Saturday, December 06, 2008

End of Historic Toorale Station

Tooralee Station

Today (Friday 5 December) saw the clearance sale on Toorale Station, a 91,000 plus hectare property at the junction of the Darling and Warrego Rivers 60k downstream from Bourke. The sale followed Toorale's purchase by the NSW Government with Federal assistance for a reported $23.7 million dollars.

This was one big sale. The station's 30,000 strong merino stud plus its 1,500 cattle had to be dispersed, the last wheat crop harvested and sent to silo, over 900 lots of farm machinery etc collected and presented for sale. All this has seen trucks scurrying across New England and beyond in one last big burst of economic activity.

Toorale HomesteadToorale Station occupies a special place in Australian history. It was first taken up by the Europeans in 1857. From 1880 to 1913 it was owned by the legendary Samuel (later Sir Samuel) McCaughey. At various times McCaughey owned or shared in twelve stations in New South Wales and three in Queensland with a total area of about 3,250,000 acres (1,315,242 ha).

The old shearing shed on Toorale was built in 1873 and in 1894, 265,000 sheep were shorn there. Until 1880, Toorale wool was taken to Adelaide by river barge.

In 1896, Sir Samuel McCaughey built a large homestead on Toorale for his favourite niece, Louisa, who was married to his manager, Mathew Robinson. The imported Italian marble fireplace in the Toorale Room at the Port of Bourke Hotel was "rescued" from the homestead which is now in ruins.

The Australian writer Henry Lawson (and here) arrived in Bourke by train in September 1892, his one way ticket plus 5 pounds having been proved by J F Archibald of 'The Bulletin'. He spent two months living in Bourke, then walked to Toorale with his mate, Jim Gordon, where they signed on as rouseabouts for the latter part of general shearing.

After about one month in the Toorale Shed, they walked back to Bourke via Gumbalie for Christmas 1892. They then spent six weeks walking to Hungerford on the Paroo River on the Queensland border, and back to Bourke. A round journey of 450 kilometres! Lawson then worked in Bourke for about four months, principally as a house painter, writing in his 'spare time'. He returned to Sydney on a train drover's ticket in June 1893, in charge of five trucks of cattle.

Some of Henry Lawson's works from this time include "A Stranger on the Darling", "The Darling River", "In the Storm That Is To Come", and "Bourke".

This is not going to make much difference in how much water is going to flow into the darling. I have lived at toorale my whole life and know how much water the property can store. The government buying this and letting the water flow through is only going to make the town of bourke suffer and many people will lose their jobs. It all sounds so good on paper and through the media but until you go out there you will never understand how little of a difference this will make... it is a bad move. Local blog comment from Ed.

The sale, the first major land and water purchase under the Federal Government's $3 billion National Water Plan, will see the station turned into a national park, its water entitlements returned to the Darling River, and dams on the Warrego River removed.

Toorale presently holds yearly extraction entitlements for 14 billion litres of water and proponents claim that the deal means an average of 20 gigalitres will be returned to the Darling River each year.

All this has generated very mixed views.

According to Federal Climate Change and Water Minister Penny Wong, it is a deal for the environment.

Well, this is all about taking action in the Murray-Darling Basin. We know that the rivers of the Murray-Darling Basin are in difficulty.

We know that we need to do more to return water to the river for the benefit of all of the communities which rely on these rivers for their livelihoods.

We also need to do more to improve the environmental health of these rivers.

The Minister's views are echoed by environmental groups, as well as some graziers down stream who hope to benefit. However, this support far from universal.

Some doubt that the sale will have any real impact on water flows in the river.

Prior to the sale, property manager Tony McManus argued that the quantity of water he's using for irrigation is minimal.

The amount of water we store here and we take here I think would have very little impact on the lower Darling and the Murray River.

I think it would only make the river run for a little bit longer and a little bit further and I think it would have more detrimental damage done to the district than the benefits to the environment.

I think it's just a knee-jerk reaction to something that's caused by drought and low rainfall.

Others argue that there are better approaches anyway, and that the whole deal is flawed.

The government is seriously in the process of incorporating cropping land in a national park. So any pretence that this might involve even the most rudimentary need to conserve the existing ecological or habitat values of that crop land is absurd in the extreme as there are few enduring habitat attributes of a ploughed field.

And all we are left with is a very unambiguous demonstration that the underlying intention is to remove humanity from that landscape at any and every opportunity.

There is more than 14 million hectares of vigorous regrowth in the NSW part of the MDB and many more millions of hectares of thickenned woodland in both public and private tenure.

The prudent thinning of this vegetation, to return the percentage canopy cover to its pre-settlement levels, will, according to the well tested science of Zhang and Vertessy et al, deliver significantly more than the claimed requirement for 1.5 million megalitres of additional river flow. Blog comment, Ian Mott

Locals worry about the impact on the town and district economy. Bourke's population has been falling, while the town has a large indigenous population. The sale means the loss of over $5 million in agricultural production, along with an estimated 100 jobs. This is roughly equivalent to Sydney losing 750,000 jobs.

Quoting Mr McManus again prior to the sale:

It's a wonderful property and we're producing food and fibre and I would hate to see it sold off and locked up as a national park.

I think it's such a magnificent property that can produce some magnificent food crops, some wool, beef, mutton.

I just think it's too good a property to be shut down and not used for Australia's production.

It is very difficult for to balance all these arguments in the absence of proper information. Certainly some of the reporting does not help:

THE NSW and federal governments have taken the unprecedented step of buying a massive water-hungry outback cotton station to transform it into a national park as part of an ambitious multi-billion-dollar plan to save the dying Murray-Darling Basin.

NSW last night paid $23.75million, with substantial commonwealth assistance, for the Toorale cotton station in northwest NSW, in a move that will boost flows to the parched Murray-Darling Basin by up to 80 gigalitres a year. Media report on sale. Bold added.

I think that we can say the following with a degree of certainty.

The phrase "Murray Darling Basin" is misleading. The biggest problems lie in the south along the bigger Murray River. The extent to which environmental flows far up stream on the Darling will have any effect on the water position down stream in South Australia is uncertain.

If we focus just on the Darling, it may be (as Minister Wong argues) that the agreement delivers a significant boost to environmental flows in the Darling River, whilst also providing a boost to the NSW reserve system. However, I haven't really seen any compelling evidence for this. I am not saying that it isn't there, just that I have not seen it.

The NSW Government recently introduced a horror mini-budget cutting services throughout regional NSW. It has been struggling even to pay day-to-day bills in the public hospital system. So its commitment comes at a big opportunity cost.

Very roughly speaking, the purchase cost $23.75 million. To this has to be added the cost of removing the dams on the Warrego and creating minimal national park facilities. Say for rough estimating purposes, $500,000, bringing the all-up capital cost to $24.25 million. At a conservative cost of funds of 6%, this equals an annual cost of $1.94 million.

The new National Park has to be maintained. Yes, I know that NSW is already struggling to maintain its national parks, but we have to assume that they are going to spend something. There may be some income from Park fees, but this is likely to be small. Just for rough calculation purposes, assume annual Park costs are about $200,000. This brings annual costs to $2.14 million.

Cessation of rural production on the property will reduce rural production by $5 million. Add this, and the annual cost of the purchase increases to $7.14 million.

At least some of those previously directly or indirectly employed will go onto benefits. This number will decline with time as either new jobs are created or more people leave the district.

Just for rough back of envelope purposes, lets add $300,000 in additional benefits payments for the first three years. Now we have an annual cost of $7.44 million, falling to $7.14 million after three years.

Is the value of water returned to the river worth this annual cost? I have no idea. I have never seen a cost-benefit analysis.

These numbers are not mean to be precise. They do indicate the need to be cautious in simply assuming that things like this purchase make sense.

Sources

This story has been mainly drawn from the following sources.

2 comments:

marcellous said...

Your figure of $5 million lost production appears to be a gross figure. Shouldn't you be using the net figure after costs of production?

We could start with direct costs of production and then we can talk about whether environmental degradation needs to be included as a cost of production or whether the avoidance of that can be counted as a countervailing benefit when we come to considering whether the cost is worth it.

Jim Belshaw said...

Thinking about it, I think that gross value of production is the right measure for this type of analysis. If you exclude input costs and just focus on value added you lose all the flow-on effects to the region and economy.

The inclusion of environmental costs depends on the purpose of measurement. There are some issues here that I need to think through because there is a double counting issue. The core environmental cost is reflected in the value of the water. So in calculating cost/benefits, you take the value of the water freed up on the benefits side of the equation.

You have to relate this to the market price of water. I say this because the same quantity of water with, presumably, the same environments benefits could have been acquired elsewhere.