The ACCC has today published the final report from its inquiry into Murray-Darling Basin water markets. The NFF cautiously welcomes the report’s findings.
“Irrigators will be cautious of proposals to create new agencies and more regulation that might impose further costs for farmers,” NFF CEO Tony Mahar said.
“Water trading is a critically important tool to manage water resources in the Murray-Darling Basin. Basin trade is worth more than $1.8 billion annually.
“We know there are significant problems that are undermining the trust of farmers and the integrity of the market. But the water market is very complex, and we need to make sure that by solving one problem, we do not inadvertently create more. We need to do this properly.”
Mr Mahar said while the NFF acknowledged the market had evolved to a stage that current arrangements were not necessarily fit-for-purpose, it was important to remember that the water market was very different to the ASX.
“The ACCC has found that the market lacks accessible quality information, there are few rules governing how market participants should behave and it does not adequately protect against market manipulation. The current market rules could better reflect the physical constraints of water systems.”
“The ACCC found no evidence of market manipulation or insider trading. However, it is important we have a system that farmers can have confidence in.”
The ACCC made 29 recommendations. One key recommendation is a new independent Water Markets Agency to oversee trading, market integrity, and ensure water markets are efficient and fit-for-purpose.
Mr Mahar said the NFF needed to consider and better understand what this would look like and how it might work.
The report’s other recommendations go to regulating market behaviour; a mandatory code of conduct for water brokers and exchange platforms; improving the transparency and accessibility of market information, as well as the architecture of the market itself.
“These recommendations and the broader 700-page report will be comprehensively assessed by the NFF and we will continue to work closely with our members, government and stakeholders to make sure we get this right,” Mr Mahar said.