Cubbie Station is Australia’s largest cotton-growing property, and reputed to be the largest privately-owned irrigation farm in the southern hemisphere. Cubbie is actually an amalgamation of a number of irrigation properties in southern inland Queensland – near Dirranbandi, on the Culgoa River; and St George, on the Balonne River. Both these rivers are part of the Murray-Darling river system, Australia’s largest river system. Total Cubbie irrigation capacity is 537,000 megalitres – 462,000 at Dirranbandi and 75,000 megalitres at St George.
While everyone squabbles about whether or not Australian taxpayers (Federal or State Governments – it doesn’t matter, the money comes from ordinary Australian taxpayers) should pay Cubbie owners a fortune to buy back the Cubbie water rights (for the good of the environment, and downstream farmers), they’re looking no further than the next five minutes and ignoring what will happen in the future if we don’t get our act together now.
Despite the global economic situation there has been an explosion of foreign ownership of vast tracts of rural land. And it’s always the very best quality agricultural land. And the Federal Government recently announced a plan to water down the role of the Foreign Investment Review Board’s role in regulating the sale of Australian land and businesses to overseas residents.
Spare me, why would any country bother invading Australia, when they’re allowed to simply buy up the best land and water rights at what equate to bargain basement prices on the world scene?
Overseas investment companies will buy Cubbie’s water rights if we don’t. Multi-millionaire Argentinean John Kahlbetzer was recently paid more than $300 million Australian dollars for water rights, by the Federal Government. John Kahlbetzer was already been listed in the BRW Rich List as being worth more than $600 million. I’m sure Bill & Bev Smith down the road, both working long hours and raising a couple of kids, would be absolutely delighted to hear their hard earned tax dollars are now lining the already overfull pockets of an overseas resident, who received a huge windfall simply because he had bought properties that happened to have irrigation licences, a long time before water trading became legal.
Many say that the next world war will be over water – a fight over the quantity and quality of fresh water.
Given that water is the next most important thing on the planet after oxygen, is it intelligent for Australia to allow ANY of our water (whether for agricultural, mining, industrial or domestic uses) to be owned by residents of another country, or a business based in another country? Of course not – it is sheer stupidity. If we don’t buy back Cubbie water rights, or at least ensure the water rights cannot be purchased by overseas residents (personally or via a company) then these massive water rights will certainly be bought by overseas speculators. And Australian taxpayers will end up having to buy back these ludicrously large water rights sooner or later. And if it’s later, then not only will the price be very much higher, the money will go straight into the pockets of overseas residents (as it did with John Kahlbetzer). At least if we buy Cubbie water rights back now, the money goes into the bank accounts of Australian residents; if what I understand is correct – Cubbie is currently owned by Australian citizens.
The second thing to do is to prevent a similar situation arising in future. There should be a cap on how much irrigation water any one company can hold, to avoid profiteering and the horror of monopoly ownership (and potential foreign ownership) of what is still too taken for granted – our most fundamental resource – water. Bigger doesn’t instantly equate to more efficient, more profitable or more environmentally sustainable; in fact smaller operators are often more productive, less wasteful and better for the environment. So there is no reason to encourage huge conglomerates at the expense of smaller primary producers. If there already is a ceiling on the amount of irrigation water rights that can be legally owned by one person or one company (or related companies), then it is clearly set way too low. Without a moderate and sensible limit on the amount of irrigation water rights that any one person or company (or related companies) can own, blind freddy can see that cashed-up overseas interests will buy up as much as possible and when the squeeze is on [eg severe and widespread drought and/or potential food shortages), they’ll sell these water rights for as high a price as they are able to demand from the desperate buyers. This huge profit would be made without actually contributing anything to society; and at the expense of Australian taxpayers, primary producers and consumers.
Cubbie owners are clearly dreaming because apparently the bank dogs have been barking for a while – they have been publicly seeking overseas investment since July 2008 – yet they say Cubbie was recently valued at $450 million, and the owners state on the website that they own more than $475 million in assets. (Surprisingly, despite the size of the operation, there are only 50 fulltime employees.) Cubbie owners state that they’ve offered some water rights to the Federal Government previously but ‘the government weren’t interested’. No doubt the reason why is because the price Cubbie owners put on the water rights unrealistically high. It is only once a decade, on average, that there is sufficient water in the Culgoa and Balonne Rivers to allow Cubbie to extract their full allocation; thus these water rights have a significantly lower value than water rights on a far more reliable river system (not that Australia has an overabundance of rivers that fill every year virtually without fail; but there are some – northern Australia’s Ord and Burdekin Rivers, for example). It could be argued that Cubbie owners should be paid for the actual amount of water they’ve actually been able to use over the last decade or so, worked out as an annual average (i.e. their real-life water allocation, not the in-theory allocation), and reimbursed for the water usage fees for all the irrigation water that they paid for but were not able because it was unavailable due to drought. (For those who don’t know how the weird irrigation system works – farmers pay fees annually for their entire irrigation water entitlement, even if that right isn’t allocated in full – i.e. they have to pay for water they can’t have.)
Obviously – what is a fair price for these water rights, or Cubbie Station as a whole, would have to be thrashed out; foreign ownership of such a large slice of environmentally and agriculturally vital water needs to be prevented; and the Federal and State Governments need to implement rules that ensure this situation will never arise again.
Tags: Pastoral companies, Conservation and the environment, Cubbie Station