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Abstract
Evaluation of value of irrigation water is essential for supporting policy decision making
relating to investments in the irrigation sector, efficient allocation of irrigation
water and water pricing and for crafting policies to compare the variable impacts of
water reform within and across sectors of the economy. This paper asks the question
of how much an established irrigator would pay for water and at what price farmers
planning to expand the area they have under irrigation would consider paying for the
right to access water. An analytical framework is developed to estimate the net present
value of both annual and perennial agricultural activities in the Murrumbidgee catchment.
Using these estimates the total value of water used in Murrumbidgee catchment
is estimated. An aggregate water supply curve is derived for the catchment from where
water may be acquired from irrigators for environmental flows.