Social and economic impacts of the Basin Plan in Victoria February 2017

8.3NSW Murray

Irrigation water use within the NSW Murray includes extractions by surface water users within the joint irrigation schemes, private diverters and groundwater users. Murray Irrigation, centred on Finley and Deniliquin is the largest joint scheme. There are several smaller schemes of which the largest are Western Murray, centred on Dareton and West Corurgan and Moira located in the central Murray valley.

Table shows the Commonwealth directly purchased approximately 8% of the High Security entitlements on the NSW Murray and secured a further 2% through on-farm infrastructure savings. By contrast, it directly purchased around 15% of the General Security Entitlements and recovered another 6% through on-farm infrastructure improvements. Compared to the Murrumbidgee relatively low volumes of LTAAY were recovered from supplementary or conveyance loss entitlements. The majority of the General Security water entitlement purchases occurred prior to 2012/13.

Table : Commonwealth recovery of water entitlements from the NSW Murray

Class of entitlement	ML issued (Murray Lower Darling Water Sharing Plan 2016)	Recovery (ML) related to Infrastructure investments	Direct purchases (ML)	Other purchases (ML)	Total (ML)	Recovery as proportion of the total of that entitlement (%)	LTAAY (ML)
Conveyance	330,000	11,990			11,990	4	9,400
General Security*	1,750,325	94,984	253,273		348,257	21	282,088
Groundwater		1,551			1,551		1,551
High Security	199,331	4,343	15,068		19,411	10	18,442
Supplementary	502,579	4,333			4,333	2	3,184
Unregulated		184			184		145

Water use in the NSW Murray is dominated by Murray Irrigation’s customers and to a lesser extent those of Western Murray Ltd. At the time of privatisation (March 1995) Murray Irrigation held slightly over 70% of the General Security Entitlements within the NSW Murray Valley. Over 80% of the high security entitlements were held within Western Murray Ltd, centred on Dareton.
Table : Water use in MIL before and after the Basin Plan (MIL Annual Compliance Report 2015 pg 20-21)

Year	2005/06	2012/13	2013/14	2014/15	2015/16	Change 2005/06- 2012/13	Change 2005/06 - 2014/15
Annual Allocation GS: MIL Dividend (%)	63:0	100:7	100:12	61:2	23:6
Carryover from previous year (GL)	210	430	101	220	152
Annual Use (GL)	985 (887 excluding the Snowy Advance)	1263	924	739	339	+278	-246 (-148 excluding the Snowy Advance)
Crop Water Use (%)
rice	49	54	53	45	11	+5	-4
Annual Pasture	25	17	15	20	31	-8	-5
Perennial pasture	11	7	5	5	7	-4	-6
Cereals	10	15	14	17	30	+5	+7
Other	5	4	7	9	22***	-1	+4
Cotton	0	1	1	1	1	+1	+1
Annual Trade into MIL (excl Govt)	+93**	+150	-7	+100*	+20	+63	-50

Note *NSW Murray Valley trade net +20GL Ref NSW Office Water

** In addition 98GL was transferred into MIL as a Snowy advance

*** This included 11% of water used on other summer crops, excluding horticulture

Table shows that water use has declined by around 17% since 2005/06 for years with similar allocation levels (e.g., 2014/15) – if the access to water enabled through the “Snowy Advance” (an agreement between Murray Irrigation and Snowy Hydro Limited to allow early season access to up to 200 GL of water) is subtracted from the annual usage on farm. The data also indicates a shift in crop water use away from rice (-4%) and pasture (-11%) principally towards cereal/oilseed crops and other summer crops, including corn/maize and cotton.

In 2014/15, the 63% allocation to the General Security entitlements purchased by Government (348 GL) equated to 219 GL. The relative reduction in surface water use in 2014/15 within Murray Irrigation totalled 148 GL compared to water use in 2005/06, after excluding the Snowy Advance of 98 GL made in that year. Given that Murray Irrigation holds around 70% of the General Security entitlements within the valley, this suggests the reduction in annual water use is similar in volume to the total reduction in allocations associated with the entitlements recovered for the environment. As with the Murrumbidgee, this suggests that NSW Murray irrigators have not generally purchased allocations to offset the net reduction in water availability.

In 2015/16, a season with a very low General Security allocation, there was a significant shift in crop water use, away from rice to annual pasture, other summer crops and winter crops. The rise in commodity prices for lamb and beef and the dairy industry’s reliance on the purchase of NSW allocations saw an increased focus on annual pasture water use. Temporary water traded at values around $250/ML for much of the season, which saw water historically used for rice production used instead either for winter crop production, traded on the annual market or carried forward to the following year. The gross margin per ML for rice was projected to be $175-225 for crops producing district average yields.