Water Victoria

Water Management

Who manages the water?

Goulburn Murray Water (G-MW) is the water authority in Victoria that is responsible for the delivery of water services to the major irrigation districts across Victoria’s northern plains. It covers an area of 68,000 square kilometres and involves 24,620 serviced properties.
The authority derives its names from the two river systems that provide most of the water resources, the Goulburn and Murray Rivers.

There is approximately 1,100,000 ML of entitlements held by farms in the Goulburn system and it consists of storages, weirs and connecting channels that integrate the supply of water from the Broken, Goulburn, Campaspe and Loddon river catchments.

The Murray system has approximately 780,000 ML of entitlements and water is sourced from the Murray, Mitta Mitta and Ovens river catchments.

The dairy industry is the biggest user of water in the region followed by mixed farming enterprises and then horticulture.

Water Allocation

How does it work?

Farms in the irrigation districts will have a water entitlement which is made up of a high reliability water share (HRWS) and a low reliability water share (LRWS). Each year there is an allocation made for each water share which is determined by the level of water in the storages for each particular irrigation system.

In Victoria, water is firstly allocated to high security stock and domestic, urban and industrial users. Once these needs are met, water available in the storages will be allocated to farms until 100% of HRWS is met for the current irrigation season. At this point, no further increases to allocation will be made until there is sufficient water in reserve that will allow for 100% of HRWS to be allocated in the following irrigation season The water in reserve also takes into account future inflows that are based on the lowest inflow on record.

This is a relatively conservative allocation policy but it provides a reliable water supply with farms on the Goulburn and Murray systems receiving 100% of their HRWS 97 years in 100.

Once there is sufficient water in reserve to allow for 100% of HRWS to be reached for the following irrigation season, then the excess water in storage can be further allocated in the current irrigation season as an allocation for the LRWS.

A typical scenario :

Farm water entitlement :	500 ML HRWS 240 ML LRWS
Seasonal Water allocation :	60% LRWS = 144 ML available
Total water available to the farm from its entitlement :	644 ML

The 644 ML is made up of 500 ML from its HRWS and 144 ML from its LRWS.

System Reliability

How reliable are the irrigation systems?

Water is allocated on the Goulburn and Murray systems according to how much water is in the storages for each system. As the storages for each system are in different catchments there will be different levels of water in store in any particular year and therefore allocations will vary between the two.

The table below shows the allocations on the two main irrigation systems over the past 15 years.

	Water allocation as a % of water right
Irrigation Season	Murray System	Goulburn System
1991/1992	200	200
1992/1993	200	200
1993/1994	200	200
1994/1995	200	200
1995/1996	200	200
1996/1997	130	120
1997/1998	200	100
1998/1999	200	100
1999/2000	130	100
2000/2001	200	100
2001/2002	200	100
2002/2003	129	57
2003/2004	100	100
2004/2005	100	100
2005/2006	144	100
2006/2007	95	29
2007/2008	43	57

Note: The table expresses water allocations as a percentage of water right. Due to changes in water policy future allocations will be expressed as allocations against HRWS and allocations against LRWS.

The table above shows that in recent times the Murray system has had higher allocations than the Goulburn. This demonstrates that currently the Goulburn system catchment is in a drier sequence than the Murray system catchment. However, as of October 2007, allocations on the Goulburn system are actually higher than the Murray system.

Water Costs

There are annual charges for a property that has access to the irrigation system that covers the cost of maintaining and replacing the infrastructure involved as well as costs of managing the delivery of water to farm properties.

The annual charges are different for the seven gravity irrigation districts in the G-MW region that are illustrated below.

Water Trading

Water entitlements can be bought and sold both on a temporary and permanent basis. Selling water entitlement on a temporary basis means that the seller retains ownership of the water entitlement but the buyer gets the use of entitlement for the current season. If selling water on a permanent basis then the seller is relinquishing ownership of the entitlement to the buyer.

The use of the water market has become an important tool for dairy farmers to secure the level of water required to operate their farm system. Water can be bought and sold through the water exchange, the use of water brokers or privately between irrigators.

The development of a water exchange provides a relatively simple way that irrigators can enter the water market as well as providing good information on the market prices for water. Further information about the water exchange can be found on the watermove website.

On average only about one third of the water that is traded is done through the water exchange. The remaining two thirds of the trade occurs either through water brokers or privately between irrigators.

As dairy is the biggest user of water in the region, the market price for water tends to be driven by the level of returns that can be generated by dairy farming. The higher value irrigation industries such as horticulture only represent a small percentage of the total water used and therefore their needs are met relatively quickly. This means that not only is the water available but generally at an affordable price for well managed dairy operations.

Permanent Water Trade

Irrigators are also able to permanently trade their water entitlements. In 2005-06 the price of permanent water on the water exchange traded around $1,100/ML. Water prices have continued to appreciate with permanent water trades approaching and exceeding $2300/ML in 2007-08 as the region experiences a period of low water availability.