Murray Darling Basin carryover hits 3.2m megalitres: Write-off risk

Southern Murray Darling Basin irrigators have been unable to use the massive volumes of water flowing into their accounts.

Murrabit dairy farmer Andrew Leahy has never had so much unused water to carry over into next season. Picture: Zoe Phillips

About 3.2 million megalitres of unused water is sitting on Southern Murray Darling Basin irrigators and the environment’ accounts, equal to more than six Sydney Harbours of the nation’s most precious resource.

Years of drought, volatile prices and delays in allocation announcements, have meant many irrigators have been unable to use water or are hoarding it to be carried over into the 2021-22 season.

As of this week there was 870,000ML of unused water in the Victorian Murray system, 870,000ML on the Goulburn, about 886,128ML on the NSW Murray and 566,186ML unused on the Murrumbidgee.

Victorian Farmers Federation water council chairman Andrew Leahy said he was carrying over more water than ever before and would wear the risk of it spilling, given the cost of leasing and parking it on other people’s low reliability shares was $90/ML.

Goulburn Murray Water records show many customers have unused allocation, which it warns is at risk of being written off by next Wednesday – June 30.

As of this week GMW estimates about 30,708ML could be written off on the Victorian Murray and 24,262ML on the Goulburn, unless irrigators use it or can park it somewhere.

Irrigators in Victoria and NSW say much of the unused water they were now carrying over did not flow into their accounts until after October.

NSW Murray Irrigation chairman Phil Snowden said major general security allocation increases were not made until November, which was too late for most irrigators to sow more rice, corn and cotton.

“On the 15th of October we had an allocation of 26 per cent, and the probability of getting more was pretty low,” Mr Snowden said. By January allocations had jumped to 46 per cent, to then finish at 50 per cent.

“The flow-on effect of not using that water for summer crops on industry and our communities is massive,” he said.

Mr Snowden said overly conservative state and Murray Darling Basin Authority water policies, meant more conveyance water was being set aside than ever before, causing delays in allocation increases for NSW and Victorian irrigators.

“These delays also keep water prices higher and at unsustainable levels (in spring).”

National Irrigators Council chairman Jeremy Morton said late allocation increases contributed to the bulk of unused water now sitting in the NSW Murray system.

But he said increased horticultural plantings also meant more water was being held over as insurance against the next dry.

“Whether it’s people growing annuals or permanent plantings they don’t want to be exposed to the horrendous spot market that chews up cash flow,” Mr Morton said.

As for what happens over the next few months, Mr Morton said it was obvious that demand for water to finish off winter crops would crash in a wet spring.

While water is currently trading in the Murray at about $100 a megalitre Mr Morton said “it could very quickly turn to an abundance of water” and a dramatic drop in prices.

Australian Water Brokers Association president Ben Williams said he expected prices to open at $150-$160 (a megalitre), which reflected both the cost of the water and carrying it over.

“There will be corporates and larger family farms looking to secure supplies for 2021-22 and 2022-23, because at some point it’s going to stop raining.

“(Even) if we get a wet spring we might see prices at $100-$120.”

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