The Federal Government has begun a new strategic water purchase initiative in the southern connected system of the Murray-Darling Basin.


Federal Water Minister Tony Burke said the initiative would contribute to the measured pace of water recovery for the environment and is in line with the recommendations of the Standing Committee on Regional Australia’s Of Drought and Flooding Rains: Inquiry into the impact of the Guide to the Murray Darling Basin Plan in Regional Australia report.


Mr Burke said the initiative is designed to test the market for targeted water purchases and will include strategic purchases of water entitlements from within irrigation districts.


"This new initiative will involve seeking expressions of interest for water purchase in the southern connected system focusing on acquiring entitlements held outside of shared irrigation delivery networks, and some strategic purchases from within irrigation networks.


"The new approach focusing on targeted purchases has been developed to provide an opportunity for eligible irrigators who wish to sell their water the chance to do so, whilst minimising the effect on shared irrigation delivery networks of water trade to the environment.


"Water will only be recovered from those that choose to participate in the Government's programs through take up of infrastructure grants and voluntary water purchase. The Government will not be cutting anyone's water entitlements or forcing them to sell," Mr. Burke said.


The new initiative will be conducted in two parts:

  • Irrigators will be invited to submit an expression of interest for water they are considering selling. This phase will be open for four weeks and applicants will not need to submit a price at this stage. If an expression of interest offer meets the government's strict eligibility criteria, irrigators may then be invited to participate in a select tender process expected in early April.
  • The select tender will run for two weeks during which applicants will be asked to nominate the price they want for their water and provide additional information if required to confirm eligibility against the criteria. Offers invited to the select tender will be assessed for value for money with applicants notified within approximately four weeks whether their sale offer will be pursued.


The move has been criticised by the National Farmers Federation, who says that that water purchases "should be the option of last resort from the Government, not the first step in improving water efficiency."

“The Government basically has two options: they can reduce water through improved infrastructure and water efficiency measures for farms and communities – or they can buy the water back out of our agricultural production systems,” NFF President Jock Laurie said.

“With today’s announcement, they have chosen the latter – which, if they continue down this path for the rest of the Basin, will result in a reduction in food and fibre production of around $1.6 billion, at the exact time that Australia’s farm output needs to grow in order to meet the growing needs of the population.

“We have said all along that Minister Burke and the Government must find a way to get more water to the environment without compromising our ability to get food on Australian plates or fibre into our clothing. And, they must do so without negatively affecting the jobs and communities that we support in regional Australia.

“There is only one sensible solution. The Government must invest now in infrastructure and water efficiency measures and commit funds to increase research, development and extension to give farmers the knowledge and tools they need to grow more food and fibre with less water.


“The Government could take the heat out of the debate re the proposed Murray-Darling Basin Plan now by shifting their focus to infrastructure and water efficiency measures. Water recovered through infrastructure investment and buyback is improving the health of the Murray Darling Basin and will complement the Gillard Government's major investments in more efficient irrigation water delivery and use."