The Australian Competition and Consumer Commission has released its second annual Water Monitoring Report for the Murray Darling Basin under the Water Act 2007.
"The report shows that water market reforms in the Basin are providing irrigators with the flexibility to maximise the value of their water assets through water trading and farming," ACCC chairman Rod Sims said.
"ACCC analysis shows that compared to the previous year, fewer irrigators are electing to exit farming which reflects a positive outlook for commodity prices and water availability."
Although some irrigators are selling their permanent water rights, many are preserving their option to irrigate and continue farming into the future. Their water needs can continue to be met through the water market.
Although water market reforms have allowed irrigators to adapt and respond better to changing water availability and market conditions, the ACCC’s report notes that artificial barriers to water trade still exist in some areas of the Basin.
The report also shows that charges for irrigation water services in 2010-11 were generally stable compared to the previous year, with an average increase of approximately 5 per cent across the Basin. This trend is reflected in changes to termination fees which are based on irrigation charges.
However, total water bills for many irrigators were higher in 2010-11 compared to 2009-10 due to an increase in available water and the volume of water delivered for farming.
The ACCC also reported that irrigation infrastructure operators were generally compliant with the water rules during 2010-11, with breaches identified by the ACCC being relatively minor.