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Economic effects of water recovery on irrigated agriculture in the Murray‐Darling Basin

  • Rupert Quentin Grafton
  • Qiang Jiang

In October 2010, the Murray-Darling Basin Authority (MDBA) proposed that a range of 3000–4000 GL per year, on average, of additional water be made available for the environment in the Murray-Darling Basin (MDB) to mitigate the effects of what it considers to be inadequate environmental flows. To help quantify the costs of this water reallocation, a hydro-economic model was constructed based on the 19 regions of the MDB. The model results indicate the following: (i) substantial reductions in surface water extractions of up to 4400 GL per year impose only a moderate reduction on net profits in irrigated agriculture, Basin wide, given competitive water markets, but the effects are much more pronounced in particular regions/catchments and (ii) the costs of the water reallocation are comparable with the amount budgeted by the Australian government to acquire water from willing sellers and increase environmental flows if inter-regional water trade is unrestricted.

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File URL: http://hdl.handle.net/10.1111/j.1467-8489.2011.00545.x
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Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 55 (2011)
Issue (Month): 4 (October)
Pages: 487-499

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Handle: RePEc:bla:ajarec:v:55:y:2011:i:4:p:487-499
DOI: j.1467-8489.2011.00545.x
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  1. John Quiggin, . "Declining inflows and more frequent droughts in the Murray–Darling Basin: climate change, impacts and adaption," Climate Change Working Papers WPC07_2, Risk and Sustainable Management Group, University of Queensland.
  2. Peter B. Dixon & Maureen T. Rimmer & Glyn Wittwer, 2011. "Saving the Southern Murray‐Darling Basin: The Economic Effects of a Buyback of Irrigation Water," The Economic Record, The Economic Society of Australia, vol. 87(276), pages 153-168, March.
  3. D. Peterson & G. Dwyer & D. Appels & J. Fry, 2005. "Modelling Water Trade in the Southern Murray-Darling Basin," Urban/Regional 0506007, EconWPA.
  4. Connor, Jeff & Schwabe, Kurt & King, Darran & Kaczan, David & Kirby, Mac, 2009. "Impacts of climate change on lower Murray irrigation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(3), September.
  5. M. Ejaz Qureshi & Jeff Connor & Mac Kirby & Mohammed Mainuddin, 2007. "Economic assessment of acquiring water for environmental flows in the Murray Basin ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 283-303, 09.
  6. Deborah Peterson & Gavan Dwyer & David Appels & Jane Fry, 2005. "Water Trade in the Southern Murray-Darling Basin," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages S115-S127, 08.
  7. Horridge, Mark & Madden, John & Wittwer, Glyn, 2005. "The impact of the 2002-2003 drought on Australia," Journal of Policy Modeling, Elsevier, vol. 27(3), pages 285-308, April.
  8. Peter B. Dixon & Maureen T. Rimmer & Glyn Wittwer, 2009. "Modelling the Australian government's buyback scheme with a dynamic multi-regional CGE model," Centre of Policy Studies/IMPACT Centre Working Papers g-186, Victoria University, Centre of Policy Studies/IMPACT Centre.
  9. Qureshi, M. Ejaz & Shi, Tian & Qureshi, Sumaira E. & Proctor, Wendy, 2009. "Removing barriers to facilitate efficient water markets in the Murray-Darling Basin of Australia," Agricultural Water Management, Elsevier, vol. 96(11), pages 1641-1651, November.
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