Historical aspects of irrigation agriculture and river regulation in the Murraay-Darling Basin,Australia

River regulation in Australia is a feature of the last on hundred years. Irrigation farms were established along the River Murray in the 1880's and on the Murrumbidgee in the first quarter of the twentieth century. These demonstrated that such labour-intensive types of farming were unprofitable in Australia. The additional profits obtained by irrigation farmers were not sufficient to pay for the reservoirs and distributary works required and these had to be paid for by the State. Water was sold to farmers at a price which was only sufficient to maintain the projects. Political pressure led to a further increase in the consturction of reservoirs and the area irrigated in the Murray-Darling basin expanded from 0·6 million hectaers in 1945 to 1·6 million hectares in 1979. As irrigation practices improved, farm profits increased, but the price of water continued to be based on the cost of maintaining the projects. This led to increased profits being built into the price of irrigated land. Low water prices encouraged farmers to over-irrigate and aggravated the problem of rising water tables and salination. It is argued herein, that the efficiency of water usage in irrigation could be improved by transferring the existing water rights from the state of irrigators, and making them transferable from one irrigator to another or from irrigators to other users at prices negotiated in a free market. Such a system would ensure that water was put to its optimum use, reducing wastage and minimizing detrimental effects of over-use. The water price established in such a market could be used to calculate whether the marginal returns from irrigation and other uses were high enough to justify the construction of new projects.