Modelling the regional and farm-level economic impacts of environmental flows for regulated rivers in NSW, Australia

The management of water resources across Australia is undergoing fundamental reforms aimed at improving the health of rivers, estuaries and groundwaters. The reforms include specification of property rights, the way the resource is shared between the environment, irrigators and other users, charges for water use and the operational management of the water systems. In New South Wales (NSW), a series of water sharing plans (WSPs) is being developed for each water source in the State including regulated rivers, unregulated rivers and groundwater aquifers. These plans, which are the mechanisms by which the reforms are being implemented, are being developed by community based water management committees (WMCs). The role of the WMCs is to develop a plan that achieves a balance between environmental, economic and social outcomes. NSW Agriculture has assisted a number of WMCs by quantifying the economic impact of proposed WSP options on the irrigation community. This paper outlines the different approaches taken by NSW Agriculture to quantifying economic impacts on irrigators and provides the results of case studies in two regulated river catchments heavily developed for irrigation—the Murrumbidgee and Lachlan Catchments.