Campaspe irrigators to permanently exit farming

The Northern Victoria Irrigation Renewal Project (NVIRP) has provided drought-stricken farmers in the Campaspe Irrigation District with options to exit irrigation. At a meeting held by NVIRP in Rochester, 108 of 153 irrigators revealed their intention to permanently exit irrigation, most likely resulting in the closure of the Campaspe Irrigation District.

The small handful of irrigators wishing to continue will be connected to the backbone channel system and landowners will receive domestic and stock water supply.

NVIRP Modernisation Executive Director David Kent said the results of the meeting were not surprising considering the crippling drought faced by farmers on the Campaspe system who had received zero allocations for four out of the past five years:

NVIRP is now able to provide those keen to exit with real options. But we will also support those who want to carry on where possible. NVIRP has encouraged landowners still undecided to seek professional advice from their accountant or solicitor or another professional and has offered a one-off payment of up to $1000.

Irrigators choosing to exit will offer their water shares to the Commonwealth Government, terminate all delivery shares and receive an adjustment payment. Those choosing to remain will need to take part in the NVIRP Connections Program minimising backbone service points and relocating all supply points back to the backbone.

Background Information

The Campaspe irrigation district has received zero per cent water allocation in four of the last five years. Coupled with commodity price downturns, increasing costs to maintain and replace irrigation infrastructure, the viability and sustainability of the district has become questionable. The district is relatively small with about 150 landowners on relatively small blocks. Thirty per cent hold less than 5 ML and 50 per cent hold less than 25 ML of water.

More than $20 million of NVIRP funds were initially earmarked for upgrades in the district. The Campaspe Reference Group was formed in early 2009 as a subcommittee of the NVIRP Modernisation Consultation Committee to investigate water supply and security options in the district. PsiDelta Pty Ltd was engaged to assist the reference group with landowner consultation.

A number of surveys and community meetings were undertaken. The community considered the proposed expenditure within the district and future prices under a climate of low water availability.

The reference group developed a plan for the future of the district with support from NVIRP and the Campaspe community. The plan involved a streamlined system with a supplementary pipeline connection to the Goulburn system. However there were still a large number (30%) of landowners indicating a willingness to exit from irrigation. The community supported the development of the streamlined option coupled with an option to exit. It was considered that this would strengthen the system for water users wishing to continue irrigation albeit a significant number would have to remain for the system to be viable longterm. An exit package was developed by the reference group and NVIRP based around the total funds available. A key assumption was that high reliability water shares would be transferred to the Commonwealth Government. Landowners would also receive a payment for relinquishing delivery share.

The opportunity for landowners to obtain independent professional advice was made available and paid for by NVIRP. More than 70 per cent of landowners have elected to exit irrigation. As reported by ABC News, David Kent from the NVIRP was surprised by the high number of landowners taking up the exit option:

It has been a bit of a suprise to us. When we originally got out there, 30 per cent said they wanted to exit, 30 per cent said they wanted to stay and the others were sitting on the fence at the time. The majority have elected to exit. That's a decision they have made. We now have to facilitate that process and make it all happen.

Importantly, the exiting farmers hold over 90 per cent of the delivery shares allocated within the district. It is now likely that the Campaspe Irrigation District will be completely decommissioned.

NVIRP will work with those that wish to remain to find alternative supply solutions and a number of properties will continue to be irrigated as part of the Rochester Irrigation District or as a diversion customer with a connection direct to the Campaspe River.

Decommissioning the system will save 6 GL of water per year (conveyencing loss).

NVIRP has agreed to carry out the following if all landowners choose to either exit or remain by March 31 2010:

pay adjustment allowances within 30 days of an agreement being signed
facilitate the transfer of high reliability water shares to the Commonwealth Government
engage GMW to manage and undertake the Campaspe Weir remediation works provide farm irrigation design support for landowners who wish to remain in irrigation so that they can develop a connection back to the Waranga Western Channel or Campaspe River
undertake design and construction of a reticulated domestic & stock pipeline

The Campaspe Reference Group, which represents all landowners supplied by the Campaspe Irrigation District, will offer up to 14 GL of water entitlement to the Commonwealth Government. An above average price is expected due to the large volume of water sold in one transaction.