Allocation Trade in Australia: A Qualitative Understanding of Irrigator Motives and Behaviour

19 Pages Posted: 4 Jan 2012

See all articles by Adam James Loch

Adam James Loch

University of South Australia - CRMA, School of Commerce, UniSA

Henning Bjornlund

University of South Australia - International Graduate School of Management

Sarah Ann Wheeler

University of South Australia

Jeff Connor

Government of the Commonwealth of Australia - Land and Water

Date Written: January 2012

Abstract

Governments in Australia are purchasing water entitlements to secure water for environmental benefit, but entitlements generate an allocation profile that does not correspond fully to environmental flow requirements. Therefore, how environmental managers will operate to deliver small and medium‐sized inundation environmental flows remains uncertain. To assist environmental managers with the supply of inundation flows at variable times, it has been suggested that allocation trade be incorporated into efforts aimed at securing water. This paper provides some qualitative and quantitative perspective on what influences southern Murray–Darling Basin irrigators to trade allocation water at specific times across and within seasons using a market transaction framework. The results suggest that while irrigators now have access to greater risk‐management options, environmental managers should consider the possible impact of institutional change before intervening in traditional market activity. The findings may help improve the design of intervention strategies to minimise possible market intervention impacts and strategic behaviour.

Keywords: allocation water trade, Murray–Darling Basin, water management and policy, water markets

Suggested Citation

Loch, Adam James and Bjornlund, Henning and Wheeler, Sarah Ann and Connor, Jeff, Allocation Trade in Australia: A Qualitative Understanding of Irrigator Motives and Behaviour (January 2012). Australian Journal of Agricultural and Resource Economics, Vol. 56, Issue 1, pp. 42-60, 2012, Available at SSRN: https://ssrn.com/abstract=1979272 or http://dx.doi.org/10.1111/j.1467-8489.2011.00575.x

Adam James Loch (Contact Author)

University of South Australia - CRMA, School of Commerce, UniSA ( email )

37-44 North Terrace
Adelaide SA 5000, South Australia 5001
Australia
08 8302 7296 (Phone)
08 8302 7001 (Fax)

HOME PAGE: http://www.unisanet.unisa.edu.au/staff/homepage.asp?Name=Adam.Loch

Henning Bjornlund

University of South Australia - International Graduate School of Management ( email )

GPO Box 2471
Adelaide South Australia 5001
Australia

Sarah Ann Wheeler

University of South Australia ( email )

37-44 North Terrace, City West Campus
Adelaide, South Australia 5001
Australia

Jeff Connor

Government of the Commonwealth of Australia - Land and Water ( email )

GPO Box 1700
Canberra, Australian Capital Territory 2601
Australia

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