BlogLog-Bourke Visit 24th to 26th September,2012

Drove out to Bourke on Sunday/Monday. When first with Clyde I used to do it in a long half day-driving too fast, before we got flash and bought an aircraft. This time went to Mudgee on Sunday evening and got to Bourke about 2:30PM on Monday via Dunedoo, Mendooran, Gilgandra, Warren and Nyngan. My visit had three purposes:-

• to a assist with a documentary film that some of my friends from the Lower Lakes are making which may feature Toorale. 
• to attend Geoff Wise's farewell from the Shire GM position,and
• to give evidence to the NSW Legislative Council Committee which is inquiring into the gazetting and management of National Parks-again Toorale. (All recorded in Hansard)

Had a thoroughly enjoyable time. Called to see my agent friend Trevor Wilson in Warren and got an update on former Clyde stations and staff. Refueling at Nyngan, fortuitously and coincidentally ran into Ken Jury, the driving force behind the film, and the film crew. He accompanied Gail and me for the drive from Nyngan to Bourke. We hardly drew breath on what can be a long somewhat depressing drive. I was very encouraged by the line being taken with the film. On arrival in Bourke I gave the film crew a briefing on Toorale with the aid of a map and some digital photos I had put together.

Much enjoyed the farewell to Geoff and Anne Wise at Kidman Camp on Monday night. I have much admired the way Geoff and Anne have thrown themselves into the Bourke community in the five years they have been there. Geoff, a veterinarian by training, was previously a senior NSW public servant including Western Lands Commissioner. He was also a very valuable member of my Darling Matilda Way Sustainable Region Committee. He is very knowledgeable on water issues, and whilst we didn't always agree when he had to administer Government policy, we have always been friends and then also strong allies from the time he went to Bourke.

On Tuesday morning my friend John Oldfield (79) of Belalie Station flew us over Toorale with a cameraman filming out a side window in the back of the aircraft and me, wired for sound, doing a commentary on the place, particularly the McCaughey water spreading scheme. Country looks great, but I just hate the neglect and waste.

On Tuesday afternoon I did an interview for the film in the lovely garden at the Riverside Motel before giving my evidence to the Parliamentary Committee at the Bourke Bowling Club. This finished in time for me to join a Board Meeting  (by telephone) of the Tandou Board to sign off on the Annual accounts.

Drove back to Sydney via Dubbo and Merriwa on Wednesday. Called on Gail's nephew, David Dugan who runs the Joe Jones Agency at Trangie. Arrived just on "smoko" and had an enjoyable discussion on water issues with David's impressive team over a cup of coffee.
At Dubbo we had a very enjoyable lunch with old Bourke friends John and Norine Lack. Gail and Norine were school girls at Bourke together in the 1950's-Norine's father Ern Brook was the Head Buyer for Tancreds when their Bourke Abattoirs was  the most important sheep and cattle meatworks in Western NSW. 

Some relevant photos. And more.

Water Storages Full to the Brim-Weekly Times Article, 17th September,2012

AUSTRALIA'S key water storages are full to overflowing for the first time in 16 years.

River officials on the weekend declared the Murray Darling Basin storages 100 per cent full.

Storage levels increased by 108 gigalitres in the past week and is now 8555 GL, 100 per cent of capacity.

The last time it reached this level was October 1996.

Active storage has reached 100 per cent despite Lake Victoria, Hume and Dartmouth dams being slightly below full supply.

This is all because of the high surcharge level in Menindee Lakes, which are more than 110 per cent full, with the addition of extra storages.

Storage levels at Dartmouth Dam increased by 35 GL to 3687 GL (96 per cent capacity).

At Hume Reservoir, inflows averaged about 16,000 ML/day and have remained fairly steady in recent days.

Release from Hume has been reduced in order to steer the storage level towards full supply.

The rain outlook is relatively dry for catchments upstream of Hume, however if further rain is forecast over the coming weeks, the release could again be increased to create "extra airspace'' ahead of any rise in inflows that may result.

Storage in Hume Reservoir is 2934 GL (98 per cent capacity), an increase of 23 GL.

I commented:-
We continue to read in the mainstream media of the "ailing Murray Darling Basin" and measures to "save our rivers". Will the various commentators now acknowledge that in terms of water availability the MDB has never been in better shape. As the Mayor of Hay said recently "the MDB Plan is a solution looking for a problem!"

Cubbie

A switched on agricultural commentator has written the following commentary on the proposed Cubbie Station sale. I agree with it.

Editorial
The decision by the Treasurer and the Federal Government to allow a consortium from China, Japan
and Australia to jointly bid for the Cubbie Group, has prompted widespread discussion and debate.

The Foreign Investment Review Board, which advises the Government on these matters, has
obviously concluded that the national interest has not been undermined by this particular consortium’s intentions.

There will be many who agree with this conclusion, and probably an equal number that disagree.
Unfortunately, some of the debate has been tinged with xenophobia, and may have ignored
relevant facts in relation to Cubbie’s current debt dilemma, which preceded these events.

Cubbie was first developed for irrigation from grazing country around 1983. Under various forms of
ownership, it has developed 93,329 hectares comprising 22,256 ha or furrow irrigation and water
storage capacity of 538,800 megalitres, with potential to irrigate a further 11,000 ha.

Development expanded rapidly in the 1990s, when the cultivated area exceeded 40 kilometres
wide and the property and its water storages became visible from satellite imagery mapping the
area from Brisbane to Adelaide.

So successful was this development, that from its humble grazing beginnings, Cubbie was
subsequently able to harvest water, wheat, cotton, corn, chickpeas, barley, sunflower and sorghum
in huge volumes.

Dogged by a series of drought years (7-8), by 2008 Cubbie was in dire straits. In November 2008,
Suncorp and the NAB, its major lenders, engaged McGrathNicol to investigate and report on the
financial position of Cubbie, and monitor its attempts to repay its debts.

Prompted by drought-induced low production and rising debts, Cubbie was first offered publicly for
sale in August 2009, when expressions of interest were sought, and/or a capital injection. Nothing
satisfactory was forthcoming.

In October 2009, Cubbie was placed in voluntary administration (under McGrathNicol) from which
it did not emerge until July 2010 when McGrathNicol, were appointed Deed Administrators.

This meant that liquidation could be avoided and restructuring strategies and opportunities could
be pursued.

In October 2009, inter-company loans within the 11 companies in the Cubbie Group had reached
$320 million, owed mainly to Suncorp and the NAB. The administrators placed credit limits on staff
for expenditure, with a maximum limit of $20,000.

In July 2010, following significant seasonal improvements and water availability, and the banks’
decision to bankroll the 2010-11 crop, this credit limit was expanded to $100,000, which meant five
designated employees could collectively outlay up to $500,000.

At that time, Cubbie was said to have enough water to plant 21,158 ha of cotton with potential
to produce 222,100 bales worth in excess of $126 million. Although no official data is publicly
available, the total value is rumoured to have exceeded this estimate by around 10 per cent.

This background shows that Cubbie has been on financial notice, and in trouble with its lenders, for
at least four years, during which time no acceptable buyer of first or last resort was found.

Had it not been for the goodwill provided by its lenders, Cubbie would have been subject to
foreclosure by its lenders, and would be either sitting in their bad debts portfolios, or off-loaded at
a significant loss, most likely in much smaller, more financially digestible portions.

Consequently, an offer to purchase the entire entity should be welcomed, rather than condemned,
particularly given the uncertainty created by the current controversy over the Murray-Darling Basin
Plan, and its unknown impact on Cubbie’s future.

It would certainly have been preferable for the potential buyer to be of Australian origin, but with
none willing to take up equity on commercial terms, the only alternatives are a foreign buyer; a fire
sale by the two major lenders; or ongoing financial support from Suncorp and the NAB.

Given current trends in cotton prices, rising energy and other input costs, and Cubbie’s current debt
levels, the first two options are most likely the only ones still seriously in play.

What is intriguing though is this: If three consortium members, none of whom are cotton growers
or investors in cotton production, can see future potential in Cubbie (at a price), why cannot an
experienced, professional Australian-dominated cotton conglomerate see the same potential?

In all fairness, Australian companies and consortiums have had an equal opportunity to purchase
Cubbie, and have failed to get past the front gate. And it is, after all, the prerogative of the owner
to take the best price. Very few farmers have a history of accepting lower bids.

-----------------------------------------------

"The Land" Extract 16th August,2012

‘Toorale’ sale reflects Basin flop

JULIAN LUKE

17 Aug, 2012 12:21 PM

WHEN David Boyd flies over Toorale Station now it nearly brings him to tears.The former chairman and chief executive officer of Clyde Agriculture – which sold “Toorale” to the Commonwealth and NSW governments for $23.75 million in September 2008 – cannot believe the 91,383-hectare property is lying unused.
Mr Boyd believed the purchase of Toorale Station in 2008 – which he said had a huge negative economic impact on the community of Bourke, for minimal environmental gain – was representative of the Murray-Darling Basin Plan.
Last week the Murray-Darling Basin Authority released its final amendments to the Basin Plan, which the Murray-Darling Ministerial Council will now analyse before reporting back to federal Water Minister Tony Burke by August 27.
“The ‘Toorale’ debacle, as I like to call it, is a microcosm of the Murray-Darling Basin Plan ... by that I mean big economic disadvantage, socio-economic damage and bugger all environmental benefit,” he said.
Mr Boyd retired as an executive of Clyde Agriculture in December 2007 but remained on the board as a non-executive director for a number of years.
He wants to see Toorale Station – which is now broken into a 54,385ha State Conservation Area and the 30,866ha Toorale National Park – returned to full agricultural production.
The huge western floodplain on the property is currently lying full of feed thanks to man-made storages along the Warrego River, which have driven successive years of flooding onto the delta.
“If you stock responsibly, if you look after the assets generally, including control of feral animals, control of weeds, then I don’t see any conflict between protection of environmental values and commercial results,” Mr Boyd said.
“If we care about people, if we care about communities, then we want economic activity.
“We’ve got a moral responsibility to sustainably maximise production.”
Mr Boyd said he was infuriated by the fact “Toorale” was not being used for agricultural production.
The Commonwealth commissioned engineering consultants Aurecon to investigate how much it would cost to decommission the six dams along the Warrego River, which found it would cost $79 million to fully decommission Toorale Station.
But Mr Boyd said taking out the dams along the Warrego River – built by Sir Samuel McCaughey in the late 19th century to drive water onto the western floodplain for grazing – would be pointless.
He said the dams merely accentuated what naturally occurred during large floods anyway and believed that by simply opening the regulation pipes installed at the bed of the river in each of the dams down the Warrego, natural conditions would be replicated.
“The Commonwealth government ... (was) obviously feeling the pressure because people were saying ‘where is all this water you were supposed to get’, which they were never going to get anyway,” he said.
“The consultant said it would cost ($79m) to remove the banks and the pipes ... I say for what purpose? What are you going to achieve? If you’ve got the gates open I think you’ve replicated natural conditions anyway.”
Mr Boyd said the 2000ha irrigation area only drew water from the natural water storage, Ross’s Billabong, which Clyde Agriculture filled each year using high-flow water licences on the Darling River, or if it filled naturally when the Darling and Warrego rivers overflowed.
While the Commonwealth government has said it believed the decommissioning of Toorale Station would return about 20,000 megalitres of water to the environment in an average year, Mr Boyd said Ross’s Billabong only held about 10,000ML.
“The other dams (along the Warrego River) are shallow, dry up very quickly and collectively don’t actually hold a lot of water,” he said.
Susie Dunn – who along with her husband Dudley purchased Toorale Station in the early 1970s and transformed it into the property it is today – said the debate about the Warrego River was peripheral and that the water had been delivered back to the Murray-Darling Basin.
When the Dunns – who went on to found Clyde Agriculture with the UK-based Swire Group – purchased“Toorale”, Mrs Dunn said it was “a shell up for surrender”.
Mrs Dunn and her husband helped pioneer the cotton industry at Bourke, building the irrigation area on Toorale Station and also flying to the United States of America to purchase a cotton gin.
The Bourke Shire Council has lamented the loss of the productive capacity of Toorale, which contributed about four per cent of the rates each year and about 10pc of the local GDP.
“We bought it with the hope of putting back a viable property and in fact that’s what we did,” Mrs Dunn said.
She said given that all irrigation water previously used to grow cotton on “Toorale” (from the Darling River) was now returned to the environment, and the Warrego storages had not supplied water for cotton, it would be a “tragedy” to demolish them.
“The Warrego really had nothing to do with it. There are high-flow pumps on the Darling River and that was the water used for cotton.”

Read David Boyd's comment piece on what's wrong with the Basin Plan here.

Murray Darling Basin Plan-Overview 15.08.12

The Mayor of Hay recently described the Murray Darling Basin Plan as "a solution looking for a problem", that is a great summary,in brief.

In somewhat more detail, following is my personal submission to the Murray Darling Basin Authority in April,2012.

Submission to the Murray Darling Basin Authority.


Preamble
The debate over the last year or so on the Draft Plan and its predecessor has revealed glaring flaws in both the Water Act (2007) and the Draft Plan.

So much so that if we are serious in securing better natural resource management in Australia we need to go back to the drawing board and repeal the Act.

I remain greatly concerned that as a consequence of misguided action by Government we will cause great socio-economic damage, unnecessarily limit future production, and do little or nothing for the environment.

I make these comments from the perspective of somebody who has followed the Basin debate closely, and has had long experience in water management particularly in my past role as Chairman and Chief Executive of Clyde Agriculture which was not only an irrigator but had extensive floodplain grazing and dryland farming operations.

Base Position
The Millennium Drought had a major impact on the Basin. (The renowned recuperative power of the Australian landscape has been demonstrated in its spectacular recovery since the drought broke.)

Water extractions were well controlled by the adaptive management approach embodied in the allocation process, guided by the Water Sharing Plans.

Natural impacts from extreme drought are being incorrectly labelled as chronic ill-health.

At the top of the Murray and Murrumbidgee the Snowy Scheme is not being managed in a manner which optimises its original water conservation objectives.

At the bottom, the Murray River has been deprived of its estuary by The Barrages and this has created serious environmental problems, and the call for ever more fresh water. The diversion of fresh water flows in the South-East of S.A. to the sea, flows which once drained to the Southern Lagoon of The Coorong, has also caused environmental problems.

Asking the CSIRO to come up with single figure Sustainable Diversion Limits (SDL's) for the rivers within the Basin reveals a fundamental misunderstanding of the nature of our inland rivers and their massive variability. To argue that these numbers are "averages" doesn't help, given the enormous spreads around the averages. In using absolute numbers as the MDBA has done, to prescribe acceptable extractions/diversions limits without relating these to actual flows (availability), is really nonsense.

One has to wonder whether we are proposing to "throw the baby out with the bathwater' in moving to a centralised Commonwealth water management regime.

Our current water bureaucrats could do worse than study how the existing control system operates. It works rather well.

Drought Induced Perceptions
In 1990 I toured China, Vietnam and Laos with a delegation from the NSW Department of Water Resources. The delegation included the State Minister, the Departmental Head and the Chairman of the MDBC. One of our objectives was to explain to our hosts how different jurisdictions could successfully manage a river-in their case the Mekong. The successful model was the MDBC which at the time was held in the highest esteem. How perceptions have changed!

More Conservation
If we had more dams, in the big wet events, we could store very substantial additional amounts of water, yet they would represent only a tiny percentage of the big flows.

Toorale Station Lesson
The Government purchase of Bourke’s most productive property, Toorale Station in 2008 is a microcosm of the Basin Plan. If Toorale had continued to operate it would have reduced river flows in the Darling River past Louth in 2010/11 by 0.01%!

In other words, great social cost, for no environmental benefit.

2012 Outlook Conference
This MDB session at the recent Agricultural Outlook Conference disturbed me for a number of reasons-

The opening graph showed no impact from the allocation system which dramatically reduced extractions during the recent drought.

There was a broadbrush comment that MDB extractions were usually "around 10 to 11,000 GLS."

There were many comments such as "recovering water" and "closing the gap" without it would seem an understanding that Government buying entitlements is simply changing ownership from the private sector to the Commonwealth Environmental Water Holder (CEWH).

Recognising the Difference Between ‘Entitlements’ and ‘Allocations’
According to the ABS, during the most recent years of the drought the allocation system guided by the very effective water sharing plans for each of the Basin's rivers reduced extractions to-

(GL'S)

2005-06   7369

2006-07   4458

2007-08   3141

2008-09   3492

2009-10   3564

not around "10 to 11,000 GLS" as quoted at the Outlook Conference.

Water entitlements without allocations amount to 'phantom water'. An 'entitlement' only grants the holder a share of 'allocations' when there are any. The entitlements held by the CEWH will apparently still attract allocations (when water is available) and nobody really knows what this new player (the Government) is likely to do with them.

So, we have a situation whereby before allocations are granted the water sharing plans call for a priority to 'critical human needs' and assessed ‘environmental needs’. Once these are met then allocations for 'consumptive' use are made. So, in what is proposed the CEWH gets a second bite, presumably mainly for environmental needs and becomes a player in the water market. This gives rise to some interesting conflicts of interest.

It seems to me that if the assessed environmental needs are not covered adequately under the water sharing plans, which I doubt, then it is those plans that should be changed. Not have the "dog's breakfast" that is now proposed.

Summary
I contend that the fact remains that we have confused the natural impact of a very severe drought with "ill-health" and invalidly blamed it on extractions. A situation which has been wonderfully and dramatically corrected in the time honoured manner by the flood flows of the last three years.

We should repeal the Water Act and begin the process anew along lines proposed by a former NSW Director General of Water Resources who has had extensive global experience in river management.

I have serious doubts of the wisdom in centralising control in Canberra. The former MDBC/Ministerial Council approach with all the tensions and debates between the States that water management inevitably involves, was once held up around the world as an example of how to do water management properly

I can do little better than conclude with the words of Harvard Professor John Briscoe-

"My conclusion is stark. I believe that the Water Act of 2007 was founded on a political deception and that the original sin is responsible for most of the detour on which Australian water management now finds itself. I am well aware that unpredictability is an enemy and that there are large environmental, social and economic costs of uncertainty. But I also believe that Australian cannot find its way in water management if this Act is the guide. I would urge the Government to start again, to re-define principles, to engage all who have a stake in this vital issue, and to produce, as rapidly as possible, a new Act which can serve Australia for generations to come. And which can put Australia back in a world leadership position in modern water management."

J.D.O.Boyd
10.04.12

Murray Darling Basin Plan 06.08.12

How good is this! Written by a knowledgeable, eloquent friend.

EDITORIAL 07.08. 12

The Murray-Darling Basin Authority’s Proposed Basin Plan, released this week, represents a potential communication catastrophe.  In terms of presentation, it is disastrous, bordering on incomprehensible.

It lacks the fundamentals of acceptable information transmission: it has no start, no middle and no ending.  Importantly, it lacks an essential executive summary. The way it is written makes it almost incapable of being condensed, easily absorbed or understood.

It blindly adheres to principles that cannot, or will be extremely difficult, to manage and implement over the various time and evaluation periods specified. In fairness, however, it is probably the fault of the Water Act and political naivety that have created the fundamental flaws on which the Proposed Plan is based.

As outlined in the Plan, around 94% of available rainfall evaporates or transpires through plants. Less than 6% of rainfall runs off into rivers and streams of the Basin.

Climatic conditions vary considerably from region to region and year to year. Rainfall is summer-dominant in the north and winter-dominant in the south. Variation in annual inflow to its rivers over the past 114 years have ranged from a high of around 117,907 GL in 1956 to a low of around 6,740 GL in 2006.

Despite this background, the Plan aims to “protect and restore” the significant social, economic and environmental assets and infrastructure developed over the past century or so, basically by manipulating the wildly variable, often destabilising elements of nature, climate and human endeavour.

A Basin producing an estimated $15 billion annually (40% of Australia’s agricultural production), comprising about 60,000 rural businesses (18,000 of them irrigating crops) and providing water for more than 3.3 million people, deserves a better fate than this 254-page quagmire of legal and bureaucratic jargon, repetitiveness and verbosity.

The Bush Brothers

The linked article, beautifully written by my good friend Peter Austin, has stimulated me to record my personal association with the Brotherhood of the Good Shepherd. Whilst I am familiar with the Marra and have driven past the Church many times, I was not aware of its connection with the Brotherhood nor was I aware of my old Dalgety client and friend Jim Marr's association with the Church.

Since my days at Nyngan in the mid-1960's-it was our first marital home-I have loved the Marra country which I have always regarded as some of the best sheep grazing country in Australia. I tried unsuccessfully, to get a scale holding there for Clyde. We had a flirtation with "Womboin" and purchased "Merrimba" and "Oxley" north of Warren, but as good as they are, they are not "Marra Creek country".

When in 1960 as a 19 year old Dalgety sent me to Bourke Office, I continued with my attention to spiritual matters by worshipping at The Holy Innocents Anglican Church. I had been well grounded in such things at Canberra Grammar School which like the Bathurst Diocese was of the "High Church" variety, so well described in Peter's article. Bourke was in the hands of the Brotherhood of the Good Shepherd and the Priest-in-charge was a truly delightful man in the person of Brother Timothy-The Reverend Dr.Barry Marshall. After Second World War service in the RAAF, Bro Timothy studied for the Ministry at Melbourne University (Trinity College), St. John's College Morpeth and Oxford University. He went to Bourke in 1956 where he was greatly loved and returned to Trinity College , Melbourne as Chaplain in 1961.

 It was at his Church farewell in Bouke in early 1961, that I met a vibrant young school leaver, one Gail Dugan, the daughter of one of the local Church's true stalwarts-Nellie Dugan. Mrs Dugan approved of me, because I went to church and this enhanced my clumsy advances towards her young daughter. To make a long story short, nearly six years later (1966) Gail became my wife; now of 46 years standing.Gail and her mother had great affection for Bro Timothy and Gail recalls him helping her prepare for debates at Bourke Intermediate High School before she went away to Marsden Girl's School at Bathurst for her final two years of secondary schooling. Whilst at Bourke he had a very serious car accident and for some time his life was threatened. However, he appeared to make a good recovery.

At Melbourne University Bro Timothy came in contact with my sister Helen, then a post-graduate chemistry student at Melbourne University. He officiated at her wedding in Trinity Chapel in 1962. I gave her away and Gail, who by then had commenced her nursing studies at Royal North Shore Hospital, came down to Melbourne from Sydney to attend the wedding with me.

When Gail and I were married in 1966 Bro Timothy officiated at our Sydney wedding at the Mowbray Memorial Chapel, Chatswood and was the Master of Ceremonies at the reception.

In 1969 Bro Timothy was appointed Principal of Pusey House, Oxford. (UK). We visited him there in early 1970. Later that year he fell from a chair whilst changing a light bulb, suffered severe brain damage and died. A terrible loss of a truly delightful man in the prime of his life.

Pusey (1800/1882)  was one of the leaders of the Oxford Movement which established what has become the High Church (Anglo-Catholic if you like) faction of the Anglican Church. Thus it was appropriate that a brilliant person of Bro Timothy's ecclesiastical persuasion, should become Principal of the House at Oxford which bears his name.

On a lighter note, Jim Marr who features in the linked article, in 1965 told me a  humorous story about former Australian Governor General and famous soldier, Field Marshall Sir William Slim. Slim made an official visit to Canberra Grammar School when I was in my last year there and spoke to the senior boys. I have never been in the company of a man with such tremendous presence. You could literally have heard a pin drop whilst he was speaking to us. As he left the School Library where his talk took place, he tapped the clerical collar of the Headmaster Canon (later Bishop) Garnsey and apologised for preaching us a sermon and suggested he should have been wearing one of those collars. (David Garnsey was a friend of Bro Timothy's and a fellow High Churchman).

But back to Jim Marr's, Slim story. According to Jim's information Slim had a most elaborate tattoo on his body, in the form of a full fox hunt! The horsemen coming up his chest, the hounds going over his shoulder and down his back and the fox disappearing into the obvious orifice! An English cousin of mine who was also a very senior British Army officer and knew Slim well, assured me that it isn't true.

My other favourite Slim story, which I think Jim Marr also told me and I am assured is true, is that one hot summer's day Slim's entourage was travelling out of Canberra somewhere and Slim in full military uniform suggested they stop at the pub they were passing and have a drink. As they entered the bar one of the locals, who had been there for some time, looked up at the the newcomers, saw this apparition in its shiny bright uniform coming through the door and exclaimed loudly "Jesus Christ"! With which Slim replied "No, Slim, Governor General".