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A Farmer's Guide to Water Trading in Victoria
Victoria is home to one of Australia's most established and dynamic water markets. For farmers and irrigators, particularly in the state's north, water trading is an essential business tool for managing climate variability and maximising productivity. The Victorian system is underpinned by a sophisticated legal framework and a central public registry that provides a high degree of security and transparency. This guide offers a practical overview for farmers on how to navigate the Victorian water market, from understanding the key entities to executing a trade.
Victoria's Water Entitlement Framework
Water management in Victoria is governed by the Water Act 1989, which establishes the legal framework for water entitlements and trading.38 A key feature of this framework is the "unbundling" of water rights, which separates them into distinct, tradeable components. For a farmer, the most important of these are:
- Water Share (WEE): This is your permanent, ongoing entitlement to a share of the water in a declared system (e.g., the Goulburn or Murray systems). It is a legally recognised property right, identified by a unique Water Entitlement Entity (WEE) number, and can be bought, sold, or mortgaged like land.12
- Allocation Account (ABA): This is the account where your seasonal water allocation is credited. It functions like a bank account for water, tracking allocations received, water used, and water traded. Each account has a unique ABA number.39
- Water-Use Licence (WUL): This licence authorises you to use water on a specific parcel of land for irrigation. It defines where your water can be applied.39
Understanding these separate components is crucial, as they can be managed and traded independently to suit your business needs.
The Role of the Victorian Water Register (VWR)
The cornerstone of the Victorian water market is the Victorian Water Register (VWR). The VWR is a comprehensive public register that records all water-related entitlements in the state, providing integrity and transparency to the market.41
For farmers, the VWR is an invaluable resource that:
- Records Ownership: It holds the official record of who owns which water shares, along with any associated mortgages or leases.43
- Tracks Water: It records how much water has been allocated to each account (ABA), how much has been used, and all trade transactions.43
- Provides Market Information: The VWR website offers public access to statistics on trade volumes, directions of trade, and average prices paid, helping you make informed decisions.43
The Water Registrar is the official body responsible for maintaining the accuracy and accessibility of the records related to water shares.40
The Trading Process in Victoria
Whether you are buying or selling a temporary water allocation or a permanent water share, the process in Victoria involves interaction with your local water corporation and the VWR.
1. Trading Water Allocations (Temporary Trade):
This is the most common type of trade, used for managing water needs within a single season.
- Step 1: Find a Buyer/Seller: This can be done through direct negotiation or by engaging a water broker.
- Step 2: Submit an Application: The trade application (typically a Form 39) must be submitted to your local rural water corporation (e.g., Goulburn-Murray Water, Southern Rural Water, or Lower Murray Water).46 This can be done directly online via the VWR's 'My Water' portal, through a broker's dedicated portal, or by submitting a paper form.47
- Step 3: Approval: The water corporation assesses the application to ensure it is complete and meets all relevant trading rules. If approved, the water allocation is transferred between the seller's and buyer's ABAs.46
2. Trading Water Shares (Permanent Trade):
This is a more significant transaction involving the permanent transfer of ownership.
- Step 1: Agree on Terms: The buyer and seller negotiate the terms of the sale, often with the assistance of a broker or legal professional.
- Step 2: Water Corporation Approval: An application to transfer the water share is submitted to the relevant water corporation for approval against the trading rules.49
- Step 3: Lodgement with the Water Registrar: Once the water corporation approves the transfer, the application must be lodged with the Victorian Water Registrar within two months to be officially recorded. This final step legally transfers the ownership of the water share.43
Key Trading Rules and Zones in Victoria
Victoria's water market is divided into numerous trading zones, which correspond to different parts of the river and irrigation systems. Trade between these zones is possible but is subject to a complex set of rules designed to manage the physical constraints of the river system and protect the environment and other users.
Key rules to be aware of include:
- The Goulburn to Murray Trade Rule: This rule manages the volume of water that can be traded from the Goulburn system into the Murray River to prevent unseasonal high flows that can damage the lower Goulburn's riverbanks.50
- The Barmah Choke Trade Limit: Trade from upstream of the Barmah Choke (a narrow section of the Murray River) to downstream is restricted due to the Choke's limited channel capacity. This often creates a price difference between water above and below this point.46
Navigating the Victorian water market offers significant opportunities for farmers to enhance their water security and business resilience. However, the system's complexity, particularly its detailed trading rules and zones, means that partnering with an expert water broker who understands the Victorian landscape is a highly valuable strategy for ensuring compliant and successful transactions.