lessons learned from water trading ial2012
Post on 31-Dec-2015
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Lessons learned from water trading IAL2012
NSW MurrumbidgeeHigh Security 357GL
General Security 1901GL
NSW MurrayHigh Security 185GL
General Security 1669GL
Vic MurrayHigh Reliability 1185GLLow Reliability 301GL
Vic MurrayHigh Reliability 1185GLLow Reliability 301GL
Vic GoulburnHigh Reliability 994GLLow Reliability 439GL
Vic GoulburnHigh Reliability 994GLLow Reliability 439GL
SA MurrayIrrigation Entitlement 570GL
SA MurrayIrrigation Entitlement 570GL
Lesson 1 – Trading works • Recent ABRES Survey – 93% of irrigators consider the ability to trade is
beneficial to their farm business• 2006/07 - 136GL of entitlement trade
2010/11 – 773GL of entitlement trade• NWC estimates that trading reduced the impact of the drought by $5b GDP
Lesson 2 – Get the framework right NSW: Water management Act 2000Vic : Water Act 1989 SA: Natural Resources Management Act 2004
• Water is traded across State boundaries – consistency in the framework required• Ill-conceived rules create perverse market outcomes• Small changes to rules can have big market impacts
Lesson 3 – Information is king • Timely market information is essential• Poor transparency will result in stakeholders losing confidence• Intermediaries play an important role
Allocation price 07 - 10
Lesson 4 – The markets will evolve • More irrigators without permanent water entitlements• Investor groups in the business of owning and
managing water (rural and urban)• New water products – forward water contracts,
options, long term leases
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