Community management of irrigation schemes – what it should look like in practice

It must be remembered that the high cost of irrigation water for irrigation schemes delivered and managed by Tasmanian Irrigation (TI) was the catalyst for the Hon Greg Hall MLC establishing the 2017 Legislative Council Select Committee Inquiry into TI. The 2018 Legislative Council Select Committee Report was in turn the genesis for the Water Miscellaneous Amendments (Delegations and Industrial Water Supply) Bill 2023 allowing for community management of irrigation schemes.

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At the time TI was established it was initially understood management of completed schemes would devolve to irrigators. The Select Committee Report made several recommendations with respect to management of irrigation schemes, including that the Tasmanian Government:
“facilitate a clear pathway for each scheme to determine its future, whether this be:
-    self-management;
-    a hybrid model using the resources of TI; or
-    management remaining with TI.”
The Government, and the former Minister - the Hon Jo Palmer MLC - are to be commended for delivering on its promises in response to the Select Committee Inquiry, with the passing of the Water Miscellaneous Amendments (Delegations and Industrial Water Supply) Bill 2023 putting in place the necessary statutory devices permitting community management of irrigation schemes. Whether the Government’s legislative changes will result in any schemes successfully transitioning to community management is dependent on TI embracing community management as an additional tool in its toolkit to assist with managing its costs of operating and managing irrigation schemes.

Tasmanian Irrigation management of Irrigation Schemes
An examination of TI’s 2022/2023 Annual Report paints a sobering picture of the financial sustainability of its operation and management of irrigation schemes. Bearing in mind that presently some 67% of the overheads costs of TI is being contributed by the Tasmanian Government in support of TI’s capital works program, as TI completes the build-out of irrigation schemes the financial sustainability of the operation and management of irrigation schemes by TI is only likely to worsen.

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Community consultation
TI has conducted a series of community consultation sessions with irrigators statewide, including with TasFarmers and members of its irrigation committee on 20 May 2024.
At the 20 May consultation meeting with TasFarmers the CEO of TI stated that
in his view the Winneleah scheme would no doubt submit an application for self- management, which in TI’s CEO’s view, would likely see the Winneleah scheme transition from an arrangement where TI was the asset owner and the Winneleah irrigators the scheme operator (through Winneleah Irrigation Scheme Limited – “Winneleah Irrigation”) to one where TI would remain the asset owner and the Winneleah irrigators essentially assume a role equivalent to that of a contract manager.

Given this statement by TI made as recently as 20 May 2024, TasFarmers was as surprised as Winneleah Irrigation Scheme Limited to learn on 5 July 2024 that TI had elected to not renew its contract for the operation of the Winneleah scheme with Winneleah Irrigation, but rather TI would reassume the full spectrum of functions for operation of the scheme. At the time of writing the reason for this decision by TI was understood to be that TI considers it can deliver the services more cost effectively than Winneleah Irrigation.

TI insists that those groups that apply to take on management responsibilities must work in collaboration with TI to ensure that positive outcomes are achieved for the scheme and for its irrigators. Collaboration is a two-way street; TI’s decision with respect to the operation of the Winneleah scheme leaves TasFarmers concerned that TI’s views on collaboration may be more akin to collaboration being a one-way street.

Read more: Community management of irrigation schemes – what does it look like in practice?

Benchmarking of operation and management costs
Australian farmers are more directly exposed to free markets than virtually any other group of farmers in the world, meaning Australian farmers have become proficient at driving out inefficiency and waste - including in operating overheads. Farmers can be confident that their costs are benchmarked against some of the most competitive free markets in the World.
TasFarmers was surprised to learn at its 20 May 2024 consultation meeting with TI that TI does not externally benchmark its costs for the operation and management of irrigation schemes.
External benchmarking must be part of ensuring TI’s operating and management costs for schemes are put on a financially sustainable footing.

Community management of irrigation schemes – what it should look like
Community management of irrigation schemes will not of itself be the silver bullet that solves the problem of unsustainable operation and management costs for irrigation schemes. Whereas it may be a device to assist in getting some schemes onto a more sustainable footing, there will no doubt be other schemes where TI will remain the best vehicle
to deliver cost effective operation and management services.

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It seems the key ingredient to successfully harnessing the benefits of community management of irrigation schemes for the benefit of both TI and irrigators - and the State and
Commonwealth Governments who have invested much public money in these schemes - will be true collaboration between TI and irrigators. Irrigators are dollar for dollar contributing as much capital to the implementation of these irrigation schemes as is the Tasmanian Government through TI, and ultimately the responsibility for paying for the operation and management costs of schemes will be borne by irrigators. Given this, it is time
that TI demonstrate a willingness to behave collaboratively with irrigators because achieving the Tasmanian Government’s target of $10bn per year annual farm gate value by 2050 demands that farmers and TI work together in a truly collaborative manner.

TasFarmers will continue to advocate for the interests of its members and irrigators as they have always been - and will always be - key stakeholders of TI.