IDEAS home Printed from https://ideas.repec.org/p/ris/prodsw/0605.html
   My bibliography  Save this paper

Stranded Irrigation Assets

Author

Listed:
  • Heather Roper
  • Chris Sayers
  • Andrew Smith

    (Productivity Commission)

Abstract

The staff working paper ‘Stranded Irrigation Assets’ (Roper, H., Sayers, C. and Smith, A) was released on 28 June 2006. Prior to the National Water Initiative (NWI), irrigation authorities imposed restrictions on outward trade of water entitlements partly to protect remaining irrigators against the risks and consequences of having to recover the costs of ‘stranded’ or under-utilised assets. This could be one of a number of reasons behind low levels of permanent water trade. This paper examines ways of minimising the financial impact of stranded assets on remaining irrigators with the relaxation of trading restrictions. The aim of the project was to research the options to address the perceived adverse financial consequences of stranded irrigation assets. The authors concluded that it is not certain that proposals under the NWI to relax restrictions on permanent water trading will necessarily result in widespread stranded irrigation assets. Furthermore, stranded assets do not represent an impediment to the efficient use of infrastructure, the allocation of entitlements, or the use of water. The key findings are that instead of using the ongoing payment of access fees, ‘retail tagging’ and ‘exit’ fees to manage financial impacts, a more efficient approach would involve abandoning charges for renewals annuities predicated on the full replacement of existing assets; revaluing under-utilised assets ‘appropriately’ to reflect their current economic value in use; charging to recover costs fully; and the introduction of cost differentiated charges for individual irrigators within irrigation areas. The project is part of a larger suite of Commission research on water policy, which includes modelling regional economic impacts of changes in water trade and research into irrigation externalities. It also complements the commissioned research study on rural water use and the environment. The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.

Suggested Citation

  • Heather Roper & Chris Sayers & Andrew Smith, 2006. "Stranded Irrigation Assets," Staff Working Papers 0605, Productivity Commission, Government of Australia.
    • Handle: RePEc:ris:prodsw:0605
    as

    Download full text from publisher

    File URL: http://www.pc.gov.au/__data/assets/pdf_file/0017/60461/strandedirrigation.pdf
    Download Restriction: no
    File URL: http://www.pc.gov.au/research/staffworkingpaper/strandedirrigation
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Productivity Commission, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Research Reports, Productivity Commission, Government of Australia, number 21.
    2. Heaney, Anna & Dwyer, Gavan & Beare, Stephen & Peterson, Deborah C. & Pechey, Lili, 2005. "Third-party effects of water trading and potential policy responses," Conference Workshop Proceedings 31907, Productivity Commission.
    3. Mike Young & Darla Hatton MacDonald, 2000. "Interstate Water Trading: a 2-year Review," Natural Resource Management Economics 00_001, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
    4. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    5. Peterson, Deborah C. & Dwyer, Gavan & Appels, David & Fry, Jane, 2004. "Modelling Water Trade in the Southern Murray-Darling Basin," Staff Working Papers 31925, Productivity Commission.
    6. Randall G. Holcombe & Russell S. Sobel, 2001. "Public Policy Toward Pecuniary Externalities," Public Finance Review, , vol. 29(4), pages 304-325, July.
    7. Unknown, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Commissioned Studies 8020, Productivity Commission.
    8. Unknown, 1999. "Impact of Competition Policy Reforms on Rural and Regional Australia," Inquiry Reports 31892, Productivity Commission.
    9. Bjornlund, Henning, 2003. "Farmer participation in markets for temporary and permanent water in southeastern Australia," Agricultural Water Management, Elsevier, vol. 63(1), pages 57-76, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Biggar, Darryl, 2010. "Exit fees and termination fees revisited: funding irrigation infrastructure in a manner compatible with water trade," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 1-15.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gavan Dwyer & Robert Douglas & Deb Peterson & Jo Chong & Kate Maddern, 2006. "Irrigation externalities: pricing and charges," Staff Working Papers 0603, Productivity Commission, Government of Australia.
    2. Agbola, Frank W. & Evans, Nigel, 2012. "Modelling rice and cotton acreage response in the Murray Darling Basin in Australia," Agricultural Systems, Elsevier, vol. 107(C), pages 74-82.
    3. Brooks, Robert & Harris, Edwyna, 2008. "Efficiency gains from water markets: Empirical analysis of Watermove in Australia," Agricultural Water Management, Elsevier, vol. 95(4), pages 391-399, April.
    4. M Ejaz Qureshi & Tian Shi & Sumaira Qureshi & Wendy Proctor & Mac Kirby, 2009. "Removing Barriers to Facilitate Efficient Water Markets in the Murray Darling Basin – A Case Study from Australia," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-02, CSIRO Sustainable Ecosystems.
    5. M. Ejaz Qureshi & Wendy Proctor & M. Kirby, 2000. "Economic Assessment of Water Trade Restrictions in the Murray Darling Basin," Regional and Urban Modeling 283600079, EcoMod.
    6. Edwyna Harris, 2011. "The Impact of Institutional Path Dependence on Water Market Efficiency in Victoria, Australia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(15), pages 4069-4080, December.
    7. Robert Brooks & Edwyna Harris & Yovina Joymungul, 2013. "Price clustering in Australian water markets," Applied Economics, Taylor & Francis Journals, vol. 45(6), pages 677-685, February.
    8. R. Quentin Grafton & Clay Landry & Gary D. Libecap & R.J. (Bob) O'Brien, 2009. "Water Markets: Australia's Murray Darling Basin and the US Southwest," Centre for Water Economics, Environment and Policy Papers 0902, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    9. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    10. Mann, Stefan & Wustemann, Henry, 2008. "Multifunctionality and a new focus on externalities," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 293-307, February.
    11. Grafton, R. Quentin & Landry, Clay & Libecap, Gary D. & O’Brien, R.J. (Bob), 2009. "Water Markets and Scarcity: Australia’s Murray Darling Basin and the US Southwest," Research Reports 94943, Australian National University, Environmental Economics Research Hub.
    12. Eiji Satoh, 2011. "Nontransferable Water Rights and Technical Inefficiency in the Japanese Water Supply Industry," Global COE Hi-Stat Discussion Paper Series gd11-211, Institute of Economic Research, Hitotsubashi University.
    13. R. Quentin Grafton & Tom Kompas, 2006. "Sydney Water: Pricing for Sustainability," Economics and Environment Network Working Papers 0609, Australian National University, Economics and Environment Network.
    14. Horne, Avril & Freebairn, John W. & O'Donnell, Erin, 2011. "Establishing and managing the environmental water reserve – the interaction between different government policies," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100561, Australian Agricultural and Resource Economics Society.
    15. R. Quentin Grafton & Tom Kompas, 2007. "Pricing Sydney water ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 227-241, September.
    16. O'Sullivan, Dan, 2006. "Emerging Rights and Risks in the Management of Water Quantity and Water Quality," 2006 Conference, August 24-25, 2006, Nelson, New Zealand 31960, New Zealand Agricultural and Resource Economics Society.
    17. Gary D. Libecap & R. Quentin Grafton & Clay Landry & J.R. O’Brien, 2009. "Markets - Water Markets: Australia’s Murray-Darling Basin and the US Southwest," ICER Working Papers 15-2009, ICER - International Centre for Economic Research.
    18. John Freebairn, 2005. "Issues in the Design of Water Markets," Melbourne Institute Working Paper Series wp2005n18, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    19. James McClure & Tyler Watts, 2016. "The Greatest Externality Story (N)ever Told," The American Economist, Sage Publications, vol. 61(2), pages 157-177, October.
    20. Biggar, Darryl, 2010. "Exit fees and termination fees revisited: funding irrigation infrastructure in a manner compatible with water trade," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 1-15.

    More about this item

    Keywords

    water trading; water pricing; exit fees; water management; water conservation; water resources;
    All these keywords.

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:prodsw:0605. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MAPS (email available below). General contact details of provider: https://edirc.repec.org/data/pcgovau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.