sense, the water-energy-food nexus resembles a
‘wicked problem’ (Rittel and Webber 1973) at multiple scales. If policymakers are
committed to solving complex water-energy-food challenges for Australian agriculture, there needs to be further discussions as to how enduring, long-term coordinated
108
S. Schulte et al.