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Hi all,
It's time for another Progressive Agriculture update, hope you enjoy.

Cheers,
Andrew Bomm
Prices
Prices went up following market announcements from SA and Vic water agencies of challenging allocation scenarios next year, hitting around $620-630. The price seems to have come off with this rain event, but only small volumes have been traded, and we won’t get a clear indication until large volumes are shifted.
 
System losses
The massive system losses through the Murray - 175GL lost above worst case scenario predictions - are worth a fortune. At a conservative estimate of $400/ML across the season, that amount written off as conveyance is worth $70m that would have gone into communities dependent on NSW Murray GS allocations. Unfortunately, the choke trade limit ledger doesn’t match the actual capacity of the river. Trade being closed when the river is below capacity, and open when over bank, is punishing upstream irrigators unfairly. There are fixes but they’ll be unpopular downstream.

There need to be better price signals or direct regulation to help distribute productive water use more efficiently across the system. This could be done via significant change to conveyance and other provisions in water sharing plans, applying a land use planning solution, or changing to the way choke trade limits are applied. Of three difficult solutions, the last one would be easiest, and send a firm signal of risk to those proposing further development downstream of the choke.
 
Goulburn Murray issues
The drought is hitting dairy farmers in the GMID harder than anyone in the Basin. For many operators, especially smaller ones, their businesses are quickly becoming unviable. Buyer interest in small dairy blocks is minimal, and the legacy dairy infrastructure is becoming a liability for sellers. Many blocks are retired and cease being farmed, providing only hobby blocks and housing, including rentals.

Goulburn Murray Water owns a good deal of excess delivery infrastructure and this isn’t improving. There are challenges for the GMID region to adapt, and new opportunities for NSW Murray irrigators to obtain secure water.
Rain
How good is rain. Hope you got the right amount!
 

Fitzgibbon’s pitch
Joel Fitzgibbon staked out his ag policy positions in a recent press club speech. He adopted the sort of progressive-style approach you could expect from the ALP, including some encouraging comments about innovation and new business models, but problems with land management policy and price regulation.

See Speech Here

One bit of detail to come out of it was the ALP’s proposed Farm Productivity and Sustainable Profitability Program. It uses the $100m/year the Coalition has committed to the four-year Drought Future Fund - the one dreamt up out of nowhere and sold by Morrison before the drought summit, after Barnaby had spent five years fiddling on drought policy. Under the ALP version, a ‘council of elders’ made up of industry reps, soil and water experts, an economist, and bureaucrats will spend until 30 June 2020 to develop a new set of program guidelines. Although not immediate drought support, it should enable better spending priorities.
 

Water entitlement lease scheme
I’m involved in an interesting project to develop a regional-based water entitlement lease scheme. The concept involves matching water owners with a selected group of irrigators, under leasing arrangements. There are opportunities for agreement where local supply chain synergies exist or there is a generational asset transfer, and price risk can be shared. Will keep you posted.

Coalition firms marginally
ALP                            $1.30
Coalition                    $3.50

The media
Great ABC Conversations interview with former ABC Managing Director Mark Scott. He’s now in the education sector and has some interesting observations on how our new media platforms are affecting us.
Listen Here

Busy
People are busy - good luck with sowing and summer crop harvest.  

These guys from near Casino have just started doing direct order beef - worth a follow on Facebook to see how they get on.

Follow Here
Richie does car crash TV
Check out this great old school road safety advert with plenty of cricket and Richie Benaud’s endorsement.
Watch Here
Follow @progressiveagri on Twitter
Our mailing address is:
andrew@progressiveagriculture.com.au

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Progressive Agriculture · 13/120 Fitzmaurice Street · Wagga Wagga, NSW 2650 · Australia

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