Irrigators lining up to sell their water for the environment

A new report on the Commonwealth Government’s voluntary environmental water buyback program in the Murray-Darling Basin shows irrigators are lining up to sell their water entitlements.

The report by Environment Victoria evaluates the success of the Commonwealth’s ‘Restoring the Balance’ water buyback program over the last four years and finds that every single purchasing round has received more offers than the government has been able to accept.

“The water buyback program has copped a lot of criticism, but the truth of the matter is there are plenty of irrigators who are keen to sell their water entitlements,” said Environment Victoria CEO Kelly O’Shanassy.

“Voluntary water buybacks have been so popular that some farmers have been unable to sell their water as the purchasing rounds have become oversubscribed.

“Not only is voluntary water buyback the most cost-efficient way of returning water to the environment, it has many benefits for farmers and rural communities as it improves business flexibility and allows farmers to get a premium price for their water.

“Opponents of water buyback say it will shut down the irrigation sector but just the opposite has occurred. Most farmers have sold only a portion of their water, freeing up funds to invest capital in their businesses or retire debt.

“Every evidenced-based review of the water buy-back scheme has found that it’s good for the environment and provides opportunities for farmers. It’s a real win-win!

“Unfortunately, many irrigators are reluctant to speak out in support of the buyback program because of the heightened debate over the Murray-Darling Basin Plan, but this report shows there is plenty of demand out there for it to continue.”

The ‘Oversubscribed’ report shows that:

• The Commonwealth has purchased more than 1000 billion litres of water through nine separate tender rounds since 2007-08 and every one has been oversubscribed, several by a large number of potential sellers;
• More than two-thirds of sellers have sold only a portion of their entitlement, indicating they are intending to remain in irrigation and are selling their water to improve business flexibility;
• Where irrigators are choosing to sell all their water and exit the industry, selling to the Commonwealth means they get a premium price;
• There is no evidence that the buyback program is contributing to the much discussed ‘Swiss cheese’ effect, or undermining the viability of irrigation districts, as more than two-thirds of entitlement sellers are likely to remain doing what they’ve always done, but more efficiently and with more cash in their pockets.