Big windfalls for water firms as prices skyrocket

Enraged farmers say investors are forcing them to pay big prices for precious water, with prices skyrocketing as resource firms pocket huge windfalls.

Big firms trading water rights have had profits jump as much as 200 per cent in just a year.

The huge windfalls come as enraged farmers say investors are forcing them to pay big prices for the precious resource.

Water prices across the state have skyrocketed to about $600 a megalitre — up from just $200 last year.

Water Minister Lisa Neville earlier this month promised to make the system more transparent during an interview with the Sunday Herald Sun.

The sharemarket listed Duxton Water has water assets valued at $239.4 million. At its May annual meeting it said profits had risen 247 per cent since last year, hitting $10.4 million, up from $3 million.

Another fund, the Blue Sky Water Fund, had $220.9 million funds under management, it said in February.

Blue Sky’s water fund grew 34.4 per cent last year and 15.85 per cent in the first half of this financial year.

Many parts of the nation are in drought. Picture: AAP Image/Dean Lewins

Robert McGavin, executive chairman of olive grower and large water user Boundary Bend, has said some investors were “playing havoc” with the market by stockpiling water, pushing prices even higher.

Victorian Farmers Federation water council chairman Richard Anderson has said those with water licenses should own land and use the resource for farming.

But Duxton water assets director Alister Walsh said three years of low rainfall had driven the higher prices, not investors.

Mr Walsh said prices had been pushed up by irrigators looking to top-up allocations in case of continued drought conditions next year.

“The system has changed,” he said. “There is less water in the consumptive pool.”

He said it was not in the interests of investors to “sit” on water assets.

Mr Walsh said more than half of Duxton’s portfolio was locked into long term contracts with irrigators and the company was working toward having up to have 80 per cent locked in.