18 Aug 2009

Don't Buy The Farm, Penny

By Ben Eltham
It may be huge and outrageously unsustainable, but nationalising Cubbie Station is not going to solve our water problems, writes Ben Eltham
If you drive seven hours west of Brisbane you get to St George, a pretty, dusty little town on the Balonne River where Senator Barnaby Joyce lives. Drive another hour or so south-west and you reach Dirranbandi, near the NSW border on the vast open floodplains of south-west Queensland. It's big sky country where the horizons shimmer in heat haze and you almost feel that you can see the curvature of the earth.

The main industry out there is not beef or grain, but cotton, and the really big local business is Cubbie Station, an enormous cotton and grain producing property just south-west of Dirranbandi. The scale of Cubbie is vast — so vast, in fact, that you don't have to do much zooming to see its gigantic irrigation plots on the Google Maps satellite image. All up, Cubbie has the capacity to divert 537,000 megalitres of floodplain water and river-flow into vast holding pans, where it is used to grow cotton on a truly industrial scale.

Cubbie was the result of the merger of two big family holdings, of the Brimblecombe and Stevenson families. Under the Chairmanship of former Goss government treasurer, Keith De Lacy, Paul Brimblecombe and John Grabbe built a massive cotton and grain complex throughout the last decade.

Unfortunately for its owners, Cubbie is losing money. In a good year, Cubbie can produce hundreds of thousands of bales of cotton, with some wheat thrown in. But long years of drought have meant the good years have been few and far between. With debt getting harder to finance, the station is now up for sale.

But Cubbie is more than a financial problem — it's a political one, thanks to the massive volumes of water that it takes from one of our most crucial river systems. Sitting at the top of the Murray-Darling Basin, Cubbie draws huge amounts of water from the Balonne and Culgoa Rivers that might otherwise make their way downstream. Partly because Cubbie is so big, and partly because Cubbie enjoys the lucky quirk of being in the irrigator-friendly state of Queensland, the station has become a lightning rod for those critical of the way Australia's farmers and governments manage our precious but dwindling inland water resources.

There's much to be critical of. As the ABC's Sarah Ferguson explained in a fine Four Corners report late last year, entitled "Buying Back the River", Australia's system of water allocation rights for farmers and irrigators is hopelessly compromised. The reason is simple: governments in all states have given out too many water rights. The result was a rights system so unrealistic that few irrigators received their full allocation even in relatively wet years. Now the whole continent is drying, and there's even less water to allocate. It's not coming back, either. Australian rivers are dying and as a country we must collectively make do with less water.

Clearly it's a system with many problems besides Cubbie's enormous water allocation, a system in which Cubbie is merely one of the most outrageous symbols. As Liberal Senator Bill Heffernan (himself a farmer and as knowledgeable on the issue as any Canberra politician) pointed out to Tony Jones on Lateline last night, because of quirks in Queensland water laws, "the licences that are now proposed to be issued will be issued on the basis of the size of the bulldozer used and storages produced by that bulldozer ... there was legislation passed in the Queensland Government so that they were exempt from any environmental planning as long as the storages were kept under five metres in an area, Tony, which has 2.5 metres of evaporation. It was complete craziness."

In fact, it's even worse than Heffernan thinks it is. As noted water expert Mike Young has been saying, there is actually no point in buying up the Cubbie water rights under the current system. "The water licences are not written to take shepherding of water into account because nobody contemplated we would ever have to return water to the environment," he told the Canberra Times' Rosslyn Beeby. In other words, even if Cubbie's water is bought by the Federal Government, the extra water won't flow down the Balonne for very long. It will be captured almost immediately by downstream irrigators.

A big part of the problem is the continuing dysfunction of Australia's federal system of government. It's a problem common to river systems and catchments all over the world, but you would have thought that Australia could at least have managed a common structure and framework for the Murray-Darling by now.

At the moment, the states control the water, and they are a long way from cooperating with either each other, or with Canberra. South Australia, which finds itself in the same position as Iraq, Egypt or Pakistan in being reliant on a major river system whose headwaters are upstream of its borders, is considering launching a High Court challenge against Victoria, whose ridiculously stingy environmental allocations (ie the amount of water not used for irrigation or other purposes) remain locked in for years. Queensland, meanwhile, has been vigorously granting water use allocations despite the cries of downstream states. It's exactly the mess that Kevin Rudd's "cooperative federalism" was meant to sort out, but so far it hasn't.

A bit like climate change, the Rudd Government has chosen to deal with the Murray-Darling irrigation crisis in an incremental way, managing a "politics of transaction" while doing deals on the side. It's a strategy that has so far minimised any political damage to the Government. But it has also meant Rudd and his senior ministers like Penny Wong have been unable to deliver the kind of sweeping reform necessary to fix these really big problems. Climate change and inland water allocation, which are of course interrelated, are both multi-jurisdictional, multi-generational problems which span decades. Fixing a low carbon reduction target or buying back water rights piecemeal simply won't address the scale of these issues.

On this point too, Senator Heffernan said some surprisingly sensible things last night (between rants about vegetarianism in India and human gene patenting). Pointing to growing alarm from world experts on the long-term risks of global food shortages, Heffernan told Jones that "the greatest challenge facing the planet at the present time is the global food task," and pointed out that in Carnarvon in Western Australia, farmers using best-practice root-zone irrigation technology are producing cotton with a fraction of the water that Cubbie is.

But then, most of Australia's bores are uncapped, and many of our irrigation canals are still open channels, exposed to evaporation. The political will required — and the scale of the investment Australia will need to commit — to make our agriculture sustainable is frightening.

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Posted Tuesday, August 18, 2009 - 15:30

I think it is unfair that you criticise the Federal Government. They did change the Murray Darling Basin Commission into the Murray Darling Basin Authority to help improve things.

Posted Tuesday, August 18, 2009 - 16:29

While I understand the frustration of saving the water at Cubbie and seeing it vanish further downstream, I dont agree with the conclusion that there is therefore no point in saving the Cubbie allocation - surely the solution is to take the first step (save it at Cubbie) and then put pressure on taking the next step (save it downstream)? For example, the government could enact legislation to put that allocation into environmental flow, regardless of what shortfalls are occuring further down to allocations. OK, so I know that is too simplistic, but its a huge amount of water that desperately needs to be returned to the river and there must be a way to achieve that goal.

I am not sure why Cubbie is up for sale - I hear its a financial issue, but I cant help but wonder if one reason is that, like all cotton land, the ground has become too poisoned to produce viably. If I were the buyer I would be paying the value of the land as it is, rather than as it was BC (before cotton). Perhaps that makes it very much more affordable?

Posted Tuesday, August 18, 2009 - 17:24

The problem with Cubbie is money, in many more ways than one. Sure the business might be the latest to suffer due to drought, debt and the depressed economy. That's ok...happens a lot in this country. I'm not terribly concerned with the financial trials of millionaires.

A bigger problem is the "invisible" money that changes hands in places like Queensland and Canberra at governmental level...the money millionaires pay to persons unknown to ensure they get what they want. Maybe it's a brown paper bag, (maybe that's a bit unsophisticated in these sophisticated times), or a directorship for the Minister when he/she leaves politics. Perhaps it's a little help buying the next investment property, you know, preferred customer status and all that. There's a myriad of ways a fellow of like mind can be helped without making a public fuss.

And that's the main reason I object to the sale of publicly owned utilities like roads, telephone infrastructure, railways, and hey, water. There is no way of ensuring the transparency of all aspects of such deals.

So now we're in the situation of maybe buying a multimillion dollar property for the water rights a government of earlier times sold to a private company for the purpose of making large profits. A bit like the sale of the Victorian freight rail network or the public millions spent every week topping up the toll road operators in Sydney.

Personally I think we should buy Cubbie or better still resume the ridiculous cotton growing water rights and let them sell their station without. Problems such as the existing legislation can be changed. Ownership of water rights by the states can be changed. People's homes can be resumed when the next freeway is deemed to be in the public interest...anything can be changed. It's really only a question of money and the will to act.

Will someone, anyone, who is prepared to genuinely act in the public interest please step forward? They'd be in government for decades.

Posted Tuesday, August 18, 2009 - 17:32

It doesn't matter what people say they'll do with allocation - at the moment nothing will improve for either irrigators or the environment. Simply put - the transactions and water buybacks are all "on paper" trades.

No rain = no water = no difference. Australian rivers dry up in drought and have done forever, and no amount of desire or policy can change that.

Saving the water on Cubbie would require huge infrastructure spending - water evaporates way too fast from such massive shallow storages. Those downstream open channels are not the answer either (evap again). And certainly putting everything into enviro flows is simply not realistic while ever many, many communities are dependent, both directly and indirectly, on the agriculture from irrigation. And don't think just cotton - think citrus, rice, grapes, dairy... And of course Cubbie still has land and water tied together - so who wants to be saddled with all that (currently) unproductive land for the sake of the water licences?

Psst...wanna buy a paddock...a REALLY BIG paddock...

Posted Tuesday, August 18, 2009 - 17:47

It's worth buying Cubbie to right old wrongs, but Ben is right - it won't solve the water problem. Queensland's Minister for Water is another problem and I suspect he's already been bought, but not by the federal government.

For Mike Young to claim that they never expected water to be bought back for the environment ranks along with "we didn't expect the drought" and "giving the sleepers and dozers free water rights won't stuff up an already over-allocated market". It was obvious to anyone who knew the basin, its climate and management but not those who designed the water market for a beautiful theory.

Posted Wednesday, August 19, 2009 - 09:10

Is the idea of government buying Cubbie at market rates just another way of rewarding the current owners for their part in destroying the Darling River with more public funds. I mean assume the taxpayer picks up the bill, it (the taxpayer, the public) gets nothing much more than a failed cotton farm. Over allocation of water rights everywhere means that none of the water released by Cubbie will make it to SA. On the other side of the ledger, the owners of Cubbie walk away with a fat little Government cheque to go and spend elsewhere, possibly building more Cubbies in the future.

Its common to use Cubbie as the prime example of what's wrong with the Murray Darling but buying it wont fix all the other stupidly greedy over allocations everywhere else in the basin. In fact its doubtful that any government will ever have the political will to address hundreds of years of completely inappropriate land and water use that has placed the country west of the divide in the current precarious situation. All of the debate is just a smokescreen for hiding the obvious fact that we messed up big time so lets put it in the too hard basket and move on. We might be better off putting the money into better protecting the agriculture of the future (east of the divide) than trying vainly to fix the legacy of our own stupidity.

Syd Walker
Posted Wednesday, August 19, 2009 - 09:24

Demise of the Murray Darling basin was foreseeable and it was foreseen.

The value of this property should not include water 'rights' that were never based on a coherent, ecologically-rational overall management policy. Excessive, ecologically-irresponsible water allocations should not carry forward to new owners.

These owners took a business risk. They gambled that they'd be able to carry on wasting water on a massive scale, to the detriment of the community's overall interests. They gambled they be able to sell the property, at the time of their choosing, as a going concern based on solid foundations... They gambled - and they lost, at least on this occasion. There's a cost associated with losing a business gamble. In this case, it's a greatly reduced sale price.

Tough luck guys - and a useful warning to others not to bet against the public interest.

If Penny Wong arranges a public bail-out for the owners, so they get the price they think the property is worth (which is based on an impossible, wholly unacceptable future business plan), it will be a rort comparable to the US/UK bankers bailout - or the Rudd Government's proposed $16 billion free emission permit give-aways to the biggest polluters.

Stephen Pickells
Posted Wednesday, August 19, 2009 - 10:46

I don't know anything about water allocation so I can't really comment on that, but what I'll never understand is how anybody could have thought it was a good idea to grow cotton in Australia, which was beset by droughts long before the threat of global warming (just ask Dorothea McKellar). Hemp is a more sustainable crop and makes a perfectly good fabric. The by-products would have practical pharmaceutical applications. If the Cubbie cotton plantation is no longer viable, then the proprietors can suck eggs as far as I'm concerned. If the soil is so toxic that it's unusable for commercial agriculture, then the land should be sold off for what it's worth. It could be used for solar power cells and wind turbines. Wouldn't that be grand? The generated energy could be used to process local waste water and effluent (gravity-fed to the plant) to a safe level, which would be dumped back into the river for the benefit of more sustainable farming practice downstream. I'm getting all warm and fuzzy just thinking about it.

Posted Wednesday, August 19, 2009 - 11:23

Stephen Pickells, I 'm with you! Grow hemp , NOT cotton. Do NOT buy Cubbie, nationalize it, and right some terrible wrongs from the past and probably into the future. Turn Cubbie into a gigantic Solar Farm.

I reckon the Cubbie (and other properties in the area) owners can see the writing on the wall, Global Warming taking total hold on water from the skies, SOIL TOTALLY STUFFED, and are getting out while they can, and see some chance of the Fed. Labor Govt. being suckered into paying their ridiculous and exorbitant price.

Only thing, getting anything past the present owners who are Qld. Labor 'mates', and in the Senate, a very red-faced and blustering Barnarby Joyce, who just LOVES Cotton Growing Cubbie!

Jonah Bones
Posted Wednesday, August 19, 2009 - 13:00

The paradigm shift would be to recognize that the past 200 years have been disastrous . The original inhabitants maintained a sophisticated culture on this continent for thousands of years , which certainly highlights our dismal failure to adapt to the environment.
Structural change is necessary , traditional state structures do not work , political expediency results in representation for the majority of urban dwellers and marginalization of other interests. A division of the country into states representing major urban centres and then rural areas broken into major catchment areas would go a long way to bringing a balance to the situation , the whole Murray Darling catchment would be geographically huge , and the combined votes significant .
Hopefully with political empowerment would come joint effort to remediate the damage we have caused.
We are currently in disagreement with our planet , which would prefer our extinction, decisive action is necessary.

Posted Wednesday, August 19, 2009 - 18:05

iand Frankly these responses are depressing. The owners of Cubby are not criminals. They engaged in approved practices with the reasonable objective of trying to grow products the world needs. They did so when they were permitted to by the relevant authorities. If circumstances change I don't see why they should be treated as pariahs.
A matter which should be recognised by subscribers to journals such as these, is that of destruction of social fabric. Brumby's approach to this issue is absolutely correct!. If several waterholders are bought out of a particular irrifgation scheme, it leaves the remainder of the licence holders unviable.This is the stuff leading to school closures, loss of other amenities etc.
I have proposed, instead, an acquisition of an equal proportion of EVERYONE'S ENTITLEMENT. In this manner the objective of reducing over allocations could be equitably achieved without disastrous results

Posted Wednesday, August 19, 2009 - 18:29

@David_H - "We might be better off putting the money into better protecting the agriculture of the future (east of the divide) than trying vainly to fix the legacy of our own stupidity."

Do you know any people living along the eastern seaboard who'd give up their homes for food production? Concrete slabs, brick'n'tile homes, freeways, rail lines, corporate headquarters etc... I ask because much of the BEST agricultural land in the country is currently under housing estates, cities and infrastructure. Some of the best alluvial soils are covered in bitumen and concrete. There's a reason big agriculture is where it is - no choice.

I know that sounds a bit simplistic and it probably is, but it also highlights another stupid decision of the past - building cities/urban centres & allowing continuing subdivision over the most productive land with some of the more reliable rainfall.

There are no easy solutions, and saying agriculture only has a future east of the divide is not really one of them - not in a country where east-of-the-divide population is growing strongly and food/fibre production is being pushed out more and more.

Posted Wednesday, August 19, 2009 - 18:29

@David_H - "We might be better off putting the money into better protecting the agriculture of the future (east of the divide) than trying vainly to fix the legacy of our own stupidity."

Do you know any people living along the eastern seaboard who'd give up their homes for food production? Concrete slabs, brick'n'tile homes, freeways, rail lines, corporate headquarters etc... I ask because much of the BEST agricultural land in the country is currently under housing estates, cities and infrastructure. Some of the best alluvial soils are covered in bitumen and concrete. There's a reason big agriculture is where it is - no choice.

I know that sounds a bit simplistic and it probably is, but it also highlights another stupid decision of the past - building cities/urban centres & allowing continuing subdivision over the most productive land with some of the more reliable rainfall.

There are no easy solutions, and saying agriculture only has a future east of the divide is not really one of them - not in a country where east-of-the-divide population is growing strongly and food/fibre production is being pushed out more and more.

Posted Thursday, August 20, 2009 - 10:42

We are still building over excellent farmland in Melbourne, and will regret that in years to come, along with standing by and watching the Murray die.
I agree the owners of Cubbie have not been found to be criminal in their business dealings - nor have the various government and statutory bodies that were complicit in Cubbies business dealings. But you can do a lot of harm without doing it illegally, and moral integrity is more relevant than legal obligation to controlling your ambitions and greed. Cubbie (and the system that supported them) is a textbook example of what is morally wrong with our attitude to the environment. They negotiated an obscene and excessive water allocation (much of which evaporates) to the point where their allocation is a significant factor in the death of a huge river system and creation of poison soils in SA. They refused to share that water or make any adaptation to the changes brought about from extreme, prolonged drought. They grew cotton using monocrop systems which are known to strip and poison soil to the point where it became unusable for agriculture and unsafe for homes - and (based on history) intend to go elsewhere and do the same thing all over again. They now arrogantly expect to be compensated for the loss of what they have killed and want someone to buy the land they have poisoned and rehabilitate it because they dont feel inclined to meet that moral obligation themselves. They are totally within their rights legally and they are morally corrupt. They are not the only ones - far from it - but they are a very visible example.
Every business that takes water from a river knowing it is in excess of what the river can give and still remain healthy is doing something that is morally wrong. I realise that means schools might close or businesses fail - but the economy isnt sacred, whatever might be touted to the contrary. We dont have the right to put economic interests (jobs, schools, businesses) ahead of long term sustainability. And it is even stupid and shortsighted to do so. What will happen to the schools and jobs when the river is dead and no one can live there? Isnt it our primary job as responsible citizens to look ahead 50 years or 200 years instead of to the next years balance sheet?
We will not fix the problems we have created for our earth until meeting the earths needs becomes the primary default position from which negotiations commence. Currently, the default position seems to be "economic growth at all cost or at the very least, no significant economic pain". I cant understand a logic that says its more important to protect Cubbies right to make money than it is to protect the city of Adelaides water supply.

Posted Thursday, August 20, 2009 - 11:00

Why haven't we been growing hemp for years? Because it has the misfortune to be a drug plant, even though varieties can be grown that don't contain hashish.
Innovative thinking is certainly what is required. But will we get it?

Posted Friday, August 21, 2009 - 18:36

The answer, unfortunately, salmander, is NO!

So far one thing missing quite obviously from any of the Krudd Govt. thinking is anything outside the Business As Usual criteria.

Did we really have an election and get rid of JWHoward????? I do wonder!

Gerry Mander
Posted Saturday, August 22, 2009 - 17:48

Why is there such a fuss about Cubbie when our government is actively promoting an ETS based on trees? They have recently been digging up the dumps around Sydney and finding heaps of old newspapers from the 1930's, proving (to their minds, at least) that paper is a carbon sink and this justifies such monstrosities as pulp mills and the current Forestry practice of denuding the landscape of Old Growth and substituting plantations.
Surely cotton is an even greater carbon sink and should adequately qualify for huge subsidies under the new ETS scheme. A trip round any Op shop will confirm this with row upon row of old-fshioned carbon-rich clothes. Not only that, despite drying up the Murray Darling, cotton plants use far less water than e.nitens, the favoured plantation tree. If we can't support a few acres of these beneficial cotton plants, how the hell are we going to support 37 million hectares of plantations?
All it needs is a bit of foresight, a lot of lobbying and heaps of --- MONEY!
Will it save the environment? Silly question. This is economics!

Gerry Mander

Posted Saturday, August 22, 2009 - 20:57

"On this point too, Senator Heffernan said some surprisingly sensible things last night........."


I have heard Bill Heffernan speak on water/agriculture on several occasions in Parliament and he always makes sense on the subject.

This is such a critical issue. Why not research his stated views and ask for an explanatory interview. "The way to go on water according to the Senator"

Stephen Pickells
Posted Sunday, August 23, 2009 - 14:28

Yeah, they could put it on the Bill and Ben Show. The senator could also be asked what he really thinks of homosexuals.
According to a press release, Anti-Discrimination Campaigner Gary Burns is considering lodging a complaint with the NSW Anti-Discrimination Board against Senator Bill Heffernan over his alleged comment to a protester in The Great Hall of Parliament, "I don't mind gay people, I just want you to stop f---ing the kids".

Syd Walker
Posted Monday, August 24, 2009 - 10:55

Gerry Mander is dangerous.

Either Gerry is already working for Penny Wong - or about to be snapped up as part of her team.

In Dickens' era, people like like Gerry were called evil geniuses. These days, they advise government on 'environmental policy'.

Incidentally, if this gets up, what a tremendous boost for the rag trade!

I can see the billboards now... "Go green - buy more shirts!"

Even anti-consumers like me may do OK. I shall demand tradeable carbon credits for my old socks.

Posted Tuesday, September 1, 2009 - 14:24

don't know much about water rights, but why let the water drain to the ocean? is it not better to keep as much of the water as possible on the land to grow food or make the land productive, instead of letting the water flow to the ocean? there must be reason why there is a water cycle on Earth?