SA, Water, water markets

Water For Fodder

8 November 2019

The Department have progressively released more data on the program. There is a map showing the distribution of the applicants (4,185) by state. The successful applicants were evenly distributed.

There is also a table showing the breakdown by trading zone. At a macro level;

  • 3,000ML into the Murrumbidgee
  • 13,050ML into Murray above the choke
  • 14,600ML in Goulburn (inc Loddon and Campaspe)
  • 9,350 into Murray below choke

These numbers aren’t too far from an estimate put out on 13 December on Twitter.

Successful applicants have been given 30 days to complete the necessary paperwork and make their payment. We anticipate, given the holiday period, that some transfers will start occurring early January, but the majority will be done during February.

With the choke and both IVT’s effectively closed, the transfer of this water to successful applicants will have a significant impact on the broader market. Water availability below choke will increase by ~30GL (of non Water For Fodder allocation) as water owners capitalise on the current price spread – over $200/ML when looking at the Goulburn.

Check out our pages for the Goulburn and Murrumbidgee IVTs for more information.

Thursday 12 December

An email was sent out at 10:18am stating;

Round 1 of the Water for Fodder program has attracted a large number of applications, the program is now oversubscribed.

You have until 10am AEDT 13 December 2019 to submit your application using the electronic form on the Water for Fodder program website

This would indicate the 40GL threshold hadn’t been met by 10am 12 December. Does this mean everyone who applied in the last 24 hours is provisionally accepted?

Any applications received between 10am 12 December and 10am 13 December will be run through a ballot according to the guidelines.

Wednesday 11 December

Applications opened at 10am (well actually about 10:10am). There were no issues with the system.

Additional information along with detailed guidelines and sample questions were posted on the web site in the week proceeding the opening of applications. This gave potential applicants sufficient time to get the relevant information together before applying.

Sunday 1 December

Sussan Ley posted on Twitter announcing the guidelines for the Water for Fodder program were available. It is known as the Water For Fodder program.

Some quick information;

  • 40GL to be made available in 2019-20
  • Potentially 60GL to be available in 2020-21
  • Applications must be for 50ML (total of 800 applications to distribute 40GL)
  • A maximum of 2 applications if you have multiple accounts
  • Must not have 1GL from allocations/carryover in the account
  • Applications will be date/time stamped and processed by ballot
  • Need to complete a deed poll

Thursday 8 November

Thursday 8 November saw many big announcements from the Federal Government regarding drought funding. The biggest affecting the irrigation community being the announcement that the Commonwealth will pay the SA Government $98M to turn on its desalination plant.

The fresh water created by the desal plant will be used to supply Adelaide with potable water and therefore reduce it’s 100GL of demand from the Murray River. This “saving” will then be provided to irrigators “below market rates” to grow fodder through a “subscription scheme”.

Little detail was known about how irrigators could access the water, how much it would cost, whether it was only to grow fodder for your own livestock and exactly how it would be implemented and managed. Even NFF Fiona Simson didn’t know the detail.

Naturally this announcement will have implications for the water market – it is consequential to all water users, not just those growing fodder. As a result, the market needs details quickly. How will the water be distributed? How will water use be monitored? In which systems will the water be made available?

Until we see more detail – surely they can publish some basic details – market participants can only theorise about what they should do.

Tuesday 12 November

Sussan Ley was on ABC Radio putting some clarity around the 100GL. According to the radio interview;

  • Volume will be a minimum of 25ML and a maximum of 100ML
  • Guidelines should be published by the end of this week
  • Water will be distributed through an Expression Of Interest

Sources

https://www.agriculture.gov.au/water/mdb/programs/basin-wide/water-for-fodder

https://premier.sa.gov.au/news/sa-comes-to-the-aid-of-drought-affected-farmers

https://www.abc.net.au/radionational/programs/breakfast/drought-strategy-to-include-super-cheap-loan-offers/11680054

https://www.abc.net.au/news/2019-11-07/drought-stimulus-sa-desalination-plant-murray-river-water-farms/11679136

https://www.theland.com.au/story/6481040/canberra-gives-100m-to-grow-drought-fodder-but-will-it-work/?src=rss

https://www.theaustralian.com.au/nation/politics/jail-city-water-barons-accc-mildura-forum-told/news-story/1ed5bd36790accfc5da9ca689c6a3d3a

https://www.abc.net.au/news/rural/2019-11-09/fodder-industry-reaction-to-government-announcement/11688632