Murray Darling Basin water trade loophole earns irrigators $100/ML

A loophole in Victoria’s water rules allows irrigators to bypass restrictions on trading water from the Goulburn to Murray Valleys to make a profit of $100 a megalitre.

Passing flow: Irrigators are bypassing restrictions on the trade of water from the Goulburn (above) to Murray Valley. Picture: Andy Rogers

IRRIGATORS are squeezing $100 a megalitre pure profit out of a regulatory loophole that allows them to bypass restrictions on trading water from the Goulburn to Murray Valleys.

An inter-valley trade limit of 200,000 megalitres in net trade out of the Goulburn to the Murray has been in place since the beginning of the new 2019-20 irrigation season, leading to a widening gap in pricing between the two valleys.

But irrigators are bypassing the IVT limit by lodging applications with Goulburn Murray Water to establish Goulburn Allocation Accounts that are tagged (linked) to their Murray Water Use Licences.

The motivation is clear, given Murray irrigators can sell their allocation at $630/ML locally and then replace it with Goulburn water brought in on their tagged account for $530/ML.

The only restriction is that the Murray irrigator uses the Goulburn water on their property.

Irrigation industry insiders say last season almost 50,000ML was moved from Goulburn Valley ABAs to tagged to Murray licences.

The Weekly Times is seeking a response from Goulburn Murray Water as to why it allows these transfers.

One irrigator told The Weekly Times he had started the process of lodging a Form 43 application for a Goulburn ABA to link to his Murray licence.

Details of the loophole come as Victorian Water Minister Lisa Neville prepares to announce the results of a major review into the IVT rules, which most industry insiders say is likely to further restrict trade out of the Goulburn system.

But irrigators are worried further restrictions will simply widen the price gap, given it would further limit Goulburn dairy irrigators ability to offload water into the Murray system, where demand for permanent plantings is on the rise.

“She’s (Ms Neville) been influenced by dairy stakeholders in the Goulburn system who want to diminish allocation prices,” one Murray irrigator said.

“It’s all about access to cheaper water. But is being dressed up as environmental concern.”

One water broker, who did not wish to be named, said further tightening of the IVT was effectively a dairy farmer subsidy and had little to do with the environment.

MORE: WATER ALLOCATIONS FOR GOULBURN, MURRAY

Minister Neville has previously stated the review was initiated due to concerns at the impact of high volumes of trade out of the valley and the damaging environmental impacts of high summer flows.

Murray Darling Basin Authority live river data shows Goulburn River flows at McCoys Bridge surged from about 1000ML/day in early December to 3000ML/day in early January, remaining at that level until late February.