ABSTRACT

The river basin of the Darling and Murray rivers is situated in south-western Australia. The main agricultural production zone as well as the main settlements of the earth’s driest continent (in terms of the ratio between dry, arid landscapes and relatively well water-endowed areas) are situated there. The surface area of 1,061,469 sq km is shared by the federal states of Queensland, New South Wales, the Capital Territory, Victoria and South Australia. The fact that the basin constitutes Australia’s largest river system in terms of runoff and surface area is not an indication of the availability of water, which, with an annual runoff of 24,000m. cu m, is only a small fraction of what other rivers discharge into the sea (e.g., the Mekong: 500,000m. cu m from a catchment that is 0.8 times smaller); this is a strong indication of the water-scarce environment of the basin. In the course of settlement by, first, the British and then colonizers from

other parts of the world, the basin’s tree and shrub vegetation was cut to make way for agricultural production, primarily based on grazing and cereals, which traditionally depend on rainfall-a fact that makes productivity per hectare comparatively low, but highly productive in terms of the few labour inputs required. With increasing technical capabilities and population growth, abstractions for irrigated agriculture increased; hence, today more than 90% of water diverted for human use goes to the agricultural sector. This irrigated agriculture has to be broken down to illustrate the issues at

hand. Generally, there are corporate-type farms producing cotton and rice, which from an agronomical perspective add only little economic value per unit of irrigation water. On the other hand, so-called small settlements equipped with smaller landholdings produce horticultural crops, such as fruit and vegetables, where the productivity of water as a vital production input is considerably higher. These products are mainly sold on the domestic market, as opposed to rice and cotton, which are export crops. Over the years, several problems have evolved as a result of human inter-

vention in the geo-hydrological cycle of the ancient continent. First, salinity problems developed in areas where the cleared natural vegetation prevented solute salts from ascending to the soil surface by bio-drainage. Later on, irrigation-induced salinity caused by bad drainage and higher groundwater tables added to the problem. These have been addressed by reclamation and drainage schemes since the 1950s, and the introduction of trickle and drip irrigation since the 1970s. Also, some dry land areas have been reforested to re-establish

the natural hydrology. Another factor adding to the water problems in the basin is the development and commitment of water resources to domestic uses in the new metropolitan zones, while the overall water scarcity was not factored into the delivery regime. On the other hand, practices such as rainwater harvesting have been common in Australia for a long time, highlighting the general water consciousness of the population. In recent decades, climate change has become a major issue on the Aus-

tralian environmental agenda, with serious water restrictions (caused by scant rainfalls far below the average) affecting everyday urban life and, more drastically, causing the ruin of many farms, both irrigated and rain-fed. On the management side of the Murray-Darling’s water resources, there

have been important changes in the sector since its large-scale development from the 1900s. Before the 1970s, each state had water management agencies with responsibility for supplying bulk water allocated according to the water rights (land-related, thus considered as absolute property) granted to the basin’s riparians (thus managed centrally per state), but separately from water-related services such as wastewater treatment or drinking water supply. From the 1970s onwards, all states and their agencies adopted basinmanagement approaches. This organizational reform aimed to bring about accountability and efficacy, integrating the complex organizational landscape and centralizing responsibilities in regional, sub-basin agencies with a political mandate from the respective state. Today, Australia’s water sector is characterized by reforms carried through

after 1995. These were the result not only of water scarcity concerns but also of the severe economic constraints faced by the nation. Hence, the reforms resulted in the wide-scale privatization of water services and the transformation of state agencies into private suppliers. Water management was delegated to the lowest appropriate levels, and water rights from then on had to be specified in a detailed way in terms of their reliability, tradability, quality, volumes and transferability. The detailed specification of water rights was intended to promote economic incentives for efficient water use-a mechanism only viable under conditions where rights are clearly established and enforceable, with a transparent market. On the national scale, the issue of managing water at the appropriate level gave birth in 1985 to the MurrayDarling Basin Commission, politically headed by the Murray-Darling Basin Ministerial Council. It was at this point that the states agreed to hand over some of their constitutional power to the federal Government, from then on acting as the co-ordinating body balancing the states’ differing interests. Similar processes had already been going on since 1915, when the federal Government generally used its fiscal power to urge basin riparians to cooperate, albeit in the absence of a general legal framework. The reforms are seen as radical, as the Council decided to cap water abstraction as a response to continued over-commitment-a process that some states had already initiated, whereas in other states still more water rights were issued. This stringency in combination with a regulated and safe basin-wide water market

significantly added to the water use and allocation dynamics initiated by erratic, perennial drought events. Despite the large success that managers and scholars assign to the Murray-

Darling’s institutional development, the reform was largely based on the establishment of a water market that allowed traditional rights-holders to sell off the water they did not need. As an effect of the generous transfer of traditional rights into tradable volumes, formerly unutilized quantities of waters were now fully exploited by the new owners, drastically increasing water abstractions, and the historic (but until then non-apparent) over-allocation resulted in comparatively low prices for buyers. The resulting exploitation (up to legally acquired levels) made the agricultural sector and other water users susceptible to the drought that became manifest in subsequent years. The political response to water scarcity is the reduction of water rights (as there are no prior rights, every right is treated equally) to levels as low as 5% in some years. Agricultural policies since World War II favoured the small settlements

considered as vital for the supply of food for the surrounding communities. With economic reforms and the market-based water transfers, corporate landholdings based on production for the world market have gained considerably in export volumes as well as in water consumption, whereas the horticultural sector often sees itself as being deprived of water to irrigate food crops for domestic consumption. This sector blames the states and the basin commissions for not having controlled the transfers of water rights from the small-scale horticultural sector to the large-scale corporations producing wine, cotton and rice. Another politically contentious issue is the planned development by the

State of Victoria to provide water via a pipeline to a new urban expansion. In order to provide water to this area, the Government would have to buy back water rights-at a high price (it increased after the 1995 introduction of the water market)—that were given away without charge some 15 years ago. On the other hand, it would mean that settlement farmers (who hold a lot of water rights) would have to go out of production as the urban water sector economically out-competes agricultural uses. Hence, what was ‘sold’ as an effective mechanism to reallocate scarce water resources to more productive uses was not achieved in a socially sound manner: Corporate agricultural water users keep irrigating rice and cotton while orange trees (considered to have higher added value per unit of water input) are desiccating, and domestic water users (tax payers) criticize the naive policies of transferring traditional rights into tradable rights without considering actual use levels and the effects of climatic variations on the resilience of both the ecosystems and the population.