Water market isn't perfect but still a $117m plus: study

Water market isn't perfect but still a $117m plus: ABARES study

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Water markets are far from perfect, but they are vital in helping the region cope with drought and climate change, the study found.

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THE water market generates $117 million worth of benefits annually for water users in the southern Murray-Darling Basin, new research says.

The study by the Australian Bureau of Agricultural and Resource Economics and Sciences study found that while water markets are far from perfect, they are vital in helping the region cope with drought and climate change.

The ABARES report found the benefit created by water trading was around 12 per cent of the market value in the region, but the benefits were roughly halved in the absence of carryover.

The research coincides with the Australian Competition and Consumer Commission handing its final report about the water market to the Treasurer.

ACCC agricultural commissioner Mick Keogh was tight lipped when asked whether there would be substantial change about how the water market operates if the government took on the report's recommendations.

"I'm not sure how to answer that - we would hope that if our recommendations were accepted there would be a substantial improvement in confidence in the way the market operates," Mr Keogh said.

A separate report by the Productivity Commission into the National Water Initiative recently indicated water trading would be essential for farmers adapting to a drier future.

"They will have to really focus on efficiency, getting greater production per megalitre of water used," Productivity Commission commissioner Jane Doolan said.

"The water market will be a really critical tool for them, helping to manage their supply in times of drought and dry."

The report found water trade monitoring should be integrated into the system-level resource management.

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