Physical commodities such as coffee and sugar and cotton best place to be over the next five years as food prices spike under climate contraints

According to Gabriella Hold in The Australian Financial Review, (10/10/2007, p. 31) Clime Asset Management managing director Roger Montgomery says real commodities should outperform not only over the next year but for the longer term as growing populations boost demand for foodstuffs. “Physical commodities such as coffee and sugar and cotton will be the best place to be, probably over the next five years,” he said.

$US and $A one year ratio:

Nomura Australia equities strategist Eric Betts is similarly bullish on commodities, saying they could well outperform other asset classes, as the impact of Australia’s drought increases food prices.

October emergency: dry, hot Murray Darling: no irrigation water, maybe no town or stock water, either – crisis conditions extend, levels lower than 1957

Storages lowest since 1957: At September 30, the total volume of water stored in River Murray System storages was 2130 GL (23 per cent ), which is the lowest for this time of year since 1957, before the construction of Dartmouth Reservoir and Menindee Lakes storage, and the expansion of Hume Dam. At this time last year storage totalled 3350 GL.

Water wizards tell Ministers how to ensure enough Murray Darling water for critical needs in 2008-09

The Murray-Darling Basin Dry Inflow Contingency Planning; Overview Report to First Ministers, September 2007 was a report in which the Senior Officials’ Group listed five principles to underpin measures (including the possibility of a reserve) to ensure there is enough water available to run the river and for critical needs in 2008-09.

Fed plan to take water from irrigators to keep in reserve for SA next year is “scandalous and unacceptable”, says Vic Premier

The Howard Government was facing a revolt from Victoria over a radical plan to take water from irrigators to keep in reserve for South Australia next year, wrote Jewel Topsfield in The Age (20/9/2007, p.6).

“Scandalous”: Premier John Brumby said the proposal was scandalous and unacceptable, particularly when Victorian irrigators were on their lowest water allocations. Under the plan, part of irrigators’ water allocations would be held back in dams in Victoria and NSW in 2007-08 to ensure there was enough water to provide dilution flows to SA in the following irrigation year. A dilution flow releases large amounts of water from dams to improve water quality where there were high levels of salinity and algae. “You’re talking about a fair bit of water here, a lot of water,” Brumby said. “I can’t understand, for the life of me, why they would want to take water from irrigators today … to put aside for what might or might not be required.”

“Outrageous”: Sunraysia Irrigators Council chair Danny Lee said the plan was outrageous because it was doubtful that many irrigators would survive the drought. Irrigators in Victoria’s Murray irrigation system have been ensured only 10 per cent of their water allocations – their lowest ever start to a season.

The Age, 20/9/2007, p. 6

Drought creates new milk-market: top base farmgate prices hit 52c/L mark for those willing to sign up for five years

Milk processors were starting to talk longer-term contracts in a bid to prevent their suppliers from being poached, as the top base farmgate prices hit the 52c/L mark for those willing to sign up for five years, wrote Shane Goodwin in The Land (27/9/2007, p.3).

The Independent Member for Gippsland East, Craig Ingram, blames Vic nationals for plot to cut environmental flows to the Snowy River

The Independent Member for Gippsland East, Craig Ingram, has written to the Federal Member for Gippsland, Peter McGauran, seeking a guarantee that the federal takeover of water will not affect pre-existing commitments on returning environmental flows to the Snowy River.

“Disingenuous political opportunism”: “The state National Party is again showing double standards and disingenuous political opportunism on the Snowy flows issue, a cause which they have shown very little real commitment or support. “While I support recent comments by the state National Party leader that pre-existing commitments to the already stressed Snowy and Murray rivers should come before new projects, the Nationals have actually done everything in their power to stop water projects to the Snowy.

Those “two-timing Nats”: “In almost the same breath as calling for the protection of Snowy flows, the two-timing Nats are demanding that Victoria signs up to the Federal Water Plan, which is the biggest threat to the State Government meeting its commitments to the Snowy environmental flows.
This follows the Federal Government’s push through the Parliament of its new water bill which hands the commonwealth the power to takeover parts of the management of water in the Murray Darling basin. Ingram says the federal plan is the latest and most significant threat to ensuring that the three governments’ commitments on water savings for the Snowy River can be delivered”.
Telephone: (03) 5152 3491 Fax: (03) 5152 2023 Email: craig.ingram@parliament.vic.gov.au http://www.craigingram.com

Sunburnt country: 60 to 70 per cent chance of a dry October to December 2007 for South Eastern Australia

South Eastern Australia and Tasmania and the far southeastern coastal fringe of the mainland had a 30 to 40 per cent chance of exceeding the three-month median rainfall. This means that below-normal falls have a 60 to 70per cent chance of occurring. Over most remaining parts of the country the chances of accumulating at least average rain for the December quarter are between 50 and 60per cent.

Blistering heat ahead for Southeastern Australia – October to December 2007

The Government forecast issued 25th September 2007 showed the outlook was for blistering heat across tthe Murray Darling Basin, with the highest heat for South Australia and Victoria.

WA pig producers losing up to $16 a head, as wheat-price rises to $350/t

WA pig producers could be losing up to $16 a head, depending on their risk management strategies, reported Farm Weekly (13/9/2007, p.16).

‘The Australian Legend’: propping-up farmers in times of drought “a very expensive way to maintain a national myth,” says Aus Institute chief

Almost 50 years since it was published, Russel Ward’s book The Australian Legend still explained why politicians gave generous sums of money to drought-affected farmers, wrote Daniel Lewis in The Sydney Morning Herald (29/9/2007, p.28).

Nearly 69 per cent of Australia’s agricultural land eligible for drought support; economic growth set to suffer as farm output faces slowdown in absence of water

According to Asa Wahlquist and Pia Akerman, in The Australian, (26/09/2007, p.4), nearly 69 per cent of Australia’s agricultural land was eligible for drought support with an estimated 100,000 of the country’s 129,000 farmers working in drought-declared areas and an unprecedented 23,000 farmers receiving drought support last month, the number having risen since.

Over 300 NSW, Victoria, NSW towns face water restriction and water-carting under Ministers Armageddon dust-bowl plan

The Murray-Darling Basin Dry Inflow Contingency Planning Report to First Ministers ;lists Town-by-town contingency planning as “A detailed list of towns potentially moving onto no outdoor use restrictions from 1 July 2007. All states confirm that town-by-town contingency planning frameworks are now in place and are evolving as new issues and situations arise. Public information on affected towns is being made available via State Government web sites”.

Northern Australia – the future food bowl: work on to identify eight to 12 small-scale sustainable precincts to potentially open up to 10,000 to 20,000 hectares across the north outside the Ord

With the non-occurrence of La Nina and the related worsening drought situation across most of Australia, it was high time to focus on the possibilities of Northern Australia and the region west of Ord river with relatively abundant water and the added benefits the north presented in reducing greenhouse gases, as the potential food bowl of the nation said Senator Alan Eggleston, Senator for Western Australia, member of the Government’s Backbench Policy Committee on Health and Ageing, Liberal Party of Australia, in the Commonwealth Senate on 18 September 2007, quoting Mark Lewis of the Western Australia Department of Agriculture, who is the manager of NRM and industry development for rangelands.

Off-farm assets limits for access to exceptional circumstances interest rate subsidy increase from $473,000 to $750,000: more farmers and small businesses likely to seek assistance

According to Gary Sansom, in Queensland Country Life, (27/09/2007, p.9), an increase in the off-farm assets limits for access to the exceptional circumstances interest rate subsidy from $473,000 to $750,000 would enable an increasing number of farmers and small businesses to access exceptional circumstances (EC) assistance.

NSW Murrumbidgee Valley Water Report: 27 September 2007 shows Snowy flow-order saved the day

The Snowy release to the Murrumbidgee Valley for 2007/2008 was currently less than half of the normal volume. There was little rain fall across the Murrumbidgee Valley in the past 8 weeks and natural inflows into the major storages, Burrinjuck and Blowering dams, have receeded to low levels.

Murrumbidgee towns may now ease water restrictions from Level 4 to Level 3a but emergency conditions remain:Water Sharing Plan still disabled

The NSW Department of Water and Energy, September 2007 Murrumbidgee High and General Security licences will be allowed to carryover up to 15 per cent of entitlement, as was permitted last water year. Carryover for High Security will be permitted until the Water Sharing Plan was reinstated.

Flow to South Australia slow: September 2007, Lowest flows since 1968, downstream of Euston Weir, and no flow at all from from Kiewa and Ovens

The pattern of flows to South Australia over the remainder of the season will be critical in managing river salinity in SA and for meeting increasing diversion requirements and losses said David Dreverman General Manager in the River Murray Report For The Week Ending Wednesday, 19 September 2007.

Emergency conditions: NSW withholds river-flow to southern states; had it not, it “would not have had any water for any purpose at the start of the season”

The NSW Department of Water and Energy said things were bad, very bad and only “critical water” was available; and there was the risk that event that supplied could fall so low essential services could not be provided.

Murray Valley Water Report: September 2007- historical low, catastrophic dry feared for 2008/2009

Water availability to users in the Murray Valley continues to deteriorate – it has now reached an historical low, said The NSW Department of Water and Energy, September 2007. There was “Virtually no chance of a NSW Murray Valley allocation increase in September without immediate heavy rain…There was little rain across the Murray Valley in the past month and water supply continued to worsen. Without further inflows in the coming months there may not be any additional water available for use this year”.

New policy-plan: NSW towns to purchase water on the open market in deal to go level 4 to level 3a, others must plan to truck water, open channels banned

The NSW Department of Water and Energy, said sufficient water will be provided to all towns to meet demands under Level 4 restrictions. Level 4 restrictions would continue until allocations of at least 20 per cent for high security licences were announced.

New idea: An option was currently being considered that would allow towns to purchase water on the open market if they wish to ease the level of restrictions from level 4 to level 3a. This would be on the basis that towns acquire 20 per cent of the volume to meet level 4 restrictions for that month.

Queensland offers Darling-tributary, Condamine River irrigators 163 megalitres allocation from Sandy Creek, to Cecil Plains, when river is a dust-pile

According to Brad Pfeffer, in a report to Queensland Country Life, 27/9/2007, p. 9, “last week, the Department of Natural Resources and Water (NRW) posted letters to irrigators on the Condamine River in southern Queensland, calling for interest in 163 megalitres of medium-priority allocation. This was on a river where irrigators across this stretch of the river had no allocations from Leslie Dam for six years. The last dribbles of water sold at $2000/ML; and if allocations sold at that value the income at 163 x $2000/ML, would go to government.

Armageddon mode: South Australia stops River Murray water flow into Lake Bonney, as moves to disconnect 27 wetlands, to secure downstream flow

According to townspeople in Barmera, the State Government’s stoppage of River Murray water flow into Lake Bonney on Tuesday was the “death knell” for Barmera, reported Doug Robertson, in The Advertiser, (27/09/2007, p.18).

Residents contemplate class action: Save Lake Bonney Group organiser Mark Beech, who ran Barmera Backpackers, said business people in the town were considering a class action against the Government for economic loss. He said Lake Bonney would be “dead” if the fresh water supply was cut off for several months.

Supplies cut: Earthmoving equipment moved in on Tuesday, making a 20 metre “temporary” earth barrier across Chambers Creek near Nappers Bridge, about 5 kilometre from the town centre. The Government had cut off River Murray water at 27 sites.

Govt defends action: State Water Security Minister Kaylene Maywald said discontinuing River Murray water from wetlands and lagoons was an emergency response to the drought.

South Australian farmers begin walking off their land amid warnings of national disaster that will force 20 per cent to leave within a year

According to rural editor Nigel Austin, farmers ravaged by drought have begun walk­ing off their land amid warnings it is the start of a national disaster that will force up to 20 per cent to leave in the next year, reported The Advertiser (15/9/2007, p. 1).

WA announces 2007 Dry Season Assistance Scheme; grants of up to $8000 to help minimise impacts of drought

WA Premier Alan Carpenter announced a $9.3 million drought assistance package – the 2007 Dry Season Assistance Scheme (DSAS) – for farmers in the WA wheatbelt to enable struggling farmers to apply for grants of up to $8000 to help minimise impacts of the drought, reported Farm Weekly, (30/08/2007, p.4).

Worst financial crisis for farmers since 1940s: drought cuts Aus winter-crop by one-third

The drought has reduced the national winter crop by a third, pushing farmers into an almost unprecedented financial crisis – one they have not experienced since World War II, wrote Asa Wahlquist in The Australian (19/9/2007, p.8).

Drought: 38 EC declared areas extended to September 2008 at $340m cost; interim assistance extended to 4000 Western Australian and Tasmanian farmers

Prime Minister John Howard announced extended relief for drought-affected farmers, speaking in the Federal House of Representatives on 17 September 2007.

South Australia demand side policy halves Adelaide city use

South Australian Premier Mike Rann praised South Australians for their water conservation efforts while giving details of eased domestic water restrictions to the South Australian House of Assembly on 11 September 2007.

Murray Darling Armageddon: Ministers agree to drain and block 44 wetlands and build a new weir at Wellington

Like the Mayan collapse, it appeared the Murray Darling Basin was in armageddon mode. The long-predicted climatic change appeared to have come early. The Declaration by the the three States, was released by the Prime Minister, who under the just-passed Contingency Planning Overview Report to First Ministers, 20 September 2007.

44 wetlands to die, with more to come: Plans were listed for the death of 44 wetlands with more to come “Senior officials will continue to review the extent to which further wetland disconnection for the purposes of contingency planning is recommended in the Murray System in 2007-08.

Without precedent: “We are facing a spring and summer on the Murray like no other since Hume Dam was completed in 1936,” Chief Executive Dr Wendy Craik AM said today. “The unprecedented combination of both low storage levels and low inflows will require us to operate outside our normal operating regime.”

The Overview Report to First Ministers said: “Disconnection of regulated wetlands to save water in the system continues in each State”:

• The NSW Government temporarily disconnected one regulated wetland (Tareena Billabong) in June 2007. At Euston Lakes evaporation savings will be achieved via lowering of the weir pool. This will have the same effect as disconnecting these wetlands.

• In South Australia, twenty-seven wetlands were closed in January 2007 and two additional wetlands (Ross and Jaeschke Lagoons) were disconnected in June 2007.

The Minister for the Environment and Water Resources determined on 24 August 2007 that the temporary disconnection of a further seven wetlands in South Australia does not need approval under the Environment Protection and Biodiversity Conservation Act (1999) (EPBC Act).

• The Murray-Darling Basin Commission has agreed to funding disconnection of six of these wetlands, including the provision of alternative water supplies for existing users;

• The Victorian Government has completed a preliminary assessment of potential wetlands for temporary disconnection.

Temporary weir near Wellington: After a referral by South Australia, the Australian Government Minister for the Environment and Water Resources has determined that the construction of a temporary weir near Wellington is a controlled action for the purposes of the EPBC Act. The temporary weir is to be assessed at the level of an Environmental Impact Statement. The South Australian Government will make an announcement regarding the weir during September 2007.

NSW, Victoria, South Australia policy-makers drought-panic leads to weasel words and tricky accounting

States have made a Declaration of emergency which requires to draining of more than 30 wetlands in the Murray Darling Basin to service Town Water and some irrigation. The Prime Minister’s release of the Murray-Darling Basin Dry Inflow Contingency Planning Overview Report, September 2007 showed panic-moves to respond to worst case of a dry Murray Darling system, with water below intakes, and with what water was left – so saline,  as to, poison crops. Each state had moved into last-ditch-measures mode, and tricky accounting was disguised with weasel word as all States agreed to change rules and use bureaucratic-speak to hide the take of the last water in the system – the wetlands and ‘environmental flows’ – needed to keep the river system alive.

April 2008 Murray system disaster forecast; tree deaths, massive fish deaths, as water falls below the intake-pipes

Water-levels below Lock 1 were projected to fall from their current level of 0.25m Australian Height Datum (AHD), to negative 0.6m AHD in April 2008. Under these projected conditions, massive fish death in the Lower Lakes is more likely. For the worst case scenario, water levels will continue to fall, reaching negative 1.5m AHD in the latter half of 2008. Salinity would rise and make what small irrigation water which was available, poisonous to crops and trees.