A new chapter begins…

Kate, Rose, Solomon and I are looking forward to the Darwin move immensely.  We hope to get there in time for the kids to start the new school year, although the logistics of a January move are daunting to say the least.  We will advise our new coordinates when we know them, and we hope to see plenty of visitors.

The lack of buy-in to the draft Basin Plan among affected communities is palpable. The feeling that decisions that will affect lives and businesses are being made remotely, without a fine-grained understanding of local impacts or local solutions, is widespread across the Basin. Even among people who accept that the Basin is not a magic pudding, and that decades of over-allocation need to be corrected in the interests of long-term water security and river health, there is a strong perception that the plan is a done deal, that consultation processes are cosmetic, and that legitimate social and equity concerns are not being taken seriously.

The last few weeks have been profoundly disturbing for professionals in water or natural resource management in Australia. The prospect that another critically important reform process may unravel is depressing. The loss of goodwill and the human cost of the current approach has been terrible. It is jeopardising the social capital and broad consensus on sustainable natural resource management (NRM) that has evolved since the advent of landcare in the late 1980s. We have learnt much about NRM and social change in these decades, but these lessons appear to have been ignored in the Basin Plan process.

How could this have been handled differently?

Australia is facing big, long-term, systemic challenges: to decouple economic growth from carbon emissions; to reduce the carbon, water and energy intensity of our economy; to shift to renewable energy; to handle a highly variable climate and more frequent and intense extreme weather events; and to manage population growth and development pressures without trashing or urbanising our best farm lands, carving up our coastline and bush, or further endangering native flora and fauna.

Australia has a unique place in the world’s evolution and thus a grave responsibility for protecting its unique ecosystems. But this cannot be done without informed and committed people.

In the past two decades we have learnt that we won’t be able to meet the challenges of sustainable farming, carbon, water, energy or biodiversity conservation without grassroots community support and engagement. Durable, adaptable, locally-responsive solutions are unlikely to emerge through centralised, command-and-control planning.

As a thought experiment, imagine where we might be now with the draft Basin Plan, if the Rudd government had decided to mark the 20th or 21st anniversary of Bob Hawke’s launch (with bipartisan support) of Landcare, by announcing a major rejuvenation and expansion of Landcare around climate change, carbon literacy, renewable energy, water management, drought resilience and sustainable food systems. This could have been a natural fit with schools programs under the so-called Education Revolution, linked with widespread community engagement through interactive web 2.0 technologies.

Designed around principles of community involvement, adult learning and local development and ownership of local solutions, this could establish an informed and engaged community base for the big national debates around climate, carbon, water, energy and food. I suggested as much in a submission (more than a tad optimistic with hindsight) to the 2020 Summit.

These community-driven approaches could be funded and guided through a complementary consolidation of state and federal investment in a strengthened regional framework of Catchment Management Authorities, with a mandate across water, land and biodiversity, and ideally with local rating powers for catchment improvement works. These bodies provide a critical bridge between government, community and industry. The investment in landcare and regional approaches over the last twenty years has developed and engaged an extraordinary network of committed, switched-on community leaders, with deep local knowledge and connection to place. These local champions have much to offer, particularly working in partnership with regional industry leaders, but they have been increasingly marginalised in the creeping centralism of the last decade. The social capital built up through landcare and regional approaches is a precious national asset, but it is depreciating rapidly through ephemeral funding models that promote short-term competition at the expense of long-term collaboration and capacity.

An alternative approach to the Basin Plan would have been to develop it using regional and more bottom up community involvement, rather than from the top down through a centralist, one-size-fits-all approach.

Catchment authorities, irrigation companies, local governments and community groups could have been engaged from the beginning. Under this approach they would have been provided with key scientific inputs such as the CSIRO estimates of likely water availability for each valley, and assisted with planning that is consistent with the principles agreed by all jurisdictions under the National Water Initiative. Within this planning model based on clear objectives and defined boundary conditions, regional communities and industries could then have been given the opportunity to come up with their own plans for water sharing, and importantly, becoming prepared for managing the environmental water that has been secured through Commonwealth buy-backs.

State, Commonwealth and science agencies could assist the process with technical support from people with real water management expertise, but within existing catchment management frameworks that have been in place in all basin states for the better part of the past twenty years. As Bernard Keane has noted, over-allocation of water by the States, double-counting of surface and groundwater, and tardy development of water markets have been fundamental drivers of the current problem. Nevertheless, officials within State agencies have relevant technical knowledge and long experience that is not being used to its full potential.

Many very committed people within the Murray Darling Basin Authority have worked their hearts out over the last two years on the Basin Plan, and overseeing the many projects that feed into it. They have done the best they can under the circumstances, within a framework approved by the Federal Parliament via the Turnbull bill of 2007 (notably opposed by Tony Windsor) and the almost identical Rudd/Wong Water Act of 2008, and the parameters set by the board of the Authority — for example the critical judgment to aim for an overall reduction of 3,000-4,000 Gigalitres per year in diversions, as opposed to a figure closer to the 7,600Gl/yr which the science suggests is needed to ensure that all valleys reach ‘good’ flow levels. The 3,000Gl figure represents the minimum the Authority considers is required to achieve the environmental objects of the Water Act, and according to the Guide, has “a high dependence on a long-term return to wetter climatic conditions across the Basin.”

Murray Darling Basin Authority staff must feel gutted at the response to their work.

My central concern is that, no matter how many extra people are employed at the Federal level to work on water policy, or how committed and technically proficient they are, the majority of the relevant knowledge for making wise long-term water allocation decisions and translating those into fine-grained, workable local solutions resides in regional communities, industry, NGOs, state agencies and scientific institutions. A process that fails to engage meaningfully — and in many cases disenfranchises — the people with most of the relevant knowledge, is fundamentally unsound.

With the best will in the world, you can’t plan or manage individual valleys, rivers or wetlands from Canberra any better than you can run regional schools or hospitals, or insulate households.

It is a mistake to assume that local community-based processes cannot make tough decisions, as recent examples from the Campaspe and Torumbarry Irrigation districts illustrate. Simon Crean, a very experienced Minister with a long history with Landcare, seems to be looking for a change of approach and more community input, according to the Sunraysia Daily.

A crucial point that has mostly been overlooked in the current ‘debate’, and which the government and the MDBA could have communicated much more effectively from the outset, is that around a third of the reduction in allocations proposed in the guide to the draft basin plan has already been secured through water buy-backs. It is not at all clear in the current process how Commonwealth water purchases are integrated with the Basin Plan. The government has stressed that it will only purchase water from willing sellers. But the community understands very well that some parts of the system work much better than others, and that in some cases it would be better to decommission the least sustainable irrigation infrastructure, accompanied by targeted buy-backs. With strong local leadership and community engagement, the Campaspe and Torumbarry examples show that, provided the price is right, these solutions can be delivered with a high level of local acceptance. The alternative is a ‘Swiss cheese’ approach of reducing allocations at random across the map, potentially affecting the viability of even the best-managed irrigation districts.

Pursuing ‘value for money’ by seeking to buy as much water as possible for a given quantum of funds is superficially attractive and arguably what the taxpayers would expect, given that value for money is a key criterion for Commonwealth procurement. But in the longer run, buying water as cheaply as possible wherever it can be secured is likely to be a false economy. More targeted buy-backs will be more effective, even at higher than market prices (within reason).

As one regional leader told me:
“We have identified areas for targeted buyback to achieve multiple benefits (salinity and infrastructure viability being the primary ancillary benefits) in partnership with the community. The Basin Plan debate is so unsophisticated compared to our community discussions in Northern Victoria over the past few years.”

The other side of water buy-backs is also underdone in the current debate: how best to manage the environmental water that has been bought already, and the thousands of gigalitres that remain to be secured. Irrigators and community groups are understandably keen to see environmental water managed at least as well as irrigation diversions, with transparent and appropriate performance benchmarks and monitoring. Again, a community-based, bottom-up process through catchment and industry partnerships can develop environmental watering plans based on detailed local knowledge of structures, flow patterns and environmental assets. The establishment (under or in partnership with catchment management authorities) of environmental water trusts that are devolved, accountable and knowledgeable of local conditions is worth exploring. Locally-driven environmental watering plans can more easily capture opportunities, better meet local environmental needs, and better manage third-party impacts. Working with landcare and catchment groups, environmental water managers can complement activities such as weed and pest animal control, or revegetation works, to deliver multiple benefits for river health, biodiversity and salinity management. Dry years have seen salinity fall off the radar as watertables have dropped, but the salt remains in the system. Wetter conditions would see it mobilised again.

The centralising trend of the last decade has been accompanied by continued compartmentalisation in policy design and program delivery. Terry Moran noted last year in a speech to the Institute of Public Administration that:
“By and large, I believe the public service gives good advice on incremental policy improvement. Where we fall down is in long-term, transformational thinking; the big picture stuff. We are still more reactive than proactive; more inward than outward looking. We are allergic to risk, sometimes infected by a culture of timidity…

The APS still generates too much policy within single departments and agencies to address challenges that span a range of departments and agencies… We are not good at recruiting creative thinkers. ”
The Australian Government deals with climate, energy, water and food in separate policy silos. Yet at the regional level, the convergence of these issues is all too obvious.
Irrigation companies seeking to save water by converting open, gravity-fed earth channels to pipes and pressurised irrigation systems find their energy consumption trebling or quadrupling, and their escalating carbon emissions placing them in the company of big corporate emitters. At the regional level, there is great scope to take a more holistic approach by integrating opportunities for renewable energy production into irrigation, water supply and water treatment systems, and to look for complementary ways of reducing carbon emissions while restoring landscape amenity and habitat connectivity. Innovation, lateral thinking and local partnerships to deliver multiple outcomes is not facilitated by the centralised Basin Plan.

This is not to assert that regional community and industry leaders, working their way through the complexities of correcting decades of over-allocation, can resolve everything locally. Nor can they institute a carbon price or fix water markets. Inevitably, difficult issues will bubble up that demand resolution by state and federal governments. Moreover, adjustments would be required in merging diverse catchment plans into a coherent whole at the Basin scale.

But I have no doubt that a bottom-up, regionally-owned process could better resolve the bulk of the core tasks of getting water allocation and management back into balance with the actual amount of water in the system, and of managing environmental water for multiple benefits. The overall result would be more robust, the resulting plans would be more durable and more likely to be implemented effectively, and the level of community ownership and acceptance across the Basin would be profoundly deeper and broader. We would be much less likely to see MDBA guides being burnt in the street, or the level of antagonism towards public servants in counter-productive ‘us and them’ public meetings, characterised by mutual suspicion and distress.

The big challenges of climate, water, energy and food are converging and intensifying. They won’t go away. We should be building institutional models that draw on the lessons from twenty years experience of an ambitious policy agenda in natural resource management. Effective, resilient solutions will require national leadership, buttressed by a solid platform of community understanding, engagement and support.

In rural Australia we are lucky to have a solid foundation for such a platform in the remnants of the landcare movement and the regional catchment management framework.

Let’s recommit to it, rejuvenate it, nourish it, use it and trust it.

FOOTNOTE: I joined the Commonwealth government as a senior executive (SES) officer in the environment portfolio in March 1996. As Assistant Secretary, Sustainable Landscapes Branch, water policy comprised one section within my branch — with about 5 staff and taking up less than a quarter of my time. There was also a water branch in the agriculture portfolio which was probably slightly bigger, and the then Murray Darling Basin Commission, which from memory had around 50 people. Now water policy and programs represent three divisions and eleven branches of the environment portfolio (15 SES and around 390 staff), in addition to over 300 people (13 SES) in the Murray Darling Basin Authority and 50 (4 SES) in the National Water Commission.

Over coming decades, this will be a critical determinant of Australia’s food, energy and water security, of the extent to which we can meet any emissions targets, and of the social and economic viability of many rural industries and regional communities.

Last week, the Productivity Commission released its draft report from its inquiry into Rural Research and Development Corporations.  The report recommends the most significant renovation of the rural R&D corporations (RDCs) since they were established by the Hawke Government twenty years ago.

Rural research and development (R&D) in Australia is a $1.5 billion industry.  About one-third of this ($490m in 2008-09) is directly managed by RDCs, and a significantly greater proportion is influenced by RDCs through coordination activities, partnerships and co-investments.

The draft report presents a frank analysis that is comprehensive to the extent that available data allows.

The Productivity Commission endorses public investment in rural R&D and the inherent strength of the RDC model, which it found is highly regarded here and internationally.  Importantly, it concludes that in the main, RDCs are very good at their core business of funding and managing R&D, especially in comparison with alternative funding vehicles (e.g. managing research programs from within policy departments).  The draft report makes sensible recommendations for improvements through data collection, reporting, evaluation, external review and reinstating government-nominated directors on RDC boards.

More controversially, the PC contends that “as the model is currently configured, a significant part of the Government’s funding contribution appears to have supported R&D that primary producers would have had sound financial reasons to fund themselves.”

Consequently, the PC proposes two much more fundamental changes:

i.      A new, government-funded ($50m/yr) RDC with a broad mandate on cross-cutting issues such as land, water and energy;  and

ii.     A reduction in the Government’s funding contribution to the industry-specific RDCs to half its current level over ten years, with a consequent narrowing of their focus to R&D ‘of direct benefit to their levy-payers’.

Of course it is difficult to prove how much research of a given kind would or would not have been funded in the absence of RDC support.  The high benefit:cost ratios often cited for rural research paradoxically make it even more important to be able to justify taxpayer investment (and to prove additionality).  The econometric questions raised by the PC should be essential reading for anyone planning research evaluations.

In my view the PC has got it half right.

The great strength of Australia’s rural R&D model is the government-industry partnership at its core.  The ownership felt by levy-payers towards the outputs of ‘their RDC’ contributes to high levels of industry relevance and consequently research adoption rates.  However the commodity-specific structure of the model is also a weakness when it comes to big, non commodity-specific issues like climate change, carbon, energy, water, land & soil, biodiversity and food systems.  The abolition of the Energy RDC in 1996 and Land & Water Australia in 2009, and the cuts to the non-commodity specific parts of RIRDC in 2009 exacerbated this systemic flaw.

These big cross-cutting issues cannot be addressed effectively by simply urging each commodity to fund more of such work, and to collaborate with other industries in doing so.  They demand specialist research purchasing expertise and knowledge systems, critical mass, and a strategic national approach.  This inquiry has found that the Primary Industries and Energy R&D Act (1989) remains a world-leading framework for funding rural R&D.  So it is appropriate to address these issues by creating a new body under that Act, and to give it the breadth, depth and resources it needs to tackle these issues.  It is then reasonable that each industry RDC focuses on its own industry priorities.

I disagree with the Productivity Commission on one fundamental point however — the contention that public investment through the RDC model should be progressively reduced after five years to a level about $65m/year less than the current $220m.

Firstly, this would risk losing industry support for existing levy streams coming into RDCs.  Secondly, and more importantly in my view, we need to be increasing the overall size of the rural R&D investment cake (including matching public dollars for commodity-based RDCs), not reducing it.

A compelling case can be made for increasing public investment in rural R&D to better position Australian agriculture and natural resource management for the huge challenges of producing substantially more food and fibre in a more difficult climate;  while using less land, water and energy;  emitting less carbon;  and while looking after animal welfare, soil health, biodiversity and landscape amenity.

Climate change, carbon, energy, water and food are intersecting, interdependent issues.  We currently deal with them in policy silos in Canberra, but farmers and regional communities understand these connections as a daily reality.

The Productivity Commission’s comprehensive draft report makes a useful contribution to what seems likely to be a dynamic policy milieu in this Parliamentary term.  It proposes valuable strategic reforms to our rural research infrastructure that would enable much better scientific integration (potentially informing much more ‘joined up’ policy) across the big issues facing rural Australia and the nation.  But its proposition that this can be achieved with less public investment than we make now seems more than a tad optimistic.

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