The Impact of Water and Soil Salinity on Water Market Trading in the Southern Murray–Darling Basin

Abstract

Irrigators in the Murray–Darling Basin (MDB) of Australia face a salinity triple threat, namely: dryland salinity, surface-water, and groundwater salinity. Water trading has now been adopted to the point where it is a common adaptation tool used by the majority of irrigators in the Basin. This study uses a number of unique water market and spatial databases to investigate the association between the severity and extent of areas which suffer from salinity and permanent trade over time, holding other regional characteristics constant. It was found that larger volumes of permanent water were likely to be sold from areas suffering from higher dryland salinity. In addition, increases in the concentration of groundwater salinity was found to decrease volumes of surface-water entitlements sold, providing evidence that groundwater entitlements (where they are viable substitutes) have been increasingly used as substitutes for surface-water entitlements in recent years. Other key influences on water sales included water market prices and net rainfall.