WHERE HAVE ALL THE PEOPLE GONE?
In the last week or so the shut- down of the milk processing plants at Kiewa and Rochester has started. The blame game is in full swing particularly on social media. We’ve seen the processors cite a lack of milk supply and increasing costs of production. Unfortunately we have also seen the blame thrown at the workers for high wages, wages that have been a result of awards set in a regulated wage market as opposed to a de-regulated dairy industry. The reality is that the wages are not ridiculously high but rather that the returns at the farm-gate have been left ridiculously behind.
If we take a look at the regions where these plant closures are happening we can see a reason why rather than being a result of the most recent dairy crisis there is a bigger underlying cause. Competition for either land or water resources in these areas has impacted heavily on the ability to farm. In the North-East of the state the number of dairy farms has been declining for many years, expansion of existing farms is partly limited by the topography of the area but more so by increasing land values due to the reliable rainfall, water supply and natural beauty making it a sought after location for lifestyle properties. The Rochester plant is in the heart of the Goulburn Valley impacted by the MDBP and its disastrous removal of irrigation water. Some years ago we saw the Leitchville plant close and now as supply falls further again the Rochester plant. Several years ago the local member for Murray quoted that the number of dairy farms in the electorate had halved since 2005, a decline which has continued in recent years. Yes without milk going through these plants they are unprofitable, that is the underlying problem not high wages. In the remaining plants ask yourself are wages going to be cut? Processors are restructuring their businesses to adapt to the de-regulated marketplace and access to supply and freight routes. As more and more of the Australian dairy production are consumed domestically processors are concentrating on the lucrative domestic market and positioning themselves strategically for that. With increasing volumes of southern produced milk being transported to northern states we have seen a new transport facility established at Strathmerton in close proximity to two existing dairy plants.
The flow on effects of these plant closures to local communities and businesses will be devastating. Not only will the loss of wages impact local communities but as people move away from the region in search of work we will see falling property values as well as the wider outcomes over a wide range of community services and activities ranging from schools and health services to local sporting groups.
Is this an accident or part of the plan? As population continues to grow Government is faced with growing demand for land and water supply among other things. Using the Ramsar agreement to bypass our constitutional rights to water to create the Water Act was part of the strategy by government to achieve their needs. Unbundling of water from the land created a number of problems for sustainable agriculture in these regions as well as making life a lot easier for Local government and water authorities to access water supply for their growing communities without the need for infrastructure spending on building new water supplies and the associated problems of dealing with environmentalists. Water that was once preserved for economic sustainability in food production in these regions is now available to ever growing towns and cities to be sold to the “highest value end user” to quote an often used term. Not only can high value horticultural crops outbid the local water users so can water supply authorities. The North- South pipe isn’t plugged, merely unused with three Melbourne based water authorities holding water supply in Eildon Dam for either use in their areas if need be or to speculate on the water market. Ballarat and Bendigo have access to the system along with the new Wimmera pipeline. The proposed pipeline from Mildura to Broken Hill will further draw on water formerly used to support our irrigation communities.
What are the State and Federal Government’s doing? Nothing to support this region. They continue to forge ahead with the implementation of the MDBP that’s sole purpose is to remove at least 2,750 gigalitres of water from the MDB. The recent Four Corners program was looking at the theft of 1 gigalitre of water to put that into some perspective. What else is government doing? Moving ahead with plans to develop new irrigation projects in Northern Australia that have a number of issues with climate and soil types that are not an issue in our existing area. Why then are they doing this? In an attempt to deal with the growing population and supplying its needs as cheaply as possible where it is rather than taking a holistic approach. Using foreign investors to help finance the development in northern Australia rather than making the tough decisions themselves.
The first step is to “can the plan” and adopt the recommendations made to the Senate Inquiry several years ago now that will return the life giving water to the regions for productive and environmental outcomes for the region.