By Francine Rochford
As parts of Victoria are warned of ‘flash flooding’ and the most appropriate Oaks Day fascinator would have a nautical theme, it’s difficult to remember that last week many farmers cut their crops for hay. There hadn’t been enough rain to fill the grain, and mower conditioners raised dust from the dry soil.
Warnings of El Niño continue, and water allocations for many irrigators (in the Goulburn system, for instance) remain at 75%. Irrigators relying on temporary water were finding that the price of water was too high to make it viable to buy. Most average sized dairy farms would need around 300-400 megalitres of water to operate over the season. At present prices that would cost between $81,000 and $108,000 – just to get through the season. Deputations were heading to Canberra to complain about the price of water – but the price is set by the market, not the government.
Last week, the Commonwealth Environmental Water Holder, which holds about one-third of the water entitlements in the Murray-Darling Basin, put 20 gigalitres (that’s 20,000,000,000 litres) of environmental water up to tender. Waterpool, a water cooperative in Victoria, bought some; a Japanese owned tomato grower also put in a successful tender.
Welcome to the world of water trading, where irrigators and the environment compete against each other in the marketplace. You don’t have to own land to have water. You don’t even have to intend to use the water. You can buy and sell water like you buy and sell shares.
Victorian water is probably the most successful and ‘mature’ market for environmental products in the world. Many countries have versions of a ‘market’ for environmental products – carbon trading, for instance, was a ‘cap and trade’ device intended to reduce carbon emissions. Nowhere has the concept been more vigorously embraced than in the Murray Darling Basin in Australia, where water extractions have been ‘capped’ – theoretically at least – for many years, and the Federal intervention in water management through the Water Act 2007 (Cth) has resulted in a clawback of water for environmental flows.
Now both state and federal Environmental Water Holders hold and manage a significant proportion of the water held in reservoirs. Environmental ‘flows’ maintain wetlands and rivers, but Australian fauna is adapted to both drought and flood, and now both conditions have to be replicated – or at least reflected in management.
This summer we will run a Water Law and Policy elective fully online for the first time. We will consider these vast and confusing questions, work out how we got to where we are, and where we will go from here.
Dr Francine Rochford is a Senior Lecturer at the Bendigo Campus of La Trobe University. She is the Director of Online Learning and Regional Programs at La Trobe Law School. Water Law and Policy will run online over six weeks from 4 January 2016 – 12 February 2016.