Irrigators continue to benefit from lower barriers to trade in the Murray-Darling basin

8 May 2014

 The Australian Competition and Consumer Commission has released its fourth annual Water Monitoring Report for the Murray-Darling Basin (MDB) under the Water Act 2007.

The report details the impact of water market and water charge reforms on irrigation infrastructure operators (IIOs) and their customers throughout the MDB. These reforms reduced barriers to water trade and improved irrigators’ access to water markets outside of their irrigation area, particularly in NSW and South Australia.

“This report shows that the impact of these reforms has been significant for irrigators wanting more control over their water, and manageable for IIOs and their customers,” ACCC Chairman Rod Sims said.

The majority of irrigators who have ‘transformed’ their irrigation right into a tradeable water access entitlement are maintaining their connections to irrigation networks. These irrigators continue to contribute to the ongoing costs of maintaining this infrastructure and are still able to irrigate by purchasing seasonal water allocations when weather conditions and commodity prices are favourable.

“We are also witnessing a range of responses by IIOs to these changes, including the modernisation of their infrastructure with the assistance of the Australian Government,” Mr Sims added.

The Australian Government’s buyback and infrastructure water recovery programs continued to be a driver for the trade of water from IIO irrigation networks. However, the scale of these programs was smaller in 2012-13 compared to previous years and is likely to reduce further with the recently announced cap on water buybacks.

“In 2012-13, operators’ knowledge and application of the rules continued to improve. A key reason for this is the proactive approach to compliance that we have taken since the rules were introduced,” Mr Sims said.

The report also details the large variability in regulated infrastructure charges and tariff structures across Basin States, operators and water delivery infrastructure.

“Despite the significant progress made in addressing barriers to trade, there is still significant scope to improve the efficiency and scope of those water markets,” Mr Sims noted.

The fourth annual Water Monitoring Report for the Murray-Darling Basin is available here.

Release number: 
NR 106/14
ACCC Infocentre: 

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