Removing barriers to facilitate efficient water markets in the Murray-Darling Basin of Australia

Book Title: NA
Year Published: 2009
Month Published: NA
Author: Qureshi, M. Ejaz ; Proctor, Wendy ; Qureshi, Sumaira E. ; Shi, Tian
Book Group Author: NA

We discuss the role and characteristics of water markets in Australia in facilitating efficient water allocation. Administrative, regulatory and/or political barriers to effective functioning of water markets are reviewed with a focus on the southern Murray-Darling Basin (MDB) region of Australia. A mathematical model is developed to estimate the costs of existing restrictions and the benefits from potential changes in water markets (e.g., removing barriers in temporary water markets). The modelling results reveal that expanding trade leads to an increase in mean annual net returns from AU $2502 million to AU $2590 million (i.e., an increase of AU $88 million). When the current volume restrictions, exchange rates, and trading charges are accounted for, mean annual net returns reduced from AU $2590 million to AU $2573 million (i.e., a reduction of AU $17 million). The exclusion of any of the three southern MDB states from the interstate water trading imposes significant costs. If South Australia, New South Wales or Victoria withdraws from the water market, net returns are reduced by AU $27 million, AU $31 million and $63 million, respectively. The paper outlines the policy implications of strategies to remove market barriers and to facilitate efficient and effective water trading.

Pages: 1641 - 1651
URL: http:////,ip,url,cpid&custid=s4640792&db=agr&AN=IND44252824&site=ehost-live
Volume: 96
Number: 11
Journal: Agricultural water management
Journal ISO: NA
Organization: NA
Publisher: NA
ISSN: 03783774

profitability, exchange rate, econometric models, waterresources, agricultural policy, policy analysis, water rights, markets,water policy, water management, water allocation, economic analysis,mathematical models, literature reviews, Australia

Source: EBSCO
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