An ARC Future Fellow has provided new insights into how Australian farmers and irrigators may respond to certain market conditions, and when they are more likely to sell their water entitlements. The study, undertaken by Associate Professor Sarah Wheeler from The University of Adelaide, has resulted in a world-first model that could be used to help develop water markets in areas that do not exist, as well as better understanding how to apply environmental policy, such as water buyback schemes. It's also a model that could be used internationally. The selling or buying of water entitlements is a contentious and politically charged issue, with competing environmental and agricultural interests. But it’s also an issue that needs more evidence around it to ensure success, said Associate Professor Wheeler. “Agriculture that relies on irrigation is the largest water user in many countries in the world. Despite water markets being in existence for many years, there has been a real lack of knowledge about water price elasticity—that is, how changes in the price of water entitlements influences changes in supply and demand of water."
Media issued by The University of Adelaide.