What is 'highest value' costing the bush?

Water licence and land separation hold one of the sustainability keys


The federal government has promised an ACCC inquiry into the water market. So why is it that the water market is so critical to our communities and river systems?


The water market has reached highs that, in 1994 when water and land were separated, few people could have imagined - and it looks like it could go higher yet.

It is with this in mind that irrigators who once only used general security water, are now bidding to previously unimaginable prices for high security water, and then are using that water to grow annual crops.

While the margins no doubt require some careful calculations, it is obviously a huge benefit to be able to plan ahead and to go into a season knowing a baseline level of production.

If the drought breaks tomorrow, no doubt there'll be cheaper water about. However, that creates new opportunity for increased areas planted using additional volume on a cheaper market.

The question is, how far can the market keep rising before it's not worth putting the water on crops, and will the ownership of water consolidate to a point where the competition in the market is thinned out and the water devalues?

Meanwhile, what damage is this doing to communities in these regions as family farms get squeezed out? And what is this doing for how efficiently we use the water?

The top bidders are not necessarily among the farms that are within the best delivery range from the storages, nor are they necessarily farmers, and transfers of water around the system also effect how well that water can be delivered to where it's needed.

We are also seeing users such as mining companies outbid farmers.

RELATED READING:Is the big price tag of high security water worth it?

When water was separated from land, the assumption was it could move to the highest point of value in the system and therefore potentially be used more efficiently.

A few of us may have forgotten, but back then, rice was targeted by the environmental do-gooders as bad for the environment and for using too much water - as cotton is now.

The industry had to push back and get the facts out there about how extremely efficient it was at converting each megalitre of water into food.

While this is just one example, rice is extraordinarily efficient as a staple food, but is itself now being pushed aside because the margins no longer stack up.

Is the current structure of the water market trading away family farms' future in its pursuit of highest value use? And what is this costing our communities?

The structure of our water market seriously needs reviewing.


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