Water in Agriculture, Environment, or split between the two?

One big change in the new Turnbull ministry that affects the environment and natural resources is that the Water portfolio has been split between the Department of Agriculture (DoA) and the Department of Environment (DoE). Previously, this portfolio was entirely in the DoE, but after the change the ‘environmental part’ i.e. the Commonwealth Environmental Water Holder (CEWH) remains in DoE, while all other parts of the portfolio move to DoA.
Nationals and some Liberals are highly in favour of moving Water to Agriculture – with some of them showing clear dissatisfaction that even a part of the former portfolio is left with the Environment. Labor, on the other hand, doesn’t accept the move at all and will not represent it in its shadow ministry.
These positions are representative of the stark differences in paradigms about water in Australian politics. On one side we’ve got Nationals who see water as another input into agricultural production that should be used to the benefit of farmers. On the other side, the Greens and Labor see water as mainly valued for its role in the environment and water dependent eco-systems.
However, there is a thinking that these paradigms should probably come closer together rather than move further apart. Recent work (e.g. Ancev 2015 in AJARE, and a forthcoming article in Water Economics and Policy (WEP)) is showing that it is very beneficial from society’s point of view to allow interaction between ‘environmental’ and ‘agricultural’ water in the water market. That way we get more water for the environment when it is most valuable to it, and more water for agriculture when there is less need for ‘environmental’ water. This can also help both the environment and the farmers to better adapt to climate change.
So, separating the ‘agricultural’ from ‘environmental’ water in an administrative sense is not a good move. It will reinforce the separation between the two to the detriment of farmers and the environment. A disappointing first move by an otherwise very welcomed new government!

Author: Tiho Ancev

Tiho Ancev is a Professor of Agricultural and Resource Economics in the School of Economics, University of Sydney. His main research areas are agricultural, environmental, natural resource and energy economics. Tiho’s main contributions have been in water economics and policy, economics of energy, economics of air pollution and climate change policies, and economics of precision agriculture and agricultural input use. He has published widely on these topics in top international peer reviewed journals. Tiho has led and contributed to national and international research projects in these research areas. He is currently the Managing Editor-in-Chief of the Australian Journal of Agricultural and Resource Economics.