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The water market: speculating on the Murray-Darling River

By Michael Cathcart - posted Friday, 28 August 2009

The banks of a river may belong to one man or one industry or one State, but the waters which flow between the banks should belong to all the people. Lyndon B. Johnson, on signing the US CLEAN WATER ACT.

The ailing rivers of Australia betray a failure to develop the sense of stewardship, understanding and responsibility for country that is the sign of belonging. The heroic irrigation works of modern Australia - notably in the Murray-Darling Basin - have alienated themselves from the very rivers on which they rely. The vision was grand, and the intentions were often idealistic. But we have flogged those rivers to the edge of extinction in just four generations.

Until all users of the river overcome the imagined division between the “natural” environment and “artificial” human activity - until they deeply feel the interconnectedness of humanity and the natural world - Australians will continue to damage the lands and waters that sustain them.


The crisis

By the 1990s, salinity in the Murray-Darling Basin was out of control. Wasteful irrigation had raised the groundwater table, conveying ancient salts to the surface, poisoning productive country and leaching into the river. In recent years, salt levels in some of the drought-depleted wetlands of the catchment have reached three times the concentration of sea water, killing plants and animals. At the same time, the combined effects of drought and excessive irrigation have been bleeding the river dry.

Attitudes along the river have been changing. For the past century, most irrigators throughout the Murray-Darling Basin thought of the local river as little more than an open channel supplying them with water. However, that fallacy was unmasked in the summer of 1991, when the Darling River became clotted with a toxic mass of blue-green algae 1,000km long - the largest such bloom ever recorded anywhere in the world. The algae, which are an endemic plant, had become bloated on a cocktail of sewage, animal waste and fertiliser.

Vivid television images of the afflicted river alarmed the general population and galvanised the politicians. Normally sceptical irrigators now acknowledged that the environmental crisis on the river was systemic and that their own oversized industry was a principal cause.

The irrigators co-operated by fixing the “Murray-Darling Cap” in June 1995 - an agreement that set a maximum water use for the Basin at a level slightly below the prevailing rate of exploitation. The purpose was to allow a little more water for the river, known to the irrigators (you can hear the lingering resentment) as “duck water”.

The Cap did not fix the problem: too many people held entitlements to pump water from the river. It was “over-allocated”. In 2002, a group of prominent scientists, including the zoologist Tim Flannery and the water scientist Peter Cullen, entered the debate as the Wentworth Group. In a series of statements including their Blueprint for a Living Continent, they identified the disaster and called on governments to halve the volume of water being pumped from the river.

With policy makers, scientists and opinion leaders acknowledging the crisis, the Howard government instituted a national water policy which was reinforced by the Rudd government after it came to power in December 2007. By then, Australia’s largest river had not flowed at its mouth, without the assistance of dredging, for a decade. The waters in the adjoining Coorong wetlands were so diminished, and so toxic with salt and acid, that environmental scientists were declaring that only a mass-transfusion of water would save that idyllic region from annihilation.


Water trading

The chief instrument of these reforms is a mechanism generally referred to as “water trading”. In the world of water management, it seems that almost everyone - farmers, banks, water corporations, agribusinesses and environmentalists - is in favour of it.

The policy abandoned Alfred Deakin’s fundamental principle that irrigators should not hold property rights in water. Under Deakin’s scheme, the water, in effect, belonged to the river - and the irrigators had an entitlement to use an allocated amount on their farms, for which they paid a small annual fee.

By the 1980s, irrigation had earned a reputation as a wasteful and cavalier industry. Some producers practised flood irrigation, simply allowing water to slosh across their properties. Others grew pasture - an activity that would be unprofitable if they were required to buy water at a realistic market price. In any case, the devices used to meter water flowing on to the farm were unreliable and easy to circumvent. During the 1990s, I met three irrigators who confessed to jamming their meters or to secretly pumping directly from the river in the dead of night. Though such acts of theft were policed by official bailiffs, the penalties were inconsequential. As one of the irrigators told me, “It was all good sport”. This major industry was crying out for reform.

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This is an extract from the book The Water Dreamers: The Remarkable History of Our Dry Continent (Text Publishing, 327pp, $34.95). Text Publishing, 2009.

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About the Author

Melbourne-born Michael Cathcart was educated at Melbourne Grammar, the University of Melbourne and the Australian National University and has worked as a schoolteacher and theatre director and is currently a lecturer in Australian Studies at the University of Melbourne. Cathcart has presented several Radio National programs, including Arts Today and the Radio National Quiz, and for ABC TV presented the history magazine show Rewind and the documentary series Rogue Nation. He is the author of Defending the National Tuckshop (1988) and has published an abridgement of Manning Clark’s epic A History of Australia. His latest book is The Water Dreamers (Text publishing, 2009).

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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