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NSW is in the process of implementing major reforms to the management of water resources. One of the key components of these reforms is that “Groundwater management policies should employ the principles of ecologically sustainable development and should be directed at achieving sustainable use of the resource”. The implications of this recommendation vary significantly across NSW according to the level of irrigation development and the environmental conditions of aquifers. The Namoi Valley is one region where groundwater has been identified as suffering from both over allocation and over use. Without change, groundwater dependant ecosystems, irrigators and other users face further declines in groundwater quality and quantity with potential aquifer collapse. Consequently, changes to the level of groundwater extractions are required and, not surprisingly, there have been various methods put forward by stakeholders as to how the impacts of this reduction should be distributed. To assess the on-farm economic impacts of groundwater reallocation, a representative farm model was developed for a typical cotton farming system. This paper describes the development of the representative farm model and provides an overview of initial results. Results of the representative farm modeling indicate that reallocation is likely to create significant structural adjustment pressures for some groundwater irrigators in the Namoi Valley and for the local community.


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