Trading Water
The COAG reforms that encouraged privatisation of irrigation schemes throughout Australia also separated entitlement to water from the land title. This allows water to be traded separately from the land.
Irrigators own water in the form of shares in the cooperative plus a corresponding certificate of water entitlement. The entitlement to water can be leased for a season, or sold outright. This allows farmers some flexibility - you can irrigate more of your existing land without having to buy another paddock, or if you want to get out of irrigation farming, you can sell the water and stay on the land.
Our records show that over 10 years of trading about 10% of annual water sales relate directly to temporary trades and about 1% of sales relate to permanent sales. Trades and prices generally increase in dry years. Three distinct markets have developed in each of the 3 irrigation districts for different reasons.
Harvey Water plays no direct role in water trading or price setting but has facilitated auctions each season to assist the trading process. A voluntary register of water available for trade can be found on the following link:
Voluntary Trading Register
Harvey Water records show that over 70% of trades which occur are between irrigators without any input from Harvey Water. This is how it should be as there is an open market for water, the same as for hay, for example. You only have to register the trade with Harvey Water using one simple form.
However in dry years, some irrigators have complained to Harvey Water that they wanted to trade water but couldn't find anyone to buy it from.
In our Customer Survey for 2000/1 we asked irrigators if they thought a Voluntary Register was a good thing. The idea was supported by 78% of irrigators.
The register is open to buyers and sellers and all negotiations are to be between buyers and sellers. Harvey Water plays no part in trading or pricing water and asks traders to sign a Disclaimer which recognises this. It is optional for you to advertise a price although we do recommend that you advertise the volume you want to trade. Remember both buyers and sellers may advertise.
Anyone can register at any time although trades cannot be processed until after the allocation for a season is decided, which is usually at the end of October each year.
Harvey Water suggests to irrigators that there is little purpose in not using or trading your water. Mostly you can at least get some of your fixed charges back. Department of Water give us a licence for our irrigation water. They will look closely at any water which is not used at the end of a season and make a judgement on whether irrigators really need all the water they have. There is the risk that Harvey Water will not have as much water in future.
In past seasons irrigators who have wanted to buy water because they were short, have sometimes been unable to do so because they have not known who had more water than they needed and could potentially trade.
Harvey Water has attempted to encourage irrigators with more water than they need to list it for trade on the Voluntary Register but with limited success. Other members felt that this was unfair in a cooperative and passed a resolution at the 2003 AGM to change the company Articles of Association to allow the publication of limited details on water which might be tradeable.
It was agreed that if on a 5 year rolling average, and taking into account restricted seasons, an irrigator did not use 75% of their TWE for either irrigation or trade, then they would have their contact details listed for access by potential buyers.
Trade may be either temporary, lease or permanent and the standard trade conditions apply.
The register is listed in potential volume order so that it is easier for buyers to match their volume requirements against that available.
The publication of contact details does not compel the listed person to sell but is only to assist buyers know who they might approach. Any details of price or other trade conditions are matters to be sorted out between the buyer and the seller. Harvey Water will continue to only play the role it always has, which is to register the trade.
TO REGISTER SIMPLY CALL HARVEY WATER ON TEL 9729 0100 AND WE WILL SEND YOU AN AUTHORISATION FORM.
