2008 Volume 2 Pages 27-31
Water markets were expected to minimise the socioeconomic impact of reducing irrigators’ water entitlements in Australia’s Namoi Valley by providing a mechanism for reallocating water from inactive license holders to active irrigators. But survey responses show that this is an unlikely scenario as it appears as though there may be a number of influences acting on inactive license holders that are stronger than the desire for economic gain from participating in water markets. This research constructs a typology that aims to provide an explanatory framework for understanding what those influences might be. A better understanding of farmers’ attitudes and objectives; and of the motivations for their behaviour, is likely to lead to better policy design and more successful policy implementation. The implication for policy makers is that reducing irrigators entitlement based on their past usage, rather than equal reductions for all, will cause less disruption within the affected communities as this method places minimum reliance on the market as a reallocation mechanism.