admin /9 February, 2007
Mick Keogh, Executive Director, Australian Farm Institute, in a letter to The Australian Financial Review (8/2/2007, p.58), dismisses the idea that water can be traded easily between rural and urban users and the price differential should be narrowed.
Some simple solution: "Paul Kerin may teach strategy at the Melbourne Business School, but it is to be hoped his courses do not include water policy, if his recent discussion of the issue is anything to go by (“Big hole in PM’s water plan”, Opinion, February 7)," writes Keogh. "Kerin compares water use charges for urban and rural users, concluding that rural water is significantly underpriced and that removing impediments to trading water between rural and urban users is a simple solution to the crisis.
Bush water not on par: "Urban users receive high quality filtered and chlorinated water, provided under pressure with 100 per cent reliability, and delivered in relatively small amounts to individual households. Rural water users, on the other hand, receive bulk, unfiltered water delivered in open channels, and are required to invest in and maintain their own pumps and on-farm storage and distribution systems. Most significantly, many rural men receive water only on a seasonal basis when it is available.
Weetbix logic: "The logic employed in Kerin’s argument is the same as comparing the bulk price of wheat on farm ($300/tonne) with the price of wheat in a packet of Weetbix ($5600/tonne, based on Woolworths’ advertised price this week of $4.19 for a 750gm pack), and concluding that urban consumers would be better off buying bulk wheat directly from farmers!
Flaw in distribution: "This leads to a major flaw in Kerin’s discussion. He proposes that urban water shortages can be solved by transferring rural water to urban users. However, water is not like electricity, which can be efficiently distributed. Water is relatively heavy and bulky, and quite expensive to transport except by gravity.
Growers need a laugh: "This means there are only limited opportunities to transfer rural water to urban users. The concept that a cotton grower in northern NSW, for example, might somehow sell water to an urban water authority in Brisbane, Sydney or Melbourne is almost laughable in its impracticability. By the time pumping and piping costs are taken into account, desalination would be a much less expensive option."