Khadamia

What are water brokers and what do they do?

    Doreen

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    Water is an essential resource we cannot live without-- but it is common knowledge that water is not available to everyone. This resource is limited, and therefore, water has become a commodity. People are now buying and selling water to survive during bouts of water scarcity. 

    For Australia, 2021 closed with reports of drought ending for the first time since 2017. On top of that, climate change has not been the best for Southern Australia. It started drying out, particularly during winter, while Northern Australia got wetter. 

    Australia has always had to rely on the Water Trading system because of its frequent experiences with droughts. In the years 1982 and 1983, widespread drought hit the nation and the need for water reforms emerged. The people began to accept the notion of separating water rights from land rights. And that is when the concept of water trading began to flourish. It first began to emerge in South Australia, New South Wales, and Victoria. 

     

    Water Trading: Concept and Benefits

    Water trading is the process of selling and buying Water Rights by individuals who own properties with access to water. The terms of the trade can be permanent or temporary. Water trading is an efficient and sustainable method. It allows the use of water in places where it is most needed. One can trade different types of water rights in the water market. From Water Access entitlements to Irrigation Rights and Water Delivery Rights-- they are all arranged and exchanged legally. 

    Water trading also provides us with many benefits, and here are some of them:

    • Irrigators: Farmers, especially, benefit from water trading because it helps them ensure water supply during droughts. They can continue being productive and do not incur losses. 
    • The Environment: The system of water trading can potentially improve the in-stream quality of water. It is a sustainable way of saving and using water efficiently. 
    • The Economy: Water trading generates billions of dollars for the country’s economy. Water sales turnover of $6 billion was estimated for the year 2020-21. The demand for water increases every year and the price of water increases along with it. Also with a constant supply of water, the agricultural sector is more productive. This contributes to more export of agricultural products all year round. 

     

    Water trades happen in a specific platform called Water Markets. Water Markets comprise of two important aspects, Brokers and Exchanges. 

    • Exchanges act as a platform that matches buyers and sellers through an automated process or a bulletin board. 
    • Meanwhile, brokers are similar to mortgage brokers, who investigate trading options and arrange necessary paperwork on behalf of their clients. 

    Let’s take a closer look at what Water brokers do in the water trading business.

     

    Water Brokers In South Australia (SA)

    Before the advent of Water trading, water brokers were real estate agents. They were among the first professions to be introduced to water trading. Once water rights were separated from land rights, they saw an opportunity to begin water broking and Water Broking organizations were formed. They are comprised of full-time water brokers, real estate agents with some exposure to local water markets, large businesses with substantial water assets, and neighbors who trade ‘over the fence

    Water Brokers engage with water markets daily. Their job is to identify trading opportunities on behalf of the clients, across valleys and state borders. Many water brokers build systems that help clients to find information that will support their decision-making

    While the industry is not regulated, Water brokers in South Australia are obligated to work under the rules set by the Australian Competition & Consumer Commission (ACCC). A large percentage of the brokers become members of the Australian Water Brokers Association (AWBA), which ensures professional conduct for its members. 

    Some water broker organizations mainly deal with clients who are irrigators. One such organization is the Water brokers of Mildura, Ruralco Water Broker. Ruralco is one of Australia’s most experienced water broking firms. They offer services for temporary allocations and permanent water entitlements, providing cost-effective advice to their local irrigator clients.