It was deemed as a highly anticipated report undergoing a lengthy draft period and received a multitude of submissions, yet the final draft will cause nothing but more angst for struggling farmers. The Queensland Competition Authority's (QCA) rural irrigation price review 2020-24 report was delivered this week, acknowledged the key concerns put forward by the QFF, however the results are still quite a long way from achieving clarity for farmers who will be hardest hit by the price recommendations put forward in the this report.
One of the major issues is the inclusion of dam safety upgrades in the water pricing pathway. The QCA was tasked by government with providing two sets of prices, one including these additional costs and one without. QFF acknowledges they have completed this task, but it is our very strong position that dam safety costs are a community responsibility and should not be borne by irrigators and we will continue to strongly advocate this position with government to reach a successful outcome. The risk to irrigators should government seek to recover these costs is an uncertain future of continued water supply to users at economically viable cost.
Unfortunately, the disappointments don't stop there with the report detailing significant variation in cost increases for different irrigation schemes. QFF previously recommended a review of the efficiency and allocation of all overhead costs, including establishing a transparent approach for passing through cost increases to maintain scheme assets, rising electricity and insurance costs. To date this has not been addressed. However, the irony of this is that although the QCA have been less than transparent in providing details for the end user to see what was achieved throughout the process.
With some irrigation schemes facing significant cost increases and the inclusion of dam safety upgrades in the water pricing pathway without taking into account irrigators' ability to pay, questions are raised regarding the long-term viability of some schemes and the productivity and profitability of Queensland farmers. There must be a concerted effort to plan and implement measures that help the irrigation sector to cope with the significant issues arising from these water security and pricing reforms.