'Concern over the demand for water below the Barmah Choke' | Victorian Country Hour interview with Chris Olszak

'Concern over the demand for water below the Barmah Choke' | Victorian Country Hour interview with Chris Olszak

Aither Director Chris Olszak spoke yesterday with Clint Jasper on ABC News’ Victorian Country Hour regarding concern over the demand for water below the Barmah Choke. Watch the video above for the full interview or read the transcript below.

You can listen to the full episode on the ABC website here.

Nikolai Beilharz: There’s increasing concern about the growing demand for water below the narrow Barmah Choke the tightest section of river on the Murray.

Last year the consultancy group Aither found there may not be enough water available to meet the growing demand below the Choke. Clint Jasper spoke with Aither Director Chris Olszak about this year’s study, which included improved data from state governments.

Chris Olszak: Based on water use in 2018-19, which is a pretty dry year, in the Lower Murray we have estimated about 1120 gigalitres of water used by permanent horticulture in the Lower Murray; that includes some water use in vegetables in the Victorian and New South Wales Lower Murray area. There was enough supply to meet that in 2018-19.

But, if we were to go back to the worst of the millennium drought when some of the high-reliability water entitlements weren’t receiving their full allocation, and we were to just look at the Lower Murray region below the Barmah Choke, there’s only about 500 gigalitres allocated to water entitlements in that very extreme year below the Choke on the Murray. There’s already a significant shortfall if we were to see those types of conditions again.

Clint Jasper: So what is the worst case scenario here? If we have that really dry year and the maturing of what’s in the ground now plus what’s already at full maturity below the Choke?

Chris Olszak: What we’re seeing in the Lower Murray is that there’s actually a lot of trees that have been planted and aren’t yet at full maturity.

We’ve just focused on the almonds, which is the big one, and we’ve got a really good profile now of the age of almonds and they take about 7 years to reach maturity. Compared to that 1120 gigalitres of use in 2018-19 there’s about another 125 gigalitres of water demand from almonds just from those trees that are already in the ground and maturing. That would bring us to around about 1250 at full maturity and then we’ve identified a number of potential new developments which are almond, citrus, grapes and other things that could bring that Lower Murray demand up to over 1,400 gigs (gigalitres) at full maturity.

So obviously there, in that extreme dry year and even in dry years and average years in the Lower Murray, that’s going to put a lot of pressure on the water available within that system. A lot of demands carryover, to insure against that and a lot of demand for moving water out of the Goulburn and above the choke and from the Murrumbidgee, if that happens.

And the big question is, whether that will happen and where the water will come from. It will definitely come from other users. We are not talking about creating new water here. It has to be bought on the market from other users.

Clint Jasper: Under a situation like that, where everything is matured and there is huge demand for water, what are the implications price wise for people growing those annual crops when there’s all this demand in dry years?

Chris Olszak: Yeah, so I think we have already seen over the last couple of years there’s some fundamental changes in demand and its not just the horticulture, its cotton in the Murrumbidgee, irrigators getting more efficient more generally – that prices are going up anyway.

So this will just continue that trend of these fundamental shifts in demand that are pushing prices higher in the water allocation market. And that combines with less water available across the consumptive pool as a result of the water recovery efforts that have shifted water from the consumptive irrigator pool for the environment.

So, it’s both reduced supply to irrigators and increased demand that’s occurred over the last 5 to 10 years that is putting upward pressure on prices.

Clint Jasper: We’ve seen especially over the past few years some of the tensions that rise when this situation is playing out and people are watching the choke get run really hard to deliver that water downstream the Victorian government’s move to limit new developments below the choke has there been any kind of other response to this growing demand below the Barmah Choke.

Chris Olszak: Look I know there has been a lot of discussions at the Ministerial Council around this challenge and there’s two issues here. One is about the total water availability and whether these new developments have got enough water whether they’re informed enough to make good decisions about their investments and where that risk lies. There is a separate question around whether the water can actually be delivered, and that’s something that the governments and the MDBA are working on pretty intensively.

Clint Jasper: When you hear that there is this shortfall in those dry years does it imply that there’s actually a limit on how much horticulture should be developed below the choke if the water can’t actually make it down there.

Chris Olszak: Look I think there will be a limit. Some may argue that this pushes us up or beyond that limit but what we do see over time is that there will be some adjustment. So there will be and there’s always been different horticultural industries that have more or less profitable years or better or worse commodity prices and some of that may come off to effectively make room for some of the new developments.

Nikolai Beilharz: That’s Chris Olszak, Director of consultancy Aither, he’s speaking with Clint Jasper.