Reducing the adverse community impacts of the buyback
Water can be purchased from regions that are perceived as being more economically resilient or that rely less on irrigated agriculture
The purchases of water can be concentrated in particular locations, so as to avoid a ‘Swiss’ cheese effect. The Swiss cheese effect occurs if geographically scattered irrigators exit irrigation, potentially leaving remaining irrigators with a higher cost of recovering common water delivery costs
The buyback can be targeted at purchasing water that results in highly saline return flows
We have considered the case for targeting the buyback to pursue the above objectives and concluded that it is unlikely to be the best way of achieving them. In particular, unless rules were put in place to prevent water being traded back to the area after the buyback, any effects of a targeted approach are likely to be undone by subsequent private water trade.
Also, such targeting could unfairly exclude irrigators in non-targeted areas from participating in the buyback, while putting additional pressure on efficient irrigators in the targeted areas to exit. Where government intervention is warranted in addressing the above objectives, other more direct instruments (some of which already exist) would generally achieve them at lower cost.
We invite your comments on our discussion and finding on the case for targeting the buyback to address additional unrelated objectives.
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