@article{Wittwer:100733,
      recid = {100733},
      author = {Wittwer, Glyn},
      title = {Water purchases to save the Murray-Darling Basin},
      address = {2011},
      number = {422-2016-26876},
      pages = {19},
      year = {2011},
      abstract = {Murray-Darling Basin communities have suffered recurring  and prolonged droughts over the
past decade. Now that the  rains have returned, these communities see the Sustainable  Diversion
Limits (SDLs) planned by the Commonwealth as a  new threat.
Modelling with TERM-H2O assumes that since the  SDL process is voluntary, Commonwealth
purchases will  proceed slowly over the next 12 years. This gives farmers  time to utilize water
saving technologies as they emerge.  This is in contrast to the relatively rapid purchase of 920  GL
up until September 2010 that has already occurred. These  relatively rapid sales reflect hardship
associated with  drought.
If the Commonwealth is to reach the 3500 GL  target, it may need to pay over $4 billion more to
farmers  for water (2010 dollars). The Commonwealth’s budget  constraint will limit the volume
purchased.
Implementing  (SDLs) will raise the price of water and the asset value of  water held by farmers.
At the same time, the value of  irrigated land will fall, partly offsetting the increase in  the asset
value of water. This means that some irrigators  may gain more than others. Those who do best
will be those  whose water entitlements have a high value relative to the  value of their land.
Under a voluntary scheme that proceeds  slowly and gives time for further water savings to  occur,
there will be modest job losses across the basin.  These might fall to 500 jobs below forecast by
the year  2026. The extent to which farmers who sell water to the  Commonwealth leave the
region will have a moderate  influence on regional outcomes.
TERM-H2O is the only model  which has been calibrated by using the drought of 2006-07  to
2008-09 to estimate regional impacts. In the drought  scenario, over 6,000 jobs were lost in the
short term  relative to forecast across the basin. Therefore, SDL  impacts are much smaller than
drought impacts.},
      url = {http://ageconsearch.umn.edu/record/100733},
      doi = {https://doi.org/10.22004/ag.econ.100733},
}