One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

&nbsp;

&nbsp;

fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

&nbsp;

FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
&nbsp;

&nbsp;

&nbsp;

&nbsp;

&nbsp;

First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

Drought

<html><body>
GUEST OBSERVATION
Australia has one of the most sophisticated water markets in the world, particularly notable for the ways in which government can return water to the environment.
Water markets allow the return of this water through two main mechanisms. The first is buybacks, in which the government purchases water licences directly from willing irrigators via an open tender process.
The second involves subsidising irrigation infrastructure on (and off) farms to improve water efficiency, with a percentage of the assumed water savings being transferred to a licence held by the government.
However, open tender buybacks essentially <a href="https://www.theguardian.com/world/2014/feb/27/murray-darling-basin-deal-caps-water-buybacks" target="_blank">stopped in 2014</a> in favour of infrastructure projects. This was due to the widespread belief that buybacks were inflating the price of water and causing economic hardship in rural communities.
Our research, published in <a href="https://www.sciencedirect.com/science/article/pii/S0928765518304585" target="_blank">Resource and Energy Economics</a>, set out to test this assumption of the impact of water recovery on water markets. We found that water scarcity (due to seasonal change or water allocation reductions) had far more influence on water prices than government water recovery. In fact, voluntary, open tender buybacks are the most cost-effective and low-risk option for increasing river flow.
By ignoring this option, we are hamstringing Australia’s ability to flexibly cope with drought conditions and long-term climate change.
Lessons from 20 years of data
My colleagues and I wanted to understand the impact of government water recovery on the Murray-Darling Basin’s water markets. To do so, we needed to understand the dynamics and drivers of the markets both before and after buybacks began.
We looked at monthly prices over twenty years in the Goulburn catchment in Victoria (<a href="https://www.mdba.gov.au/managing-water/water-markets-trade/interstate-water-trade" target="_blank">1A Greater Goulburn</a>) - both for permanent water markets (where a water licence is permanently transferred) and temporary ones (a seasonal transfer of water).
<a href="https://images.theconversation.com/files/295324/original/file-20191002-49365-xmv3hp.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/295324/original/file-20191002-49365-xmv3hp.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
The drivers of water market prices in temporary and permanent water markets are different, but market dynamics are similar: market volatility shocks go from prices to volumes.
<a href="https://images.theconversation.com/files/295325/original/file-20191002-49404-n8hk9p.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/295325/original/file-20191002-49404-n8hk9p.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Temporary water trade is driven by water scarcity, caused by factors such as seasonal fluctuation in water allocated to licences and the weather. Conversely, permanent water trade is influenced by a combination of past prices and temporary water prices.
What about government intervention?
We found no evidence that government water recovery influenced water prices in either market in a statistically significantly way.
However, we did find that increases in the amount of water recovered by the government reduced the volume of temporary water traded. This is probably due to the fact that many irrigators who sold water to the government had been <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1759-3441.12038" target="_blank">selling surplus temporary water</a>, and this volume was then taken out of the market.
We also found that government water recovery increased the volatility of temporary market prices and volumes, signalling potential increased risk and uncertainty for irrigators engaging in temporary water markets.
These results are significantly different to previous estimates by consultants, some of which suggest government buybacks cause <a href="http://rmcg.com.au/app/uploads/2017/01/Basin-Plan-Impact-GMID_Final_14-October-2016.pdf" target="_blank">temporary water market prices to double</a>.
Our findings contradict this. Our results are in line with and reinforce other peer-reviewed economic literature, which has shown buyback of water entitlements had <a href="https://mdbrcsa.govcms.gov.au/sites/g/files/net3846/f/mdbrc-submission-professor-sarah-wheeler-sa.pdf?v=1527826747" target="_blank">far less impact on rural communities than commonly claimed</a>.
This is partly because government buybacks simply do not create large enough changes in the amount of seasonal water available to affect prices, given that variability. A 1% increase in water buybacks caused a 0.1% drop in temporary water volume traded. In addition, farmers are very good at adapting to changes in water, and have a number of strategies and options available to them in most years.
Unfortunately, commonly held perceptions about the impacts of buyback on rural communities and water markets has had serious policy ramifications.
Irrigation schemes are not enough
As noted earlier, buybacks are now off the table. Funding for water recovery is now directed exclusively to infrastructure projects, which are deficient in a number of key respects.
Since water buybacks started in 2008, A$2.5 billion has been spent to recover 1,227 gigalitres of water licences. At the same time, A$3.9 billion has been spent so far on things like lining channels and building dams, which has saved <a href="http://www.agriculture.gov.au/water/mdb/progress-recovery/progress-of-water-recovery" target="_blank">695 gigalitres</a>.
Water recovery by infrastructure schemes now cost at <a href="https://www.annualreviews.org/doi/full/10.1146/annurev-resource-100517-023039" target="_blank">least three times</a> as much as buybacks per megalitre recovered. These infrastructure projects <a href="https://theconversation.com/paddling-blind-why-we-urgently-need-a-water-audit-122118">may not</a> return as much water to the environment as assumed, while they also also create the risk of <a href="https://wentworthgroup.org/wp-content/uploads/2018/05/Requirements-for-SDL-adjustment.pdf" target="_blank">environmental harm</a>.
Irrigation infrastructure <a href="http://www.fao.org/3/I7090EN/i7090en.pdf" target="_blank">subsidies</a> can also expand total irrigation areas and increase water use, and encourage a conversion from seasonal crops to permanent plantings such as orchard trees. These permanent crops demand a fixed amount of water every year, making farms less adaptable in the face of drought and climate change.
How did policy get this wrong?
The results of our water market study show that there are key differences between high quality, peer-reviewed economic science on the one hand, and short-term consultancies and people’s perceptions on the other.
High quality economic science takes time, expertise and requires reputable, consistent and long-term datasets that control for the myriad of influences on economic change. Short-term consultancies and inquiries (such as the Northern Basin Review) are often rushed, not representative and are often not based on reliable datasets.
Inquiries also often amplify the voices of <a href="https://www.sciencedirect.com/science/article/abs/pii/S026483771630401X" target="_blank">lobby groups and the people who are most aggrieved</a> by water recovery, while other voices – floodplain irrigators, indigenous representatives, irrigators who want water reallocated to the environment – may be <a href="https://www.smh.com.au/environment/conservation/the-thirsty-giants-killing-our-rivers-20190411-p51d4j" target="_blank">silenced</a>.
There are currently two inquiries looking at <a href="https://www.accc.gov.au/focus-areas/inquiries/inquiry-into-murray-darling-basin-water-markets" target="_blank">water markets</a> and <a href="https://www.basin-socio-economic.com.au/" target="_blank">socio-economic conditions in the basin</a>. It is vitally important they capture all voices equally and are supplemented by independent, high quality analysis.
If we can’t understand the real drivers of change in the Basin, we can’t identify the best options for improving the social and economic health of its communities – particularly in the face of drought and climate change.<img src="https://counter.theconversation.com/content/124491/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Sarah Ann Wheeler, Professor in Water Economics, University of Adelaide.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/scarcity-drives-water-prices-not-government-water-recovery-new-research-124491" target="_blank">original article</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Scarcity drives water prices, not government water recovery: Sarah Ann Wheeler

<html><body>
GUEST OBSERVATION
The bipartisan parliamentary vote to transform the A$3.9 billion Building Australia Fund into a pot of cash to drought-proof Australia, the <a href="https://www.farmonline.com.au/story/6287475/future-drought-fund-to-pass-final-hurdle-in-parliament/" target="_blank">Future Drought Fund</a>, should not be taken as universal endorsement.
Labor opposed the idea before caving in, saying it did not “<a href="https://www.canberratimes.com.au/story/6288761/drought-proofing-fund-to-pass-parliament/?cs=14231" target="_blank">want to be painted as a party that opposes support for farmers</a>”.
Rather, it simply shows that Australian politicians coalesce on some things: few miss the opportunity to be photographed with an affectionate child, and even fewer are willing to be critical of public funds being handed to drought-stricken farmers.
But support for something (or feeling too scared not to oppose something), doesn’t necessarily make it the right policy.
Australian governments have sought to drought-proof parts of inland Australia through publicly funded irrigation schemes for much of the past century.
Whenever dryland farmers experienced drought, they were viewed as having experienced a natural disaster, even though the variability of dryland rains was well understood.
Then, from the 1960s, things changed.
First there was a growing realisation that public monies spent on irrigation were not the best means of dealing with a variable climate.
We’ve moved away from thinking about drought as disaster
Second, governments started to describe drought differently, culminating in a 1992 National Drought Policy that required farmers to be more self-reliant and absorb the impacts of drought as something to be expected.
The decades that followed continued this trend with all states and the Commonwealth agreeing on national principles in 2013. Concessional loans and a farm management deposit scheme with taxation advantages were available to help farmers, but would only be useful to those that were viable in the long term.
A <a href="https://www.humanservices.gov.au/individuals/services/centrelink/farm-household-allowance/how-much-you-can-get" target="_blank">Farm Household Allowance</a>, set at the level of Newstart and available for up to four years in return for setting out a plan to improve the farmer’s financial circumstances, was also introduced in 2015 and refined in 2018.
Part of the thinking was that climate change is expected to make droughts more common and severe, although there are good reasons for encouraging adaptation to the existing climate in any case.
However, getting the balance right between “supporting” farm businesses and encouraging them to adapt and be self-reliant isn’t straightforward, especially when the climate and political cycles coincide.
It’s hard to imagine politicians being fiscally prudent when they know they have access to a drought slush fund and are heading into an election during a drying phase.
So, what’s wrong with the new drought fund?
First, there is mounting evidence that farm businesses can actually benefit from drought in the longer term. This seems to occur because businesses that go through a drought develop coping strategies that when invoked in good years produce much greater profits.
That is not to say that droughts are financially a good thing – but it does mean that shielding farm businesses from drought runs the risk that they will not adapt.
Second, an obsession with drought undoes much of the good work done in reclassifying it as something to be expected rather than a natural disaster. Nearly all of the natural disaster payments made in the decade leading up to 2012-13 – one of the driest on record – were spent on rebuilding after floods and storms rather than droughts.
Third, while repurposing the Building Australia Fund as the Future Drought Fund is designed to appeal to rural and regional voters, it is unlikely to help them. Agriculture simply does not generate the jobs that it once did and public pronouncements about drought-proofing will not change the underlying economics of farm businesses and regional communities.
Farming is generally helped by scale, and that means bigger farms with bigger machines displacing smaller farms. The upshot is fewer jobs and the shutdown of small towns, allowing only the larger regional centres to survive. Finding ways to manage this social phenomenon should be the priority rather than shielding farms from drought.
But it’s hard to be optimistic. Politicians love handing cheques to farmers as much as they love photographs with adoring children.<img src="https://counter.theconversation.com/content/121744/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Lin Crase, Professor of Economics and Head of School, University of South Australia.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/just-because-both-sides-support-drought-relief-doesnt-mean-its-right-121744" target="_blank">original article</a>.
</body></html>

Just because both sides support drought relief, doesn’t mean it’s right: Lin Crase

<html><body>
The government will invest $78 million for water initiatives to help drought-affected communities in NSW. 
Minister for Water, Property and Housing Melinda Pavey, alongside Member for Dubbo Dugald Saunders announced the investment would go to communities facing water shortages and water restrictions in the Macquarie valley. 
“NSW is experiencing the worst drought on record, and the NSW Government is continuing to work with communities to safeguard town water by investing in critical water initiatives, including new infrastructure,” Pavey said. 
“In June, I wrote to every Mayor in the state about the drought situation and how the NSW Government can support them as the water utility provider. This package is part of our support for our rural communities."
The package in the Macquarie Valley includes: 
<ul type="disc">
<li>$10.89 million for the staged delivery of four critical projects that extend limited available supplies for Dubbo, Wellington, Nyngan and Cobar</li>
<li>$270,000 for Gilgandra Shire Council’s Tooraweenah New Bore project</li>
<li>Up to $5.5 million to partner with Orange City Council to plan for and deliver critical drought initiatives for their community such as pumping stations to enable the use of the Cowra to Orange pipeline</li>
<li>Up to $2 million to partner with Bathurst Regional Council plan for alternate water supplies </li>
<li>Further funding to partner with Councils in the region, such as Parkes Shire Council, to review drought management plans and assist Councils with water efficiency projects and other initiatives required to help their community </li>
<li>$30 million already allocated to Dubbo Regional Council to enhance their access to groundwater</li>
<li>$2 million to already allocated to Narromine Shire Council improve Narromine’s access to deeper groundwater</li>
<li>$2 million already allocated to Bogan Shire Council for critical maintenance of the Albert Priest Channel, and,</li>
<li>$8.24 million to Bogan Shire Council from the Safe and Secure Water Program to design and construct a second water storage in Nyngan.  </li>
</ul>
“More than 40,000 people rely on the town water supply in Dubbo, with seven bores currently providing about 30% of the town’s water,” Pavey said. 
“The new initiatives come on top of the $30 million already allocated over two years for an expansion of the South Dubbo bore field that will improve groundwater supply to supplement town water and alleviate the impact of drought.
“Another town doing it tough is Narromine whose 3,500 residents are currently on level three water restrictions. Due to the drought, the yield of Council bores has decreased. We’ve allocated $2 million to improve Narromine’s access to deeper groundwater in the area.” 
The announcement is part of the $78 million critical drought initiatives that will see WaterNSW immediately build critical drought projects in the Macquarie, Upper Namoi, Peel and Border Rivers valleys. Funding will also go to partnership programs with local Councils in Tenterfield, Parkes, Gilgandra, Orange, Walcha and Bathurst.
“These communities, with a combined population of more than 180,000, are doing it the hardest. This infrastructure provide immediate benefit to the community,” Pavey said. 
Saunders said the impact of the drought is being felt beyond farms and into local communities. 
“Over $7 million will be invested to extend water availability in Macquarie River to Dubbo for over four months, with benefits being felt downstream of Burrendong and supporting major tourist attractions like the Taronga Western Plains Zoo,” Mr Saunders said.
“Dubbo is one of NSW biggest regional hubs; water security is vital to the town’s economy, local businesses and jobs.”
WaterNSW is investing in critical projects to extend water supplies in places like Dubbo, Cobar, Nyngan, Wellington and major employers, including the Western Plains Zoo, by at least another 10 months. 
The work will involve: 
<ul>
<li>Temporarily raising the Warren weir and building temporary structures in downstream creeks, </li>
<li>Planning for temporary pumping infrastructure that would be installed at Burrendong Dam to extract the water below the outlet valve, as a last resort,</li>
<li>Funding will also be made available to partner with Councils and plan for and deliver critical drought initiatives for towns like Orange, Bathurst, Tooraweenah and Parkes. </li>
</ul>
</body></html>

NSW Government announces emergency drought initiatives in Macquarie Valley 

<html><body>
Regional NSW towns are set for a boost, with the state government fast-tracking a swathe of new projects.
Some 22 major shovel ready projects will receive a total of $96 million from the NSW Government’s <a href="http://www.nsw.gov.au/droughtstimuluspackage" target="_blank">Drought Stimulus Package</a>, Deputy Premier and Minister for Regional NSW John Barilaro said.
“Farmers are being hit hard by drought and the impact of this drought is now reaching into our towns and cities, so it’s vital to support off-farm industries by driving business activity and generating new opportunities,” Barilaro said. 
“This funding will keep people in work by putting dollars into pay packets, cash that tradies, suppliers and other workers will spend at local businesses such as cafes, retail stores and local services to keep money flowing through towns when rivers are not. 
“Regional NSW is struggling through one of the worst droughts on record and every day the crippling impact extends further beyond the farm gate, so I’m pleased to announce these projects just one month after the stimulus package was announced.”
Projects to receive funding include a $4.25 million upgrade of four major road routes in Singleton LGA and $6.5 million for Scone Regional Airport upgrades.
Barilaro said further announcements will be made at Dubbo, Gilgandra, Coonamble, Nyngan, Cobar, Broken Hill, Orange, Bathurst, Gunnedah, Deniliquin, Merimbula, Hilltops LGA and Queanbeyan. 
“It’s important everyone in the bush, our farmers, families and businesses, know what NSW Government support is available to them, which is why I will personally deliver this new funding information to regional towns in the coming days,” Barilaro said.
The next set of projects to be funded from the Drought Stimulus Package is currently being assessed. 
</body></html>

NSW government approves $96 million in projects for drought hit regions

<html><body>
GUEST OBSERVATION
Water prices in the southern Murray-Darling Basin have reached their highest levels since the worst of the <a href="http://www.bom.gov.au/climate/updates/articles/a010-southern-rainfall-decline.shtml#toc1" target="_blank">Millennium drought</a> more than a decade ago.
These high water prices are causing much anxiety in the region, and have led the federal government to call on the Australian Competition and Consumer Commission to hold <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/rural/2019-05-30/new-water-minister-ready-for-accc-inquiry/11161730" target="_blank">an inquiry</a> into the water market.
Inevitably, whenever an important good becomes more expensive – be it housing, electricity or water – there is a rush to identify potential causes and culprits. In the past few years high water prices have been blamed on <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/rural/2019-03-25/foreign-owned-water-entitlement-register-reveals-key-countries/10923384" target="_blank">foreign investors</a>, <a href="https://www.theguardian.com/australia-news/2019/may/29/water-investment-companies-score-bumper-year-as-farmers-hit-by-drought" target="_blank">corporate speculators</a>, <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/rural/2019-03-09/irrigators-signal-electoral-challenge-in-safe-liberal-farrer/10852828" target="_blank">state government water-sharing rules</a>, <a href="https://www.afr.com/real-estate/commercial/development/murraydarling-water-scarcity-bites-almond-citrus-grape-growers-20190301-h1bw1n" target="_blank">new almond plantings</a> and the <a href="https://www.propertyobserver.com.au/https://amp.abc.net.au/article/10931366" target="_blank">Murray-Darling Basin Plan</a>.
While some of these factors have had an effect on the market, they are in many ways a distraction from the simpler truth: that high water prices have mostly been caused by a lack of rain.
Supply drives the market
<a href="https://images.theconversation.com/files/283224/original/file-20190709-51312-1bmd1r9.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/283224/original/file-20190709-51312-1bmd1r9.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt=""></a>
The waters of the northern basin run to the Darling River and the waters of the southern basin run to the Murray River.<a class="source" href="https://www.mdba.gov.au/discover-basin/landscape/geography"> </a>
Market reforms <a href="http://www.agriculture.gov.au/abares/publications/insights/snapshot-of-australian-water-markets#australian--water-markets-why-where-who-and-how" target="_blank">in the 1980s and 1990s</a> enabled water trading in many parts of Australia. By far the most active market exists in the southern Murray-Darling basin, which covers the Murray River and its tributaries in northern Victoria, southern New South Wales and eastern South Australia.
The market allows users – mostly irrigation farmers – to trade their water allocations (effectively shares of water in the rivers’ major dams). This trading helps ensure limited water supplies go to the farmers who value them the most, which can be crucial in times of drought.
Historical data shows the main driver of water market prices in the southern basin is <a href="http://www.agriculture.gov.au/abares/Documents/SnapshotOfAustralianWaterMarkets_v1.0.0.pdf" target="_blank">change in water supply</a>.
The following chart shows storage volumes (in orange) and water prices (in red) in the southern basin since 2006. Prices peaked at the height of the Millennium drought in 2007. During the floods of 2011, they fell near zero. Prices have increased again during the latest drought, and are now at their highest levels in a decade.
<img src="https://images.theconversation.com/files/283617/original/file-20190711-44497-ddror9.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Water allocation prices and storage volumes in the southern Murray-Darling Basin. State government trade registers, BOM, Ruralco Water, ABARES estimates.
Lower rainfall, higher temperatures
While water prices have always been higher in dry years and lower in wet, we’ve been getting a lot more dry years in recent decades.
Over the past 20 years, rainfall, run-off and stream flow in the southern basin has been far less than historical conditions.
The below chart shows modelled flow data for the Murray River, assuming historical weather conditions and no water extraction, over the past century. It shows that average water flows this century are about 40% below the average of the 20th century.
<img src="https://images.theconversation.com/files/283618/original/file-20190711-44497-1uafl1g.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Modelled ‘without-development’ annual Murray River flow, 1900 to 2018. Murray-Darling Basin Authority.
We know these reductions are at least partly <a href="http://www.seaci.org/publications/documents/SEACI-2Reports/SEACI_Phase2_SynthesisReport.pdf" target="_blank">related to climate change</a>, driven by both <a href="http://www.mssanz.org.au/modsim09/G5/cowan.pdf" target="_blank">reduced winter rainfall and higher temperatures</a>.
Lower rainfall and higher temperatures also make crops thirstier, increasing demand for irrigation water. This was evident in January, when temperatures <a href="https://www.weeklytimesnow.com.au/news/national/irrigation-demand-lower-murray-river-nearly-parched/news-story/4e1368e376e270c57ac58e09f4bc5c3a" target="_blank">exceeded 35℃ for 14 days</a> and irrigators’ demand for water spiked from about 4.5 gigalitres to 7 gigalitres a day.
The basin plan in perspective
The Murray-Darling Basin Plan seeks to improve the environmental health of the river system by recovering water rights from irrigation farmers. To date, more than <a href="http://www.agriculture.gov.au/water/mdb/progress-recovery/progress-of-water-recovery" target="_blank">1,700 gigalitres </a> of water rights – about 20% of annual water supply – have been recovered in the southern basin.
By reducing supply, water recovery was <a href="/news">always expected</a> to increase water prices. However, the effects of water recovery on supply – while significant – are still small relative to the effects of climate over the same period, as shown in the below chart.
<img src="https://images.theconversation.com/files/283619/original/file-20190711-44432-12kxnau.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Water allocation use in the southern basin with and without water recovery. State government agencies, Department of Agriculture, ABARES estimates.
Measuring the precise effect of water recovery on prices is difficult. Water buybacks are straightforward and have been modelled by <a href="/news">ABARES</a> and <a href="http://www.agriculture.gov.au/water/markets/supply-side-drivers" target="_blank">others</a>. But the effects of infrastructure programs – where farmers return a portion of their water rights in exchange for funding to upgrade infrastructure – <a href="/news">are harder to estimate</a>.
‘Carryover’ rule changes
Historically farmers had to use water allocations within a 12-month window. The introduction of “<a href="/news">carryover</a>” – most recently in Victoria in 2008 – means users can now hold their unused water in dams. This rule change was a good thing, as it encourages farmers to conserve water and build up a buffer against drought.
But it might also have contributed to anxiety about the water market’s operations.
Since water allocations can be bought and held for multiple years, information about future conditions can have a big effect on prices now. For example, we see large jumps in price following news of worse-than-expected <a href="https://www.weeklytimesnow.com.au/news/national/murray-darling-basin-water-prices-surge-to-550-a-megalitre/news-story/89b12d32d2136d11f48cbbf0f9c8ed0c" target="_blank">supply forecasts</a>. This may have helped fuel concern about “speculators”.
Over the longer-term, the ability to store water helps to <a href="http://www.agriculture.gov.au/abares/Documents/SnapshotOfAustralianWaterMarkets_v1.0.0.pdf" target="_blank">“smooth” water prices</a>, with slightly higher prices in most years offset by much lower prices in drought years. Again this is a good thing, but it may have added to the perception of higher prices in the market.
Water demand is rising
When a profitable new irrigation activity is willing to pay more for water – as is the case with <a href="https://www.theguardian.com/australia-news/2019/may/26/tough-nut-to-crack-the-almond-boom-and-its-drain-on-the-murray-darling" target="_blank">almond farms in the southern basin</a> – competition for limited supplies can potentially drive up prices.
ABARES’ research shows that <a href="http://www.agriculture.gov.au/abares/research-topics/water/future-scenarios-smdb" target="_blank">between 2003 and 2016</a> there was little change in irrigation demand (aside from that linked to rainfall). Growth in demand from expanding activities such as almonds and cotton was offset by reductions in others including dairy, rice and wine grapes. However, there is evidence since 2016 that demand for water has started to increase, <a href="http://www.agriculture.gov.au/abares/research-topics/water/water-market-outlook" target="_blank">contributing to higher water prices</a>. Longer-term projections suggest this trend <a href="https://waterregister.vic.gov.au/images/documents/Water_availability_fact_sheet.pdf" target="_blank">may continue</a>.
With drought and climate change reducing water supply, and demand for both environmental and irrigation water increasing, high water prices are only likely to become more common in the basin in future.<img src="https://counter.theconversation.com/content/119993/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/neal-hughes-360453" target="_blank">Neal Hughes</a>, Senior Economist, <a href="http://theconversation.com/institutions/australian-bureau-of-agricultural-and-resource-economics-and-sciences-abares-3697" target="_blank">Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/drought-and-climate-change-are-driving-high-water-prices-in-the-murray-darling-basin-119993" target="_blank">original article</a>.
</body></html>

Drought and climate change are driving high water prices in the Murray-Darling Basin: Neal Hughes

<html><body>
Severe drought conditions over much of Queensland has seen attention focused on properties which have some grass reserves, particularly in central western and north-western Queensland, according to the latest rural report from valuation firm Herron Todd White.
The report found that there was strong demand for grass and properties selling with adequate pasture reserves.
13 properties in the central western Queensland region have sold in the past three months, compared to 19 sales for the whole of 2018.
Values are well above previous levels by up to 25% or more for the odd isolated sales.
The valuers noted, "We are of the opinion that values are at or near a market peak and we caution that this possibly brief period of strong demand could be a short-lived price spike."
"However, given the widespread drought conditions that have been and still are being experienced over much of the region for the past five to seven years, maybe the region’s values are just playing catchup to other areas of the state," they stated.
Lack of grass has most likely prevented some producers from listing their properties for sale, but reasonable rainfall in some areas of the central west has given those producers wishing to sell an opportunity to get out.
The report said Iinitial demand was from drought-stricken producers in the Northern Territory and Queensland, with some New South Welshmen now heading north.
"Some properties have sold to sheep producers for the first time in nearly 30 years."
"Some of the recent sales have been to producers who have had expansion plans in mind, but drought conditions have brought matters to a head earlier than expected. Therefore, once seasons return to widespread favourable conditions, a lot of these recent sales may not hit the market again in the short-term," it concluded.
</body></html>

Western Queensland rural properties with grass reserves sell strongly: HTW Rural

<html><body>
Despite some significant rainfall in parts of the state this month, NSW continues to experience prolonged and widespread drought conditions.
On the NSW Combined Drought Indicator (CDI), 98.6% of the state is still in one of three drought categories.
Minister for Agriculture and Western NSW Adam Marshall said that while the rainfall was welcome, farmers across the state were still doing it incredibly tough.
“This rain will help ease conditions in some areas and is timely for winter crop sowing, but it is far from enough to represent a break from the drought,” Marshall said.
“While the west, north-west and south of the state received between 25 to 100 millimeters of rain at the end of last week, we’re still seeing 98.6% of the state in drought, which is only a minor decrease from 99.5% figure as at the end of March.
“I’m heartened by that improvement but the reality is we still require significant follow- up rainfalls to ensure any improvements are sustained and our rural communities start to feel a reprieve from one of the worst droughts in living memory.”
<a href="https://www.propertyobserver.com.au/images/2019/5/9/Rainfall%20map%20Week%20ending%205.5.19.jpg" target="_blank">Click here </a>to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/5/9/Rainfall%20map%20Week%20ending%205.5.19.jpg" alt="">
Source: NSW Government 
The latest CDI shows the Northern Tablelands, North West and Western Local Land Service regions remain the worst hit by ongoing dry conditions.
“Drought conditions are unrelenting and that’s why as Minister my number one priority right now is delivering a new drought funding package to provide our farming and rural communities with the support they need,” Marshall said.
“Over the coming weeks I’ll be getting out and about to chat to rural communities about what else the NSW Government can do to continue to provide much needed relief.”
To date the NSW Government’s Emergency Drought Relief Package has provided more than $1.5 billion in support and assistance measures to farmers and rural and regional communities.
</body></html>

Drought continues to bite in NSW despite welcomed widespread rain

<html><body>
GUEST OBSERVATION
This is an edited version of Steve Hatfield-Dodds’ opening address to the Bureau of Agricultural and Resource Economics <a href="http://www.agriculture.gov.au/abares/outlook" target="_blank">National Outlook Conference</a> to be delivered on 5 March 2019.
<hr>
The National Farmers Federation wants to lift the value of Australian agricultural production to <a href="https://www.talking2030.com/" target="_blank">$100 billion by 2030</a>.
While that might be possible – on the current trajectory it is forecast to reach $84 billion by 2030 – we should be mindful of the substantial, and sometimes painful, reforms that have been needed to achieve the growth we have in recent decades; and that <a href="http://www.agriculture.gov.au/abares/Documents/snapshot-australian-agriculture.pdf" target="_blank">price increases accounted for 90% of that past growth</a>.
Furthermore, the rate of productivity growth has been slowing. Key reasons include adverse shifts in climate and seasonal conditions, reduced investment in research relative to the value of production, and that fact that the easiest productivity gains have already been made.
This suggests nothing can be taken for granted.
Instead, we should recognise that achieving the best for agriculture, our rural communities and the national economy will require tough choices.
Making farming attractive to workers and investors
The sector is well aware of the need to attract workers with the right mix of skills, and is taking steps to do it. The <a href="http://www.agriculture.gov.au/about/reporting/budget/seasonal" target="_blank">2018 Budget</a> provided funds to improve our evidence base about labour force issues.
It is encouraging to see sector leaders <a href="https://www.farmonline.com.au/story/4412951/nff-urges-certification-scheme-to-watch-over-farm-labour-contractors/" target="_blank">acknowledging</a> the need to eliminate exploitation of workers, particularly seasonal workers and other vulnerable groups, but actions are always going to speak louder than words in ensuring a positive experience for farm workers.
Investment is crucial to lifting productivity and strengthening supply chains. Unfortunately agriculture faces some headwinds in attracting investment, including high seasonal variability relative to other nations and some persistent policy uncertainty.
This makes it crucial that Australia’s foreign investment rules are applied transparently and predictably, respecting <a href="https://archive.lowyinstitute.org/publications/lowy-institute-poll-2012-public-opinion-and-foreign-policy" target="_blank">community caution</a> that investment should deliver social and economic benefits, while maintaining Australia’s reputation as a <a href="https://cdn.tspace.gov.au/uploads/sites/79/2018/05/FIRB-16-17-Annual-Report.pdf" target="_blank">stable and attractive investment destination</a>.
Harnessing innovation
Australia is not immune to global shifts in research and development.
This includes <a href="http://www.agriculture.gov.au/abares/research-topics/productivity/related-research/rural-rde-investment" target="_blank">slower growth</a> in public R&amp;D, which in the past has provided the foundation for growth in private R&amp;D.
Our distinctive use of government and levy funded <a href="http://www.ruralrdc.com.au/about/" target="_blank">Research and Development Corporations</a> has served us well in the past, but needs some adjustment to ensure that the resources available deliver the best possible outcomes for agriculture and the nation as a whole.
Priorities should include reducing fragmentation and improving collaboration on “whole of sector” challenges, greater clarity and consistency around contributions and benefit sharing, and achieving faster adoption and commercialisation of successful research.
Promoting resilience
Australian farmers manage very significant variability, including variability in climate and prices. <a href="http://www.bom.gov.au/state-of-the-climate/" target="_blank">Climate variability is increasing</a> and extreme events, such as droughts and floods, are becoming more frequent and severe, impacting on output and incomes. Increased variability is also likely to contribute to more volatile global prices.
It is a good bet in these circumstances that future droughts and weather events will continue to trigger calls for government to do more to help famers. But policy makers should continue to be careful in how they respond, as poorly designed polices have the potential to slow farm adaption and structural adjustment, <a href="https://theconversation.com/helping-farmers-in-distress-doesnt-help-them-be-the-best-the-drought-relief-dilemma-105281" target="_blank">hurting productivity</a>.
Australia’s <a href="http://www.agriculture.gov.au/ag-farm-food/drought/drought-policy" target="_blank">national drought policy</a> rightly establishes a clear separation between promoting proper risk management by farm businesses and providing support to farm households and communities in need.
Eligibility criteria for the Farm Household Allowance are more generous than those that apply to income support available to other groups.
Programs such as the Farm Household Allowance, the Farm Management Deposit Scheme and tax concessions provide important relief for farm households and are consistent with Australian community values.
Overall, their current settings are unlikely to undermine resilience and drought preparedness or to have substantial adverse impact on agricultural productivity.
This is an achievement worth defending against well meaning – or occasionally self-interested – calls to blur the lines between household support and business assistance.
And we should always seek further improvements. Here the remaining policies that provide business assistance, such as concessional finance, need careful assessment.
Over time, the perceived need for such policies could be reduced by further development and uptake of market-based risk management tools, such as multi-peril crop insurance, and index-based insurance for cropping and livestock.
Persisting with water reforms
The Murray-Darling Basin Plan was inspired, in part, by the 2003 <a href="https://www.mdba.gov.au/sites/default/files/pubs/The-Living-Murray-story.pdf" target="_blank">Living Murray Initiative</a> and its vision of a “healthy working river” and in part by a reaction to the realities graphically exposed by the Millennium drought.
It was predicated on the conviction that healthy communities and regional economies required a healthy river, and that achieving it required substantial changes to water management.
<a href="https://ewater.org.au/archive/crcch/archive/pubs/pdfs/technical200205.pdf" target="_blank">These changes were twofold</a>: promoting water trading across the basin, which allows water to move to higher value uses and altering the balance between consumptive and environmental uses to achieve healthy river ecosystems.
This view that healthy industries require healthy catchments has not always been visible in recent debate and finger pointing, which is often framed in terms of trade-offs between “industry” or “development” versus the “environment”.
It is self evident that achieving the National Farmers Federation aspiration for agriculture will require sustainable management of scarce water resources.
Irrigated crops are one of the strongest growing agricultural sectors, with excellent future prospects. Realising the full potential of the irrigation sector will require clear and confident water policy settings which support the sector’s social licence, and avoid the uncertainty associated with acrimonious ongoing debate.
Respecting evolving consumer expectations
Staying ahead of the curve on consumer expectations sits at the heart of agriculture’s value proposition, reputation, and future growth – and can only be effectively led by industry.
Shifts in social expectations may well be both the greatest opportunity, and the greatest threat, facing Australian agriculture.
Rising real incomes allow consumers and citizens to care about issues they have previously ignored, and to express this care through their purchasing decisions and networks. These issues might be personal – such as health – or more general – such as concern for the environment or animal welfare.
Shifts in consumer sentiment can occur rapidly, and be difficult to predict. In 2016, for example, around 15% of milk consumers voted unexpectedly with their wallets by <a href="https://www.choice.com.au/food-and-drink/dairy/milk/articles/consumers-buying-more-branded-milk-to-support-farmers" target="_blank">shifting from cut price $1 milk to more expensive branded milk</a>, delivering an additional $100 million in sales revenue, in response to <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/rural/2017-01-27/understanding-the-dairy-crisis/8184510" target="_blank">concerns about the plight of dairy farmers</a>.
But capitalising on consumer concerns over the long term involves risks and hard work.
Back in 2003, Perth-based <a href="https://www.news.com.au/national/patagonian-toothfish-launched-on-australian-market/news-story/2b6215e724cc8a71c8cf3cffde50ee4c" target="_blank">Austral Fisheries caused some waves</a> when it set out to secure independent Marine Stewardship Council sustainability certification for Patagonian toothfish, as a first step in a sophisticated customer engagement strategy.
Their persistence paid off: today more than half the global catch is certified, its <a href="http://patagonian-toothfish-story.msc.org/" target="_blank">premium market position</a> has been restored and prices increased by around 300%.
Some shifts will involve more threats than opportunities, at least in the absence of stronger engagement by industry. Producers are particularly exposed on environmental and animal welfare issues, where real or perceived poor behaviour by a few players can tarnish the reputation or market access of an entire sector.
Assessing these risks and opportunities requires industry to understand how consumers think and feel, even when this is confronting.
As an example, debates about land clearing can be polarising, generating more heat than light. To be hard nosed about this, however, it is in industry’s interest to consider how the economic rewards of land clearing for some graziers stack-up against the potential risks to the reputation, social licence and market position of the industry nationally, and the various ways these risks could be managed.
Focusing on the main game
Australian agriculture has many advantages, and a track record of good performance, underpinned by tough choices.
If we continue in this tradition Australian agriculture will prosper, enhancing the well-being of producers, consumers, regions, and the nation.<img src="https://counter.theconversation.com/content/112857/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Steve Hatfield-Dodds, Executive Director, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/droughts-extreme-weather-and-empowered-consumers-mean-tough-choices-for-farmers-112857" target="_blank">original article</a>.
</body></html>

 Droughts, extreme weather and empowered consumers mean tough choices for farmers

<html><body>
GUEST OBSERVATION
On the eve of the recent National Drought Summit, prime minister Scott Morrison and deputy prime minister Michael McCormack visited Mulloon Creek near Canberra, shown recently on the ABC’s Australian Story. They were there to see a creek that was still flowing, and green with vegetation, despite seven months of drought.
Mulloon Creek was the legacy of a long collaboration between prominent agriculturalist Peter Andrews, and Tony Coote, the owner of the property who died in August. For decades they have implemented Andrews’ “natural sequence farming” system at Mulloon Creek.
Central to the system is slowing flow in the creek with “leaky weirs”. These force water back into the bed and banks of the creek, which rehydrates the floodplain. This rehydrated floodplain is then said to be more productive and sustainable.
McCormack, who is also the minister for infrastructure, transport and regional development, was impressed and declared the success of Mulloon as a “model for everyone … this needs to be replicated right around our nation”. The ABC program suggested this form of farming could reduce the impact of drought across Australia. So, what is the evidence?
The promise of natural sequence farming
There are plenty of anecdotes but little published science around the effectiveness of natural sequence farming. What there is describes some modest floodplain rehydration, little change to stream flows, some trapping of sediment and some improvements in soil condition. These results are encouraging but not miraculous.
How much each of the different components of natural sequence farming contributes is not always clear, and the economic arguments for widespread adoption are modest. At present, there is not the standard of evidence to support this farming method as a panacea for drought relief, as proposed by the deputy prime minister.
But if the evidence does emerge, why wouldn’t farmers simply adopt the methods as part of a sensible business model? Don’t all farmers want to do better in drought?
In the ABC show, and elsewhere, supporters of natural sequence farming argue that it is hard for farmers to adopt the methods because government regulations restrict use of willows, blackberries and other weeds, that they claim, are particularly effective in restoring streams.
Governments are correct to be wary of this call to use weeds, and some research suggests that native plants can do a similar job. This restriction on use of weeds might be galling for proponents of natural sequence farming but it should not be a fundamental impediment to adoption.
A more important frustration for natural sequence farming practitioners is how widely the approach can be applied. In Australian Story, John Ryan, a rural journalist, says:
"I am sick of politicians, farmers groups, and government departments telling me that Peter Andrews only works where you’ve got little creeks in a mountain valley … I’ve seen it work on flat-lands, steep lands, anywhere."
Natural sequence farming arose in the attempt to restore upland valleys and creeks in southern NSW that were once environmentally valuable chains of ponds or swampy meadows. But these waterways have become deeply incised, degraded, and disconnected from their floodplains. Not only does this incision produce a great deal of sediment pollution, but it produces many agricultural problems.
In reality, small and medium-sized stream systems across much of Australia have deepened after European settlement. If the leaky weirs of natural sequence farming are effective, then they could be applied across many gullied and incised streams across the country.
We’ve already been doing it
The good news is that landholders and governments have already been using aspects of natural sequence farming in those very gullies for decades to control erosion.
Since the 1970s, across the world, one useful method for controlling erosion has been grade-control structures. They were once made of concrete but are now usually made of dumped rock (called rock-chutes), and also logs.
<img src="https://images.theconversation.com/files/245122/original/file-20181112-83576-gdkx4q.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Rock chutes in Barwidgee Creek, 1992, Ovens River catchment, Victoria. Source: T McCormack NE Catchment Management Authority. T McCormack NE Catchment Management Authority <img src="https://images.theconversation.com/files/245124/original/file-20181112-83567-1nbqe1s.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
The same creek in 2002. It is now heavily vegetated and has pools of water, just like Mulloon Park. T McCormack NE Catchment Management Authority
These structures reduce the speed of water flow, trap sediment, encourage vegetation, and stop gullies from deepening. These are all goals of natural sequence farming using leaky weirs.
There are thousands of such structures, supported by government initiatives, across the Australian landscape acting as an unrecognised experiment in rehydration and drought protection.
Perhaps governments should already have evaluated these structures, but the rehydration potential of these works has not been recognised in the past. It is time that this public investment was scientifically evaluated.
We may find that natural sequence farming and the routine government construction of grade-control structures have similar effects on farmland and the environment.
But whatever the outcome, gully management is not likely to mark the end of drought in the Australian landscape.<img src="https://counter.theconversation.com/content/106232/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Ian Rutherfurd, Associate Professor in Geography, University of Melbourne.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-is-everyone-talking-about-natural-sequence-farming-106232" target="_blank">original article</a>.
</body></html>

Why is everyone talking about natural sequence farming?

<html><body>
GUEST OBSERVATION
While drought policy raises many complex emotional, political and policy issues, it can be helpful to think of it as an insurance problem: how can we best help farmers manage climate risk?
Drought insurance has been a long-standing goal and it’s easy to understand why. If viable, drought insurance markets could help farmers manage climate risk without the costs and potential side effects of government drought support.
Unfortunately, technical problems have hampered the development of drought insurance markets in Australia to date. However, there is hope that with improvements in technology and better data these problems could be solved, paving the way for a new generation of weather-based insurance products.
The missing market for drought insurance
Australia has well-functioning but limited markets for crop insurance. If hail or fire destroys a paddock, for example, an insured farmer will receive a payout for the value of the crop.
But multi-peril crop insurance – which covers a wide range of adverse events including drought – has failed to thrive in Australia. The international experience has been similarly uninspiring.
Many reviews have attributed these failures to information and participation problems.
Firstly, only the riskiest or most drought-prone farms may sign up for insurance (the adverse selection problem). Second, farms with insurance may put less effort into preparing for and managing drought (the moral hazard problem). Both these problems make insurance more costly to provide, resulting in higher premiums and lower uptake.
While these problems apply to all forms of insurance, they are particularly acute in agriculture, given the effects of drought will vary widely depending on farm-management decisions and detailed – and difficult to observe – farm characteristics such as the quality of land and livestock.
Subsidies are not the answer
Recently, farmers groups have called for tax breaks to promote multi-peril crop insurance.
Unfortunately, while tax incentives and other subsidies may increase uptake, there is no coherent case for providing more than normal tax deductibility. In fact, such subsidies could actually cause economic harm.
Insurance premiums provide important signals to farmers, promoting preparedness and adaptation. This includes promoting careful crop-planting decisions when drought risk is high. The inglorious record of farm crop insurance in the United States shows how things can go very wrong when insurance is subsidised.
It is not surprising that previous reviews have consistently recommended against insurance subsidies, while just last year the New South Wales government rejected a similar proposal.
Index-based insurance could be a way forward
One alternative, which has been receiving increased attention in recent years, is index-based insurance. Here payouts are based on weather data rather than an assessment of actual farm damages. For example, a farmer might receive a payout if rainfall falls below an agreed threshold.
Index-based products are largely immune to the information problems that plague standard insurance: insurers don’t need to spend time and money assessing each application, or monitoring farmers’ behaviour. Instead, insurers must solve the technical problem of designing an accurate index.
This index needs to be sensitive to the complex effects of weather on farms. In practice, the effect of a drought depends on many things. The amount of rainfall, its timing, the temperature and many other factors all interplay. If these factors are not taken into account, drought insurance runs into a “basis risk” problem: payouts don’t align with the climate risks faced by individual farms.
This basis risk problem is largely why index-based weather insurance products have struggled in Australia to date.
Drought insurance could be public or private
In recent years, governments have focused on promoting private drought insurance markets. However, public schemes are also possible and exist in many other countries.
A well-designed public drought insurance scheme – with premiums to cover costs – might have some advantages over private insurance. For example, governments may be better placed to absorb losses in years of severe widespread drought (although re-insurance markets might provide a way for the private sector to manage such risks).
However, public drought insurance schemes could, depending on their design, reduce demand for private insurance. This problem also extends to other forms of government drought relief: farmers may be less likely to pay for insurance if they suspect ad hoc drought assistance will be available.
Better data is essential
Ultimately, public and private insurance schemes face similar technical challenges. Solving these technical issues requires detailed data both on weather and farm outcomes.
Numerous reviews have cited data limitations as a key constraint on the Australian farm insurance sector. A recent review by ABS and ABARES highlighted the patchy and fragmented nature of existing government and industry agricultural data.
There is a good case for government to support the supply of this data, similar to the National Flood Risk Information Project established following the Australian 2011 floods. Investments in data are likely to have many applications beyond insurance, including the development of improved tools to support farm decision-making.
While drought insurance schemes have had mixed success to date, there remains some hope for the future. The emergence of “big data” collected from satellites and internet-enabled devices promises to revolutionise both farm production and risk management. In time, smart products underpinned by better data might finally help us solve the challenge of drought policy.<img src="https://counter.theconversation.com/content/106154/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Neal Hughes, Senior Economist, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/better-data-would-help-crack-the-drought-insurance-problem-106154" target="_blank">original article</a>.
</body></html>

Drought

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Drought

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News