On Tuesday 18 October 2011, the Australian and Victorian Governments signed an agreement for $1.216 billion to fund the complete modernisation of irrigation systems in northern Victoria’s food bowl to deliver 214 GL of water savings.

Under this agreement the Commonwealth will invest:

• $953 million towards Stage 2 of the Northern Victoria Irrigation Renewal Project (NVIRP2) to deliver 102 GL
• $219 million for the strategic water purchase from Victoria of 102 GL from NVIRP2 water savings previously intended to be shared among GMID irrigators
• $43.7 million for an on-farm irrigation efficiency program to deliver 10 GL.

This investment builds on the $1 billion first stage of NVIRP.

The funding arrangements will avoid irrigators having to contribute $100 million to Stage 1 and $106 million to Stage 2 of NVIRP, which would have forced water prices up from 25 to 45 per cent.

Integration with NVIRP1

To ensure Victoria has the flexibility to deliver both stages of NVIRP and to provide the best outcome for the community, the timelines for the completion of NVIRP1 will be extended from June 2013 to June 2018.  This means water savings that would have been issued to irrigators in June 2013 will now not be provided until June 2018.

Further exemptions to 4% trading limit

Victoria has agreed to allow extra trade to the Commonwealth by some irrigators whose trades were not approved because the 4% limit had been reached.  A special exemption to the 4% limit will allow the approval of a total of 88 GL of Commonwealth water purchases that were refused in the July 2011 ballot, or were accepted by the Commonwealth in its 2010-11 tenders to buy back water for the environment.

The Commonwealth is required to submit these applications for approval to Goulburn-Murray Water by 28 February 2012.

On-farm efficiency program

The on-farm irrigation efficiency program will generate 20 GL of water savings by investing in on-farm irrigation infrastructure upgrades.  10 GL of the water savings will be consolidated and transferred to the Commonwealth.  This program includes a $4.8 million in-kind contribution from participating farmers. The remaining 10 GL will be allocated to irrigators participating in the OFIEP.

The Goulburn Broken Catchment Management Authority (GBCMA) will deliver the project on behalf of Victoria and will be providing details about how to apply for funding in the coming weeks.

Draft Murray-Darling Basin Plan

The draft Murray-Darling Basin Plan is expected to be released in mid-November 2011.  The water savings recovered through this Food Bowl Modernisation Project will contribute to water recovery from the GMID to meet the Plan’s proposed sustainable diversion limit volumes.

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