Water for Food Group response to DEFRA consultation

by Tim Mudge

Making the most of every drop

Defra proposals for reforming the water abstraction management system of England & Wales

A response from the Water for Food group

1) What are your views on the proposal to convert seasonal licences into abstraction permissions based on water availability?
On balance we agree that the current system should be replaced by abstraction permissions based on water availability. However, our support is conditional on the creation of a new system that delivers equity in the treatment of all users in all sectors in terms of conditions and allocations and on reasonable and evidence-based levels of protection afforded to the environment.

A reformed system must recognise that farmers and growers need secure access to water to make long-term business investment in future food production.

Proposals to reform groundwater abstraction (which accounts for more than 40% of water use irrigation and is inadequately accounted for in these proposals) should be properly developed and subject to further scrutiny. For example, we would expect abstractions at high groundwater levels to be permitted at all times, not just outside periods of recharge.

We fully expect currently unlicensed use such as trickle irrigation, and licences which currently contain volumes allocated to trickle irrigation, to be fully incorporated into the new system.

We expect a revision in the regulatory approach to ‘consumptive use’ which, for example, currently penalises agricultural and horticultural abstraction but considers the bulk export of water from catchment management units to be non-consumptive.

Finally, devising solutions to water scarcity during dry conditions and drought must be a key part of this review process. In particular we believe that if government is serious in its commitment to equality amongst all users then it must abolish ‘section 57 restrictions’ (uniquely applied to spray irrigators) as part of the reform process so that ALL sectors are equally subject to restrictions at ‘very low flows.

2) What do you think about the different proposed approaches to linking abstraction to water availability for surface water and groundwater abstractions?
We are sympathetic to the aims but are concerned about the implications for charging which could become more complex, irregular and expensive. On the other hand there are good reasons to incentivise reservoir owners to take surplus (flood) water by making it freely available.

Ideas for aligning abstraction to availability are highly dependent on the storage of water. Incentives for reservoir construction must be offered. We doubt that the reform proposals by themselves will incentive farmers and growers to construct their own storage; the provision of taxation capital allowances will be crucial for this purpose. In some cases reservoirs provide an eco-system service by releasing summer flows for other users. This service has a cost which is not yet recognised by other users.

Many practicalities need to be addressed, not least what is meant by ‘availability’. For example, we are concerned that a change from allocation to availability will mean that in practice, less will be available.

3) Would it be helpful if abstraction conditions required abstractors to gradually reduce their abstraction at low flows before stopping, rather than being just on or off?
Yes, but there will be a need for all users in a catchment to understand abstraction ‘prospects’ for the year ahead at an early stage to encourage efficient forward planning and management. A ’traffic light system’ will help farmers and growers to plan with reasonable certainty.

4) Do you think the proposal to protect the environment using a regulatory minimum level at very low flows is reasonable? If not, how do you think we should protect the environment at very low flows?
Yes, but restrictions must be applied to ALL users and agricultural ‘section 57 restrictions’ should be abolished.

Closer scrutiny of the environmental needs of each catchment will be needed so that a potential proportionate reduction for environment needs is a part of the decision making process.

Where low levels (drought) are reached, special provisions for container-grown plants and protected cropping (such as salads and soft fruit) will be necessary.

5) What do you think of the proposal to require abstractors who discharge water close to where they take it from to continue to discharge a proportion in line with their current pattern?
We agree that provisions should continue.

6) How best do you think water company discharges should be regulated to provide reliable water for downstream abstraction without impacting on water quality objectives or constraining flexibility in water management?
This is a complex area needing further consideration.

7) If you are an abstractor, how would these charging proposals affect your business?
The charging mechanism should limit charges to the recovery of costs incurred in administering the system – charging must not become a tax raising measure.

Farmers and others engaged in vegetable washing processes may benefit from measures that accounted for discharges and net consumption.

We fear that charges will inevitably be levied to meet additional administration costs of a new system – the new system should be as simple as possible to minimise these costs.

8) To what extent would a system that charges abstractors partly on permitted volumes and partly on actual usage (a two-part tariff) encourage abstractors to use less water?
Most farmers and growers already benefit from ‘two-part tariff’ charging arrangements which combine licenced and used volumes. In this respect there will be no change. Farmers should benefit from low charge or no charge high flow water for filling reservoirs.

9) Would quicker and easier water trading benefit abstractors now? How beneficial do you think it would be to abstractors in the future?
Farmers view trading as an important tool in the efficient management of water but by no means the most important aspect of reform.

In principle quicker and easier trading will benefit farmers and growers now and in the future, but a workable system will be hard to deliver in practice.

We fear that the benefit of trading to farmers and growers will be outweighed and overshadowed by the claw-back of unused licenced volumes which Defra sees as essential to avoid adverse environmental impacts of new trading platforms.

New trading opportunities may be attractive for reservoir owners but are unlikely to be an incentive to construct reservoirs.

10) To what extent do you see additional benefits in the wider range of trades that can happen under the Water Shares option, compared to the Current System Plus option?
In principle ‘water shares’ offer added flexibility, particularly for groundwater, but their success depends on the implementation of a robust and inclusive structure for collaborative management of each catchment.

In practice, the shares option is likely to be too complex and too expensive and so we favour ‘current system plus’.

We are concerned about potential impact on food security if traded water is exported in bulk from the farming sector and potential ‘changes of water use’ from one sector to another need further consideration.

11) Do you agree that participation in abstraction trading should initially be limited to those with a direct interest in abstracting water?
Yes, absolutely. Parties with no direct interest in water should not be involved.

12) Do you support our proposals for a more consistent approach to making changes to abstraction conditions? If not how would you improve the proposals?
We are concerned about the impact of transition on small businesses which are hugely dependant on reliable access to water. The success of a new approach will depend on consistent implementation.

Reform should not be implemented in a given catchment until the Restoring Sustainable Abstraction (RSA) programme has dealt with the ‘over abstracted’ issues of the catchment.

A fair regime is then needed to deal with the ‘over licenced’ element of a catchment.

Reform should not be necessary in catchments where ‘water available’ status exists.

13) What notice periods do you think would best balance the needs of abstractors and the environment?
A six-year CAMS cycle may be sufficient for some businesses, but businesses that make major capital investments in water storage (for example) should be given greater security to reflect necessary return on that capital investment. In this case we would expect notice periods of two, three or even four CAMS cycles.

14) Do you support the proposal to remove the payment of compensation for changes to abstraction conditions and to phase out the collection of the Environmental Improvement Unit Charge through abstraction charges?

No. some abstractors will enjoy property rights which must be respected and will be eligible to compensation from the public purse – not from other abstractors – if those rights are eroded.

Transitional arrangements must seek to avoid detriment to licence holders which would inevitably trigger compensation claims.

The current EIUC regime must become more transparent in the collection and disbursement of the tax.

15) Do you agree it is important to take measures when moving licences into the new system that would protect the environment from risks of deterioration?
Yes, WFD ‘no deterioration’ is a factor in abstraction reform. But transition to a new system should not be a surrogate for resolving current unsustainability issues – that must remain the role of the RSA programme.

Reform should not be used as a blunt instrument to seize unused licence volume.

16) Would you prefer us to consider the risks in each catchment when designing the rules for moving licences into a new system, or should we treat all abstractors in the same way regardless of water availability?
We favour a catchment approach which focuses on the greater involvement of all stakeholders in local water governance.

17) What would be the most effective method to calculate the new annual limits to be transferred into the new system (for example average annual, average peak or a combination of actual and licensed volumes)? And what assessment period should be used to calculate them?
We believe that existing licensed volumes should be transferred to the new system.

Any revised method for allocating volumes must be based firmly on future business needs; such a process would involve a demonstration of need, determination on a case-by-case basis, and appeal provisions.

Any future discussion of volume transfer based on historic use must focus on peak use and include significant headroom.

18) Do you support the establishment of a water reserve to support economic growth?

No, licenced volume should remain with existing licence holders and there should be no claw-back. The needs of new businesses should be met by trading opportunities.