Agriculture Reference
In-Depth Information
Conclusion
There is a need to develop comprehensive policies to enable an equitable adjustment
in impacted rural communities, not just irrigators, and to provide support mechanisms
that will allow communities to survive the rapid adjustment associated with water policy
changes. This may include being giving an opportunity for businesses in the agricultural
supply chain to adapt to new land uses, populations and economies.
While policy tools should not attempt to interfere with the direction of structural
adjustment, they should expand the abilities of rural communities to take advantage of the
opportunities opened up through structural adjustment. For example, policy tools should
not prop up farm businesses that are no longer profitable, but they should enable
businesses affected by structural changes to access resources needed to shift their
operations accordingly, say from servicing an irrigation industry to servicing a forestry
industry, potentially in another location.
Policy instruments can be designed to “adjust” the rest of the non-irrigator
community that supports the irrigator, who is the initial restructuring target.
Is there a better method of allocating a restructuring package?
Are there economic models for mitigating the temporary negative effects of water
policies on third party businesses in the agri-business demand chain? If not, can we
build them, and would they be useful in developing policies that protect water resources
and the environments that are water-dependant?
In order to encourage thought and discussion, it is suggested that any model designed
to provide a more equitable distribution of restructuring funding should take into account
the following:
Adjustment assistance would only apply to permanent water entitlements, not
opportunistic water access.
Impact on the third party business would have to be demonstrable and immediate, with
a view to providing assistance that aims at enabling the business to make permanent
adjustments, for example grants for new plant to service a new industry in the area, or to
expand operations to cover a larger geographic area, which now has fewer irrigators per
acre.
Adjustment assistance aimed at easing the adjustment needed in social capital would
have to demonstrably assist communities in ways that increased their economic
adjustment to their new environment. For example, assistance might be available to
retrain the local labour force, previously available to harvest irrigated crops, to now
manage tourism or other local growth areas.
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