Water buybacks a big success with irrigators

Last year we published a report called ‘Oversubscribed’ which busted some of the myths around water buybacks in the Murray-Darling Basin (MDB). We showed that irrigators were really keen to sell their water entitlements to the Commonwealth government, that every purchase tender had been oversubscribed and that irrigators were getting a premium price for their water. Now our findings have been spectacularly confirmed in a survey of irrigators commissioned by the federal Department of Sustainability, Environment, Water, Population and Communities (DSEWPAC).

DSEWPAC commissioned Marsden Jacobs Associates to conduct a  Survey of water entitlement sellers under the Restoring the Balance in the Murray-Darling Basin program.  Key points from the study include:

• Since 2007-08, around 3,150 irrigators in the MDB have sold water entitlements to the Commonwealth government – about 15% of all irrigators.
• 589 irrigators from across the MDB who had sold water to the government were interviewed for the study.
• 80% of the irrigators interviewed said the decision to sell some or all of their water to the government had been a positive decision.
• 60% had sold part of their water entitlement and continued to farm, 10% had sold all their water and continued to farm and 30% had sold all their water and exited farming.
• Of those irrigators who sold part of their entitlement, almost 50% said selling water had no consequences for farm production. 40% had increased their irrigation efficiency.
• Most irrigators sold water to the Commonwealth to generate cashflow – 30% used the money to reduce debt, 22% to supplement farm income and 8% to fund on farm improvement. These reasons have not changed significantly as water availability increased after the drought.
• Most of the money obtained by selling water was spent in the region where the irrigator lived – if reducing debt is included as ‘in the region’ about 95% of proceeds remained in the region.
• Irrigators who sell all their water to the Commonwealth do not always convert to dryland farming. Most retain their right to have water delivered and many purchase water on the temporary market or use groundwater to continue irrigating.
• Of the 158 irrigators who had sold all their water entitlements to the government and exited farming, only 4 had left the region where their farm was located.
• About half of irrigators sold to the government because they thought they would receive a higher price than on the open market, although they did not agree with the environmental objectives of the Restoring the Balance (RtB) program.
• Despite the lack of support for the RtB program objectives, over half of all survey respondents said they wanted general buyback tenders to resume in the southern MDB. Only 25% reported that they did not want tenders to resume. 50% of respondents in Victoria and NSW said they would consider selling water to the Commonwealth again.

So all the stories that irrigators are unwilling to sell water to the Commonwealth and that buybacks for environmental purposes are destroying rural communities are exactly that – stories. The evidence paints a very different picture – selling water to the government to restore rivers to health has been a positive experience for irrigators and most of them would do it again.

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