The quick and the dead

Water brokers and irrigators knew they would face stiff competition to buy and sell water last Thursday when inter-valley trade opened from the Murrumbidgee to the Murray – but they didn’t expect a complete wipeout. 

In record time Wagga Wagga broker Tom Wilks snared the entire 15 gigalitre initial trade limit in three clicks of his mouse. All other prospective applicants, who collectively applied for 147GL, missed out.

“It’s the fastest finger first,” Mr Wilks said.

Competition was fierce due to the favourable price differential between the Murrumbidgee (about $20 a megalitre) and the Murray (about $40/ML), which made sellers in the Murrumbidgee eager to gain a premium for their water in a falling market, while Murray growers and traders were eager to secure cheaper water. 

Acting on behalf of multiple clients, Mr Wilks transferred the water to a Murray license in his wife’s name, Skye Bellamy. 

Stakeholders said it wasn’t a good look for Mr Wilks, the president of the Australian Water Brokers Association, to have snapped up the lot. The association’s role is to set the “highest standards” of professional practice, ethics and conduct for the water broking industry.

But Mr Wilks said last Thursday’s trades were transparent, and he drew on his industry experience of 20 years to get the jump on his competitors.

“I think everyone knew the trade would be closed nearly straight away so it was a matter of working out the best way to have your forms ready to send once it opened.”

He traded using his wife’s license and not his own or associated companies because her license was tied to land below the Barmah Choke, so the water holdings can now be sold above or below the choke in NSW, as well as in Victoria, South Australia and into the Murrumbidgee. 

“Unsurprisingly, those who didn’t benefit from the system have criticised it. We’ve been preparing for this trade since July last year,” he said.

“The general principle of the association is to ensure everything is clear and transparent and in terms of what I’ve done for my clients, they all knew what the plan was and how we were going to do it, it’s set out clearly in the agreements they signed.”

WaterNSW’s inter-valley trade regulations allow all applications for water on a first-come, first-served basis. But stakeholders have questioned if the trading process properly balances primary producers’ need for water against water traders’ business imperatives. 

Ricegrowers Association president Jeremy Morton said there must be a better way to deal with excessive demand for capacity.

“At the end of the day it’s a race. It’s the quick and the dead. Let’s see if we can put our heads together and come up with a better way.​” Mr Morton said.

He suggested investigating a pro-rata system. Another broker suggested a limit to parcel size per transfer.

Jerilderie district ricegrower Rob Massina said the current system wasn’t perfect, but he questioned if more red tape was the right answer.

“For the entire 15GL to disappear within six minutes shows (the process) is not allowing the people in the market who want to use water for primary production to participate. But, when we start talking about pro-ratas we’re talking about the restriction of an openly-traded commodity,” he said.

Mr Massina farms rice, cereals and lambs with his mother- and father-in-law on country spanning Coree in the Murrumbidgee Valley, to “Glenfield” in the Finley district of the Murray Valley. Earlier in the season he sold Murrumbidgee water and bought Murray water, so he did not need to trade in last Thursday's inter-valley trade opening.

But he wondered how Mr Wilks blitzed his competitors on Thursday.

“I’m unsure why others, be it brokers or individual primary producers, didn’t have the same level of knowledge to act as quickly.

“If I hadn’t done what I’d done earlier in the season I would be absolutely wild.”

NSW Irrigators’ Council chief executive Mark McKenzie said there wasn’t a “fundamental problem” with the inter-valley trade system and said there was still plenty more opportunities for growers and traders to access water.

Additional parcels of inter-valley water were traded on Monday as the balance was increased. On Tuesday Mr Wilks secured another 10,000ML from the Murrumbidgee. 

The transparency of IVTs improved when the WaterNSW hub launched last year. Account balance and opening/closing triggers are now published daily.