A new review of irrigation pricing by Queensland’s competition watchdog could lead to a significant rise in water costs, says LNP natural resources spokesman Dale Last.
Queensland Farmers' Federation spokesman Ian Johnson said the review looked like a mixed bag, with some schemes feeling a small impact and others set to be significantly affected.
Terms of reference released by the Queensland Competition Authority on Tuesday showed dam safety would be a key aspect of the review.
The authority has been directed to present two price options to the government, one incorporating the cost of dam safety upgrades, the other without.
The cost of these safety upgrades could be substantial, with SunWater currently planning a series of 16 dam improvement projects across the state.
There were concerns that dam safety costs and the cost of flood mitigation would be shouldered by irrigating farmers, Mr Last said.
“The LNP is extremely concerned that Annastacia Palaszczuk has opened the door to significant water price increases for Queensland farmers,” Mr Last said.
To keep water affordable for Queensland’s agricultural industries, the state government should rule out passing on these costs to producers, he added.
Water services provided by Burnett Water in relation to the Paradise Dam in Bundaberg have been specifically ruled out of the review.
QFF water policy advisor Ian Johnson said dam upgrades and insurance costs were two important areas to keep an eye on.
“The other contentious issue is that of flood monitoring costs,” he said.
“They are not as big as dam safety but they are substantive for some schemes.”
QFF would go through the review and its possible impacts with a fine-toothed comb once more information was available, Mr Johnson said.
The irrigation pricing review was announced by Natural Resources Minister Dr Anthony Lynham on Monday morning, with the terms of reference made public on Tuesday.
“The goal is for irrigators to have greater pricing certainty, simplicity and transparency to allow them to plan for future years,’’ Dr Lynham said.
“As part of the review process, extensive consultation will be undertaken with stakeholders and water users to ensure we strike the right balance between the interests of customers and businesses.
“The QCA will be required to limit annual price increases similar to previous reviews.”
A draft report will be released in August 2019, with the current pricing structure rolled over until the review is completed.
Queensland irrigators have expressed concerns recently about the rising cost of power and water.
In September, irrigation hay farmer Mick Zimmermann said his fodder operation had reduced production by 40 per cent due to ongoing high electricity prices.
“Currently we’re only irrigating 70 acres of fodder crops, despite being able to plant up to 170 acres under water irrigation,” he said.
“Due to high electricity prices it’s to costly for us to plant the extra 100 acres of fodder crops under water irrigation.”