Oversubcribed
Irrigators are lining up to sell their water to the environment!
In the last 4 years the Commonwealth Government has purchased over a thousand billion litres of water to help restore the rivers of the Murray-Darling Basin to health. They’ve copped a lot of criticism for doing so, but the truth of the matter is that the program is popular with irrigators and every single purchasing round in the Murray system has had more offers than the government has been able to accept.
There’s plenty of evidence (from sources as diverse as the Productivity Commission and the Wentworth Group of Concerned Scientists) that buying water from willing sellers is the most efficient and effective way of getting water back into river systems. Yet the buyback program has been regularly called into question on the grounds that sellers aren’t really willing, there aren’t enough of them or the buybacks are undermining the viability of irrigation districts.
Environment Victoria’s new report Oversubscribed; An analysis of the Commonwealth Government’s environmental water buyback programs busts some of the myths about water buyback and 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 with more efficiently and with more cash in their pockets.
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