Water a precious commodity in south-west as licence values double

WATER has become a multi-million-dollar commodity in the south-west, with more than $14 million worth of rural licences changing hands last financial  year.

Figures from the Victorian Water Register reveal the median price for groundwater and surface water permanent volume licences doubled in value from $1000 per megalitre in 2011-12 to $2000 in 2012-13 — that’s 0.2 cents a litre.

Temporary volume licence prices also jumped from $160/Ml to $267/Ml in a year.

Most of the licences exchanged are for farm irrigation or livestock and have a combined entitlement of 9245 megalitres — almost three times the average annual consumption of Warrnambool.

“Water security is like gold to dairy farmers,”  Great South Coast group chairman Chris O’Connor, of Terang, said.

Hawkesdale, Nullawarre and Glenelg groundwater management districts recorded the highest volume use and largest number of licence exchanges. There was a huge surge in temporary licences for Hopkins River water, jumping from one 48Ml licence in 2011-12 to seven licences for a total of 480Ml last year while the number and volume for Glenelg River licences fell by two thirds. Nullawarre groundwater management area had eight change of ownership deals, 13 temporary volume transfers and six permanent volume transfers.

The Hawkesdale district had four change of ownerships, seven temporary transfers and three permanent transfers while Glenelg had four change of ownerships and one temporary transfer.

Each of the region’s 440,000 dairy cows drink between 60 and 120 litres of water a day to produce the two billion-plus litres of milk that is sold around Australia and overseas in various products.

On comparison, the average per person daily water use by Melbourne residents is 140 litres.

Water supply would remain a key factor in the region’s output, with trends showing larger herds and higher milk output per cow, Cr O’Connor said.

“Large herds consume a huge amount of water,” he told The Standard.

“There’s no doubt farm production is driven by weather conditions and water security.

“Also milk price incentives for off-peak production encourages more irrigation for pastures.

“Our region has great advantages in reliable rainfall and underground water resources.

“We are still getting a handle on how large our underground reserves are and how valuable they are.

“Some people argue it should be made more readily available, others say it needs to be managed properly.

“The Great South Coast group recognises water resources are valuable and are not finite.”

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