The Victorian Farm Modernisation Project (VFMP) has been delivered through the Farm Water Program, led by Goulburn Broken Catchment Management Authority.
The VFMP has helped meet Victoria’s commitment under the Basin Plan by avoiding untargeted buybacks and transferring around 17.4 GL of high reliability water share for the environment. It has funded 241 irrigator projects with over 26,750 hectares of improvements, including automated irrigation, laser grading of land and improved sprinkler technology.
As a Commonwealth-funded water recovery program, the VFMP required water to be transferred away from productive use. It was always recognised that handing water over to the Commonwealth and reducing the volume of water available for irrigation would eventually impact agricultural profitability and the viability of public irrigation systems.
The VFMP has been delivered through the Farm Water Program, led by Goulburn Broken CMA and a constortium of organisations. For further information on the regional implementation of this project, go to the Goulburn Broken CMA website.
Pressurised irrigation system modernised through Farm Water Program. Image courtesy GB CMA.
Options Review of the VFMP
We have reviewed the delivery of the VFMP and considered how the changing climate, drier conditions, reduced inflows and Basin Plan water recovery are impacting land and water use in northern Victoria.
Data from recent studies confirm the picture that has emerged over the past decade:
- a decline in water available for irrigation
- more price variability, and
- increasing demand for high-reliability water shares from outside of the Goulburn Murray Irrigation District (GMID), with water users in the GMID owning less entitlement.
The review looked to find water recovery options on-farm that minimised the socio-economic impacts on the consumptive pool in the southern connected Basin.
It modelled the impact of a reduction in the percentage of water needing to be transferred, but also water products such as Victoria’s Low Reliability Water Shares, unregulated and groundwater licences to minimise the socio-economic impact, particularly in smaller parts that are less connected in the water market.
Download the review fact sheet
The review of the VFMP has found it was not possible to identify options to fund farm works that transfer water to the Commonwealth that:
- avoid negative social and economic impacts to local communities, and
- can deliver significant volumes of water in time for the roll out of the Basin Plan
This includes the current VFMP program design that requires the transfer of 55 per cent of the estimated water savings, which do not have widespread community support because of growing concerns about the real impacts of reduced water availability.
No further on-farm efficiency rounds under this program requiring water transfer will be delivered in Victoria because of these cumulative social and economic impacts on northern Victorian irrigators and the broader community.
Victoria will continue to explore investment in projects that deliver strong public benefit in low-use and high-loss areas grappling with climate change and reduced water availability. In particular, projects that capitalise on distributional losses and operational changes to produce water savings will be developed. These do not take water away from productive use and mitigate against damaging social and economic impacts.
Download Aither's The impact of Water Use Efficiency Programs on the Water Market review or fact sheet
Supporting the VFMP Review, we commissioned Aither to gather evidence to assess the potential impacts of further on-farm water use efficiency (WUE) programs on water markets.
Irrigators in the southern Murray-Darling Basin have seen many changes in the water market in recent years. Trends affecting both demand and supply of water have contributed towards the increases in entitlement and allocation prices in recent years.
There is growing evidence that on-farm efficiency programs with the transfer of water entitlement can also lead to higher water prices.
The combination of increasing allocation prices and a greater percentage of irrigators sourcing allocation water and allocation products is a risk for irrigated agricultural operations.