"To be blunt, demand management will not close the gap between water demanded and water available," Mr Piccinin said.

Mr Piccinin said that cities will need to diversify their portfolio of water sources, and that this portfolio will differ for each city. For example, an attractive option for some cities linked to rural water supplies May be to buy water from irrigators.

Mr Piccinin said that modelling commissioned by WSAA suggested that "relatively small volumes of water would be traded to cities, contrary to some emotional myths being bandied about."

Mr Piccinin added that climatic variability meant that urban water suppliers needed to consider not only rain dependent supply options, but also non-rain dependent options such as desalination.

Continuing the theme of water scarcity, Peter Gooday, Manager of ABARE's Natural Resource Management Branch, told delegates that it was important to address any over allocation of groundwater entitlements before progress on other fronts could be made.

Mr Gooday said that it was important to only consider introducing trade in groundwater systems after dealing with overallocation.

"To introduce trade prior to dealing with overallocation could lead to the activation of unused and underused entitlements, increasing the complexity and cost of reducing overallocation." 

David Kent from the Goulburn–Murray Rural Water Authority spoke about plans to reconfigure irrigation infrastructure within the Pyramid–Boort region, with strategies identified that could reduce infrastructure by 22 per cent and generate 3 500 megalitres of water savings.