A lengthy hit list of irrigators' major water market gripes are set to be canvassed by the Australian Consumer and Competition Regulator's inquiry into the southern Murray Darling Basin.
It will investigate who owns water and how much, the effect of trading on the market, behaviour of brokers, market transparency, carryover rules, and water losses from river operators.
Until now angry irrigators, who are grappling with sky high water prices, hadn't seen the scope of the ACCC's inquiry.
But the terms of reference announced on Wednesday by Water Minister David Littleproud should satisfy frustrated farmers - many of whom will welcome the opportunity to speak at one of the public hearings to be held across the Basin.
Whether they are still happy after the ACCC reports on this most complex of issues, and the government responds, remains to be seen.
The ACCC will investigate:
- Water market trends since 2012 including demand, changing patterns of use, trade volume, water availability, new market products, and the number of participants in the market.
- Carryover practices.
- Water brokers, exchanges, investment funds and other significant traders
- Market transparency such as the timeliness, accuracy, and completeness of public of information and true trade price reporting and the types of trade
- Barriers to entry, expansion and exit, including transaction costs
- The effect of constraints management on storage or delivery of water, including adjustments made to give effect to trades and inter-valley transfers.
The ACCC will issue an interim report on May 18 next year, and submit its final report to government in November.
The public hearings will be an opportunity for river towns and irrigators to vent their frustration over decades of disruption.
Water reforms have coincided with dairy farmers selling out of their industry in droves, and rice farmers making more money by renting their water than from growing a crop.
Corporate farmers are buying out family farmers at an increasing rate, changing the cropping mix in the process.
Meanwhile, the viability of many towns is under threat. So too the jobs in regional processing and service industries.
The roots of change date back to 1994 when land and water assets were separated. The aim was to make sure water wasn't wasted.
New rules were created so water entitlements could be traded across catchments - allowing bulk water to move to the highest bidder and the highest value use.
- Reforms sell family farms down river
- Dairy industry wants ACCC probe fast tracked
- Irrigators eye market investigation
Many farmers have done well selling and leasing their water entitlements, while others shifted from permanent to temporary entitlements and paid the price during drought.
The water market is also a significant factor in local communities.
A worrying trend for towns in NSW and Victoria's established irrigation districts has emerged as water flows out of their economies and down river below the Barmah Choke.
That's because vast volumes of entitlement have been traded into the Lower Murray, where the nut industry is rapidly expanding its footprint on cheap undeveloped land.
On top of that, since 2014, investors have been able to buy water and trade it without owning farmland, which has opened the door to predatory corporate investors which buy up entitlements on the temporary market and hoard it against dry times, meaning farmers are forced to pay through the nose.
Amid the disruption, irrigation communities have fuelled a range of popular movements - variously calling for the Basin Plan to be paused, scrapped, investigated by a Royal Commission and some have even lodged a class action against the Murray Darling Basin Authority in the NSW Supreme Court, claiming damages for under-delivery of water allocations.