The Federal Government is offering cash to communities in exchange for water buybacks, but lobby groups say it is not enough.
The VFF described the offer of $300 million for Murray-Darling Basin communities as a slap in the face.
VFF Water Council chair Andrew Leahy said the funding package announced by Federal Water Minister Tanya Plibersek would go nowhere close to what would be required to support communities targeted for water buybacks.
Under the Sustainable Communities Program, states will work directly with basin communities affected by voluntary water purchase, on investments that create and support local jobs and businesses.
Investments may include kickstarting or expanding industries in regional communities which are less water dependent, new community infrastructure projects, workforce development and community support services.
Mr Leahy said taking out $111 million of agricultural production every year and replacing it with a one-off $300 million package would do little more than paint some town halls.
“Ten years of lost agricultural production based on the government’s own flawed numbers would see over a $1 billion lost in agricultural production,” he said.
“Regional communities depend on thriving agricultural industries.
“A billion-dollar loss in agricultural output will result in schools having to close, and job losses across multiple industries. A $300 million sugar hit is no solution.”
Mr Leahy said despite the limitations in the economic analysis being relied upon by the government, their number still showed water buybacks reduced the water available for food production and would drive-up prices.
“ABARES found average water prices will increase by $53 per megalitre in northern Victoria, from $401 per megalitre to $454 per megalitre.
“There is about half of what other reports have estimated, because they assume water purchases of 225 Gl and not the full 450 Gl would only reduce water use by 133 Gl.
“They assume that groundwater use would increase to replace lost surface water. In practice we know that the basin plan caps groundwater use and suitable groundwater resources are simply not available in many areas.
“Despite the limitations of the ABARES report, they still find that Commonwealth water purchases hurt agriculture and rural communities.
“ABARES also cast significant doubt on other reports prepared by South Australian academics that trivialise economic impacts in NSW and Victoria.
“The VFF urges the Commonwealth to stop treating the basin plan as a political problem.
“It is time that Tanya Plibersek came to Victoria to really understand the full impacts of water purchase on farmers and communities and seriously address these impacts.”
National Irrigators’ Council chief executive officer Zara Lowien said the Federal Government was attempting to use the $300 million Sustainable Communities Program to divert attention from their addendum to the Murray-Darling Basin Plan regulatory impact assessment, which lacked transparency on the true cost of the basin plan to communities.
Ms Lowien is critical of the government’s narrow assessment, which avoids the true cost of the Murray-Darling Basin Plan.
“They’ve largely partitioned off any assessment of prior impacts, ignoring cumulative impacts and failing to provide regional or industry level assessment,” she said.
“Choosing to disregard the northern basin completely and only focusing on the broader southern basin allows for trade-offs between sellers and buyers in the connected market, and between communities by assuming people and jobs are transferable, which are not always the case.
“As a result, they make comments like on aggregate and on average, the impact is small.
“When in reality, the analysis looked at a maximum recovery of 325 Gl, ignoring the likely full recovery task that could be double that volume and the impact of the 2100 Gl already recovered.”
Mrs Lowien said the report failed to address concerns about cumulative impacts, which had been a key concern throughout the Restoring our Rivers debate and consultations.