Ag Energy Council axed

The former LNP government announced the Agricultural Energy Council (AEC) in December last year, heralding it as a direct line to Queensland cabinet to tackle concerns over crippling farm power prices.

But with little fanfare or official announcement, the current Queensland Government has ditched the new body, instead opting for a Queensland Productivity Commission to investigate electricity prices.

The Council was to be made up of high profile representatives from key agriculture groups including the Department of Agriculture, Fisheries and Forestry (DAFF), the Department of Energy and Water Supply, AgForce, the Queensland Farmers’ Federation (QFF) and other groups such as the Queensland Dairyfarmers Organisation, Growcom and Canegrowers.

Issues slated to be addressed included metering, the development of energy efficiency initiatives and financing; tariff reform; opportunities that may arise from future competition in the electricity market; the potential for renewable energy; and participation in the national regulatory process.

The closest the new body ever got to meeting was at the launch in Bundaberg last year where former agriculture minister John McVeigh and former energy minister Mark McArdle signed a Memorandum of Understanding between the government, QFF and AgForce.

Current Queensland Energy Minister Mark Bailey told Queensland Country Life that the AEC never even met and therefore achieved nothing to address agricultural sector concerns about the cost of electricity.

“The new Palaszczuk Labor Government has committed to a Queensland Productivity Commission and its first task will be to conduct a public inquiry into electricity pricing to investigate short and long-term options,” Mr Bailey said.

“This will include investigating electricity prices for agricultural producers.

“Following this initial inquiry, the commission will investigate other important economic issues, which may include efficiency in water pricing, along with options to restructure existing water entities to drive efficiencies and lower management costs.

“Our commitment to Queensland’s agricultural sector is rock solid.”

Despite the cessation of the AEC, the Minister confirmed the planned energy audits on a range of agricultural businesses as part of the Energy Savers Plus Program will go ahead.

The audits will look at each farm’s energy use and efficiency, particularly regarding high energy use infrastructure such as pumps, irrigation equipment, controlled environments and other farm infrastructure across a broad cross-section of commodities.

Growcom said the decision to close the AEC had caused disquiet.

“The Queensland Competition Authority (QCA) in May last year announced its final determination on electricity tariffs for 2014/2015 which foreshadowed an increase for most farm electricity tariffs of 15 per cent (10 per cent after the axing of the carbon price scheme), a large impost on one of production horticulture’s key inputs,” Growcom CEO Alex Livingstone said.

“The increase particularly affected production horticulture which relies on electricity to power irrigation to produce a quality crop and to power cold storage facilities to enable the harvested crop to be transported to market in a saleable condition. These costs cannot be recovered by the sector.”

Mr Livingstone said the difficulty faced by the agriculture sector in discussing the issue with government was that responsibilities for electricity were shared across a number of departments.

“The complexity of the issue was consequently not well understood. This is not a problem that can be solved simply by a change of irrigation timings or tariffs,” he said.

“The key advantage of the AEC was the fact that it was a mechanism by which the agricultural sector could engage directly with government on this issue.”

Bundaberg Regional Irrigators spokesperson and chair of the National Irrigators’ Council Energy sub-committee Dale Holliss said the decision to not continue with LNP’s Agricultural Energy Council whilst disappointing was not unexpected.

According to Mr Holliss, the most urgent issue to be addressed is that of the huge year-on-year electricity price increases that have eroded productivity.

“Over the past six years, we have worked closely with both the Bligh and Newman governments and Ergon to develop a deeper understanding of the issue and to find alternative pathways to achieve sustainable electricity prices. We will continue that process with the Palaszczuk government,” he said.

Shadow agriculture minister Deb Frecklington labelled the closure of the AEC as deeply disappointing and purely political.

“The Council was there to engage stakeholders so that they had a direct say over the development of long-term sustainable solutions to lower the cost of electricity for primary producers,” Ms Frecklington said.

“It was championed by groups like AgForce and the Queensland Farmers Federation, because they knew immediate action needed to be taken to make Queensland’s electricity costs more competitive for farmers.

“The new Labor government has given no other reason for abolishing the Council other than because it was set up by the LNP, completely ignoring the views of the agricultural industry.

“The body they now want to look into this important issue hasn’t even been set up yet.

“They say this issue will form part of a wider review into the electricity sector, but they haven’t even released the terms of reference for the review so how do we know these issues will be addressed and not get lost?

“How many months will our farmers have to wait to get an answer?”

Former QFF CEO, now CEO of Canegrowers Dan Galligan had taken on the role of chairman of the Council.

Mr Galligan said QFF welcomed the formation of the Council but it could now only be judged by its intent.

“We are looking for the new government to ensure that agriculture has a strong voice in Cabinet, that Cabinet has a method of hearing directly from industry and that this extremely important issue is on the top of their minds when looking at setting policy,” Mr Galligan said.

QFF said it has not been briefed on how the new Productivity Commission would look into agricultural electricity prices.

“It is crucial that the issue is not shelved into an area of ongoing review and assessment, where there is no relief for farmers,” Mr Galligan said.