Examining Water Allocation Challenges in South Australia

The Murray-Darling Basin is a land of spectacular riverscapes and unique wetlands. But these natural systems are being destroyed by water taken from them for agriculture.

The resulting drought, over-extraction through the entitlement system, high salinity levels, outbreaks of toxic blue-green algae and declining biodiversity are creating an increasingly dire outlook for the basin.

Water security

The Murray-Darling Basin is home to a rich and diverse natural environment. Its foundations are hundreds of millions of years old, but the landscape has largely been moulded by human activity since European colonisation. As population and agricultural demands grew, so did the amount of water that was taken from rivers. This left less water for the environment, and environmental issues began to become more serious, such as low river flows, saltwater intrusion and eutrophication.

In the last 50 years, governments have attempted to address these problems through reform. The National Water Initiative approved by the Council of Australian Governments in 2004 provided a framework and the Water Act 2007 imposed a top-down planning process that will be operationalised through the Murray-Darling Basin Plan to be implemented in 2011.

While this has helped to mitigate some of these problems, they have not been fully addressed. Currently, irrigated agriculture is responsible for the majority of water use in the Basin. It consumes over 80% of the surface water in the region and more than 60% of groundwater. Graziers are particularly vulnerable to any restrictions on their water usage and have called for the protection of their grazing land from government intervention.

This has been exacerbated by the drought, which has reduced water storage levels in large dams. Combined storage levels have dropped by over 50%.

While the government tries to balance the competing interests of people and the environment, it is still struggling to recover enough water for the environment. This is not the fault of government alone – the farmers in the Basin have also been reluctant to give up their allocation.

The Murray-Darling Basin is a complex, interconnected system that must be managed to ensure everyone has access to enough water. Effective water reform balances the trade-offs between irrigation and environmental flows to promote sustainable development and protect the environment. However, it has been difficult to achieve, and will only be successful if all governments are willing to work together to put it in place. Without this, the current situation will continue to deteriorate and will have a significant impact on the health of the Murray-Darling Basin.

Water markets

The Murray-Darling Basin is Australia’s most important water catchment, supporting 2.3 million people and countless native habitats. It also provides the vital water for our irrigated agriculture industry, worth about $3 billion per year. But recent studies have shown that the health of the region is in decline: high salinity levels, declining wildlife and acid sulfate soils are just some of the issues. The causes are multiple: the drought, over-extraction of water through the entitlement system and ongoing environmental damage caused by past dam construction.

In response, the government has introduced the Sustainable Diversion Limits, which set limits on how much water can be diverted from rivers for towns, industries and farmers. These limits must be adjusted to reflect environmental conditions, and to ensure that the Basin’s rivers, wetlands, and birds are healthy.

This is a complex policy. The sustainable diversion limits are set at a high level to achieve good environmental outcomes and allow for the recovery of some of the water that has been used since Europeans first arrived in the Basin. These limits will help to improve the health of the river and reduce its reliance on irrigation, which is a major cause of water scarcity.

The SDLs will also allow for the trading of water allocations between irrigators and communities to support local economies and ecosystems. This is particularly important in rural areas like South Australia, where a large proportion of the population lives and works. Traders can also help to build the capacity of farmers to adapt to changing climate conditions and to use alternative cropping practices.

As the number of SDLs grows, there will be a greater need for irrigators to trade their allocations in order to meet their business needs. This will require an understanding of the economics of the market, and a willingness to negotiate and take risks. For example, a risky trade could lead to higher prices or the loss of water rights altogether.

As a result, there is a need to provide irrigators with more flexibility to trade their water, which could include the option of changing to less risky crops in dry years. Providing flexibility will allow irrigators to continue delivering food and fibre to Australians, while helping to protect our most precious natural resource.

Water allocation challenges

The Murray-Darling Basin is Australia’s most important river system, supplying water to over two million people, countless native habitats and thousands of farms. However, it is also a highly vulnerable region due to a history of intensive irrigation. Since the early 20th century, basin-wide flow regulation and diverting of water for agriculture has reduced average total river flows by more than half. In addition, four major reservoirs and 14 locks and weir structures interrupt the natural flow of the River Murray to the sea.

Currently, the river provides around 36% of Australia’s total irrigated crop and pasture production and three-quarters of its freshwater supplies for domestic consumption. The area is also home to a rich diversity of native wildlife, including migratory birds, fish, reptiles, and mammals. These are all at risk of water allocation challenges, particularly as drought conditions persist across the nation.

In 2007, the Australian Parliament passed the Water Act, creating a national body to manage the Basin. The Murray-Darling Basin Authority has been charged with ensuring the Basin is managed sustainably by taking into account the needs of people and the environment. In consultation with a range of different stakeholders, the Murray-Darling Basin Plan was developed to achieve this goal.

However, in South Australia – the driest state – it has proved difficult to implement this reform. During the 2017-2018 drought, the horticulture industry in Sunraysia demanded more water than it could get. As a result, it was able to grow an additional 15,500ha of permanent plantings, which are water-intensive and will remain so for the foreseeable future.

As a consequence, the lower lakes in the region are now full of salty water, which is being used to irrigate the new crops. This is a significant problem for the river, which is now less healthy and less productive than it could be.

The MDBA has imposed a Sustainable Diversion Limit (SDL) to address this issue, but this will not be enough on its own. Ultimately, the most effective solution will be for all states to reduce the amount of water they divert from rivers and floodplains. This will require some hard decisions by all jurisdictions and will take time to complete.

Water conservation

The Murray-Darling Basin is home to more than two million people and over 50 First Nations, it supports over 50 native fish species and 120 waterbird species, contains internationally protected wetlands, and thousands of kilometres of rivers. The basin needs water to be healthy, for the environment and our economy. We need it to support the plants and animals that live in it, for our food, and for tourism and recreation. But over time, the amount of water being taken from the river has increased as communities and agriculture have grown, and when drought hits, all of that extra usage leaves the environment worse off.

In addition to the impact on rivers of reduced flow, this increased usage has led to degradation of wetlands as land use changes and breeding cycles are interrupted. It has also affected animal populations because of the decrease in habitat available. The Murray-Darling Basin is now a water catchment in crisis. During the Millennium Drought, the Government launched reforms to prevent economic and environmental decline in the region, including establishing the Murray-Darling Basin Authority and asserting its right to set sustainable diversion limits for water (Connell and Grafton, 2011b).

The new regime will determine how much can be extracted from the river based on factors such as storage levels and expected inflows, groundwater levels and rates of recharge, and interception activities such as new almond and cotton plantations. It will also take into account climate change impacts on hydrological change and the need to manage water in a sustainable manner.

For the first time, permanent horticulture plantings will be required to be metered and reported on the groundwater management system, providing valuable information about their water use. This is a significant step towards reducing the over-allocation of water from rivers, which has been a major cause of ecological degradation in recent years.

Water is a finite resource, but it’s a crucial one. When water is scarce, as it is in the Murray-Darling Basin, it becomes even more valuable. It’s become a commodity that is traded on the market and used for agricultural purposes, industry, town water supplies, and for recreational uses like swimming and boating.