Southern Riverina News

To the Shareholders

Dear Shareholder

As most of you would be aware, this is my last week as both Chair of Murray Irrigation Ltd., and as a Director on the Board. I did not receive enough votes at the recent election to remain as a Director, and I respect this decision by Shareholders.

Going forward I will remain in our family’s farming business and it is therefore in my best interest, and yours, to ensure the foundations have been laid for Murray Irrigation Ltd. to continue operating in a manner that provides us with the maximum volumes of productive water at an affordable price. This has always been my priority on the Board.

In leaving the role as Chair, I believe it is important that my fellow Shareholders are provided with factual information around decisions that have been made by your Board.

Firstly, you need to be aware that at the end of the business modernisation process, the MIL Board made the right decision to not permanently sell part of the conveyance licence, instead deciding to annually lease or temporarily sell part of the under-utilised water. I firmly believe this was the right decision to financially stabilise the company, and one which I am proud to have supported.

I am also proud and honoured to have led a Board of Directors and management that opposes water buybacks and continues to work extremely hard to see irrigation flourish in this region for generations to come.

To achieve this we had to stabilise the company’s financial situation. Standalone fee increases, to a large degree, was the simplest and easiest option. These were discussed with Shareholder representative organisations including Southern Riverina Irrigators and the Landholder Associations, and we listened to their feedback when they said irrigators could not withstand further fee increases. Throughout my time as Chair I have tried always to work collaboratively with these organisations, as well as individual Shareholders, and take on board the comments that are made. As those who know me are aware, I’m not a confrontational person and I have always tried to achieve decisions in the best interest of Shareholders with a collaborative approach.

Our decision to increase annual water sales f rom $6 million to $10.8 million was considered the best way forward, and the fairest way to achieve the two goals that were imperative: firstly to keep fees at a reasonable level, while also ensuring the financial stability of your company. As Chairman, and with the support of fellow Directors, we acknowledged the internal resource management policy that determines how much water is sold, carried over or distributed to Shareholders through WaterWell has been too conservative in the past. This resulted in lost water and therefore lost income and we firmly believed this was a situation your Board should rectify.

As a result, we made changes to this policy which will allow additional water to be sold, while also retaining WaterWell’s f ree benefits. In our view, this approach was a much better option than allowing water to spill and be lost, while the company has significant financial losses.

Another difficult decision for your Board was increasing the operating budget of MIL f rom $26.5m to $30.5m, an increase of 15 per cent. As we know in our farm businesses, we have all faced significant cost increases f rom fuel, power, spare parts, wage etc. The list goes on. At Murray Irrigation, the Board’s priority was maintaining the level of service that our Shareholders expect. The company constantly has calls f rom Shareholders who may have an issue with their outlets, weeds in the channels and drainage system blocked etc. We cannot escape the fact that overcoming situations such as these costs money, but it must be done to retain service levels.

While an increase in the operating budget can be a difficult pill to swallow for the Board and our Shareholders, it was essential if we are to continue improving on-farm efficiencies, and thus saving water and helping you to grow more, which is our ultimate aim.

As a company, and as a broader community, we need to accept the indisputable fact that many of the challenges which Murray Irrigation and remaining irrigators are presently being forced to confront are due to the Murray-Darling Basin Plan. Some farmers have decided to sell their water and exit irrigation and as a result the cost of running the system is not spread across enough water use to share the load.

In years past there were more than one million megalitres regularly used per year across the Murray Irrigation footprint. Today it is half that. Inflation has driven costs for all of us much higher, at the same time as system usage has halved. This will only get worse if we have more buybacks.

Thus, as a parting message, I would like to thank fellow Directors as well as Murray Irrigation management, staff and shareholders for their support during both my time on the Board and especially during the challenging period in which I have been the Chair. I wish the incoming Board and Chair all the best, in arguably the most difficult environment we have ever been confronted with.

I encourage everyone to try and leave personalities aside and unite in the best interests of your company, our Shareholders and the broader community. We may not always agree, but we should always be respectful in our dialogue and appreciate that we all want farm and regional prosperity.

In particular, let’s join forces and show unity to oppose any future water buybacks.

If the Water Minister has her way and buybacks return, please think carefully before selling your water for the few extra dollars being offered by an Australian Government that does not prioritise farmers and rural communities. For the sake of our towns and these communities in which we all live, for the sake of local jobs, schools, health and various other services, stay strong and please make every effort to stay united and push back on buybacks.

That is the only way we can all continue to survive and hopefully prosper.

Yours faithfully

Noel Baxter

Outgoing Chair – Murray Irrigation Ltd





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