Qld: Cotton brawl has many threads

AAP General News (Australia)
08-20-2009
Qld: Cotton brawl has many threads

By Paul Osborne

BRISBANE, Aug 20 AAP - Seven hours southwest of Brisbane lies a dilemma.

A cotton farm with the unassuming name of Cubbie Station is up for sale.

Ordinarily, this would merely be the subject of discussion around homestead dinner
tables and in the boardrooms of corporations keen to expand their rural interests.

But Cubbie is no ordinary cotton farm.

It is Australia's biggest and sits at the northern end of one of the country's most
heavily debated environmental icons - the ailing Murray-Darling river system.

Not only that, a large portion of the region's families depend on its fortunes for jobs.

Cubbie's owners want at least $450 million for the 93,000ha property, which can produce
around 300,000 bales of cotton and 22,500 tonnes of wheat in a good year.

The massive cotton farm, which lies on the Culgoa River, can divert and store enough
water to fill Sydney Harbour with some left over - 538 billion litres. But it currently
holds about 20 billion litres in storage.

Jones Lang LaSalle managing director Stephen Conry, the agent for the property which
is out for tender, says he expects it to attract global interest.

"Cubbie is a piece of Australian rural history, as a major world producer of high quality
cotton and as one of the largest singular irrigation developments within Australia," Mr
Conry says.

Cubbie Station chairman Keith De Lacy says the Cubbie Group planned to reduce its debt
- which he admits are not sustainable in the long term after only one good year in seven
- and recapitalise the business once it is sold, before pursuing other opportunities in
agriculture.

But behind the sales pitch lies a political football.

In 2002, then prime minister John Howard's federal cabinet foiled a plan by Queensland
premier Peter Beattie to acquire the property in order to return the water back to the
Murray-Darling river system in the form of "environmental flows".

This was despite Mr Beattie citing a scientific study that he said showed millions
of hectares of southern Queensland was in danger of being wasted by salinity within three
to five decades if action was not taken.

The issue of a buyout emerged again in 2006 when western NSW mayors, federal Liberal
MPs and green groups resurrected the idea.

But a meeting between Mr Howard and four state leaders in Canberra in November of that
year ended with the prime minister saying he did not believe a buyout was a "silver bullet"

to solving the Murray-Darling's problems.

Cubbie Station co-director John Grabbe said at the time the science showed the folly
of any buyout for environmental flows.

He argued Cubbie Station only extracted 0.28 of one per cent of the Murray's flow and
Queensland as a whole represented only about five per cent of total diversions from the
basin.

Mr Grabbe said if interstate authorities wanted to contribute to saving the river system
they could start by improving the management of their own lakes and rivers, which lost
almost as much water to evaporation as was taken out of the system by irrigation farmers
each year.

This time around Mr Beattie's successor, Anna Bligh, is also championing the cause of a buyout.

She says the sale of Cubbie is a real opportunity for the federal, NSW and Queensland
governments to conserve water - through buying it as a whole or just its water allocations.

While the asking price is beyond what Queensland could pay, Ms Bligh says governments
could join forces on the issue.

Federal Water Minister Penny Wong says she's happy to talk with Cubbie's owners about
buying the property.

"In relation to this or any other purchase, the government is open to talking with
any willing sellers of water entitlements in the basin," Senator Wong told federal parliament
this week.

"We will assess any sell offer through our buy-back program on the basis of value for
money and environmental need."

The federal government has set aside $3.1 billion to buy farmers' water rights to save
the drought-ravaged basin.

But Senator Wong has pointed to a potential problem with buying the property - its
land and water are being sold as one package, whereas the government prefers buying the
water alone.

However, Queensland laws do not allow the dislocation of water rights from properties.

But the laws are currently being challenged in the courts and the Queensland premier
is seeking a way of fast-tracking the case before Cubbie's owners find a buyer.

With the hearing likely around September or October, Ms Bligh says she would be surprised
if any buyer could settle in the meantime and expects they would want the legal issue
resolved.

She has received backing for the buyout from southern cousins.

South Australian Murray Irrigators group chairman Tim Whetstone says a buyout by the
federal government is the best option, allowing thousands of litres of water to flow down
the Murray-Darling system.

"At the moment I think the federal government is the only group that has the capacity,
that sort of money that I understand Cubbie Station is for sale for," he told ABC Radio.

The irrigators are backed by South Australia's Water Minister Karlene Maywald, but
she says guarantees are needed that the water will have environmental benefits and is
not siphoned off downstream by farmers.

Arlene Buchan, healthy rivers coordinator with the Australian Conservation Foundation,
says it would be a good idea to buy the property.

"It's a golden opportunity for the commonwealth to acquire a huge amount of water from
Cubbie Station, which has been a thorn in the side of governments for more than a decade,
because it takes so much water," Dr Buchan tells AAP.

Opposition Leader Malcolm Turnbull has urged the government to "look at it carefully",
and says the money might be better spent helping farms conserve water.

The opposition is also concerned the government would end up buying "phantom water"

- rights to water that doesn't exist.

However, there is strong opposition to the buyout and history shows the opponents have
a track record of getting their way.

Locals in the Dirrinbandi and St George areas say they fear losing their jobs and witnessing
the death of their communities if the property does not continue being a productive cotton
and grain farm.

Cubbie employs hundreds of seasonal workers, who in turn spend their money with local
businesses, and the company supports many community organisations.

"It's not only about water," says Balonne mayor Donna Stewart. "It would affect people's
livelihoods and close businesses."

Mr De Lacy, a former Queensland treasurer, says closing the operation would be a "disaster"

for the region and the state in economic terms.

Nationals Senate Leader Barnaby Joyce, who lives in the area, says the future of the
local community must be a key consideration.

"If the government intends to buy Cubbie then it should buy the whole town," he told
reporters in Canberra on Monday.

Influential senators Nick Xenophon and Bill Heffernan want a parliamentary inquiry
to look at the issue of Murray-Darling sustainability before any taxpayers' money is "wasted"

on Cubbie.

Meanwhile, the cotton brawl continues to unravel.

AAP pjo/sn/bwl

KEYWORD: CUBBIE (AAP NEWSFEATURE)

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