The report - Management of irrigation water storages: carryover rights and capacity sharing - examines capacity sharing as one approach to water allocation, which could provide irrigators with greater flexibility over how they use available water resources. The report was released today by ABARE Executive Director Phillip Glyde.

“Property rights reforms such as capacity sharing are one way to help irrigators maximise the productive value of available water resources. This is an increasingly important objective given the predicted effects of climate change on water availability and the need to obtain further water for the environment,” Mr Glyde said.

Capacity sharing involves allocating water users a share of storage capacity in major reservoirs and a right to a share of the inflows received by those storages. These capacity shares can then be managed independently by water users, somewhat like a bank account.

Water storages play vital role in the supply of irrigation water. The management of storages essentially involves determining how much water to use now and how much water to store for the future.

According to the report, improvements in storage management can result in increases in average incomes of irrigators and decreases in income variability.

“Ultimately capacity sharing provides irrigators with greater flexibility over how and when they use available water resources,” Mr Glyde said.

Relative to capacity sharing, the traditional centralised allocation approach used in most irrigation schemes provides irrigators with little flexibility over storage decisions.

“While many irrigators in these systems have carryover rights, these rights are subject to a number of practical limitations,” Mr Glyde said.