Securing your future water needs: Harnessing carryover and other water products

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30 April 2021

Key messages:

  • Last summer’s La Nina reduced irrigation demand
  • The MDBA active storage is at 45% (this time last year active storage was at 27%)
    • Other storages are generally at or above average
  • The Bureau of Meteorology climate forecast is currently neutral for the next 3 months (anything could happen in terms of rainfall and inflows)
  • Major Victorian High Reliability water shares are expected to reach 100% in 2021-22 under average or wetter inflow scenarios
  • Currently, around 500 GL is held in privately owned allocation accounts in the Victorian Murray system and about 500GL in the Goulburn system
  • Approximately 650 GL likely to be carried over in the NSW Murray system and 565 GL in the Murrumbidgee system
  • A Carryover Calculator is available for Victorian water systems to explore your unique on-farm carryover scenarios

A table that summarises carryover rules for major entitlement types in the sMDB is below:

Entitlement type Carryover highlights
Vic High Reliability up to 100%, 5% loss, subject to spill risk, returned after declaration
Vic Low Reliability up to 100%, 5% loss, not subject to spill risk*
NSW Murray General Security up to 50%, no loss, forfeit future allocation above 110%
NSW M’bidgee General Security up to 30%, no loss, forfeit future allocation above 100%

*unless there is water allocated onto this entitlement

  • When looking to secure water for the future, consider:
    • Goals for the water secured – such as providing a low-cost input for annual crops versus security for perennial plantations
    • Access to capital
    • Exposure to risk such as the volume that could be allocated to you in a season, the market spot price and the potential for disputes
  • Options to secure water include:
    • Permanent entitlement or water shares
    • Entitlement lease
    • Forward allocation contracts (including options)
    • Temporary allocation market
    • Carryover (“parking” or using your own space)
    • Other options that can be negotiated between a buyer and a seller
  • Each option has its own benefits and risks
  • Generally, using a combination of the above options is the best strategy.

For more information, watch the webinar recording above or view the webinar slides (PDF, 2MB).

 

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2 comments, add yours.

Stuart Lowe

The content of each of the addresses was very helpful, however, the audio from each speaker was unreliable which made listening difficult. Rob O’Connor did mention this during the webinar but it remained a problem throughout. I suggest that this be addressed for the next webinar.

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    Timothy Robinson

    Author

    Hi Stuart,
    Yes we were aware of the audio issues occuring during the webinar making it occasionally hard to hear.
    This issue will be rectified in future webinars.
    The slides from the presentation are available in the article above to follow along with as well.
    Kind Regards,
    Tim Robinson
    Agriculture Victoria

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