Water, water …

Many farmers have recognised that irrigation is proving to be a game changer in Tasmania. They have supported Tasmanian Irrigation’s new water schemes by putting their hands in their pockets to buy water allocations. Without the backing of investors like these farmers, and other private investors, the schemes would not be going ahead.

If agriculture is to reach its full potential, water must be able to flow to its highest value use through an active, transparent water market.

And that is what these investors are creating – a water trading market in which the laws of supply and demand will prevail and establish a bankable value of water when it is made available for purchase.

This is a good outcome all round. Farmers and other investors can then have the confidence to trade in water, or to increase their holdings. Lending authorities will be comfortable to loan against water rights, as they will be able to benchmark the value of that water and, if needs be, sell the rights when there is a tradable marketplace.

In a perfect world, that would give us a clear indication of the demand and the market price for water. Unfortunately, the world we live in is far from perfect – and we have a way to go before that marketplace in Tasmania is totally sustainable.

The Department of Primary Industries, Parks, Water and Environment (DPIPWE), manages state-issued irrigation licences which have been issued under the Water Management Act.

Tasmanian Irrigation manages schemes that are a mix of natural watercourses and pipeline delivery schemes from dams. They are privately owned by TI or Hydro Tasmania.

In some cases, water managed by both DPIPWE and TI can run in the same watercourse. However, at the moment, there are gaps in processes linking these two systems.

We need to see a more collaborative approach to the development of statutory Water Management Plans to recognise on-ground experience developed by farmers over generations and use this to inform theoretical modeling. Cease-to-take orders need to be managed very carefully to ensure that impacts at critical times are minimised and farmers can continue to run their businesses.

Another issue that needs to be addressed is the development of a more realistic approach to enforcement of existing licence requirements to ensure equity for all involved in water use.

Federal funding for water reform in Tasmania depends on the state complying with the principles of the National Water Initiative. This includes development of Water Management Plans based on science and solid data, as well as appropriate enforcement regimes.

These things will also underpin the establishment of a sustainable and robust water trading market.

We’ve got a way to go yet before those boxes are ticked.

In the meantime, on March 7 Tasmanian Irrigation is auctioning some remaining water rights in operational schemes (in some cases, the last remaining rights in those schemes) and other rights in schemes under construction.

This will be a last chance for investors to purchase water allocations in some of the TI schemes. This is water that can be used for diversifying farming activities or even for holding onto for the proverbial rainy day. It could be worth your while assessing your business and seeing whether increased water allocations would offer useful future-proofing options for your farm.