Corporations within the NSW water market are making a buck on the expense of farmers and regional communities, particularly within the Murray-Darling Basin, a parliamentary report has discovered.
The 80-page report launched on Tuesday stated that unfair market practices had been rife within the treasured commodity value billions of {dollars}, since water sources had been allotted almost 40 years in the past.
“Traders use sophisticated methods to exploit and manipulate markets, making sizeable profits which flow away from regional areas and towards capital cities and even overseas, the report said.
“Meanwhile, water costs are pushed up for many who want it to develop our state’s meals and fibre.”
Water trading is intended to incentivise individual irrigators to use water more efficiently. This allows them to generate surplus water entitlements which can be used to expand production or sold to release capital.
The NSW upper house committee heard that brokers in water markets are not subject to the same types of regulations as those in financial markets, for example.
One of the main concerns highlighted in the report was the impact on food security.
Some stakeholders said the growth in crops such as almonds and cotton had led to the decline in staples such as rice, dairy and oranges.
Experts argued that hedge funds were making “lots of of hundreds of thousands of {dollars} in buying and selling earnings annually”, which was a “direct loss” to the Murray-Darling Basin.
They stated that as an alternative this cash “might be retained to pursue financial, environmental, social and cultural advantages” for the basin and regional Australia.
In their submission to the inquiry, Southern Riverina Irrigators said “we can not survive on nuts and cotton”, emphasising that these would not sustain the population in a difficult period like a pandemic.
The environmental cost of increased volumes of water flowing through the Murray River was also canvassed, with the committee hearing of forest destruction including platypus and kingfisher habitats as well as culturally significant redgum trees.
Among its 10 suggestions, the report stated the federal government wanted to ascertain a public water market register to supply transparency as a key precedence.
