Trade-off analysis for restoring environmental flows through irrigation demand management

Abstract

The aim of this paper is to evaluate economic trade-offs of introducing irrigation demand management measures to modify river flows in order to mimic natural flow variations in the rivers. A number of irrigation demand management options were identified through the rigorous discussions with the key stakeholder groups in the Murrumbidgee Catchment. The impacts of alternative demand management options are presented in terms of a matrix of economic costs and associated water savings. The modelling results revealed that 10-15% of peak water use during summer can be reduced from the average total annual water use of 1400 MCM. However, this may result in reduced economic return or require private and public investments in the form of on-farm water saving technologies, canal lining or construction of en-route storage. However, if we value the saved water at current market prices, then benefits are expected to be higher than the costs involved. Among all other options, spreading water use over summer and winter season through new crop mixes promises to be the most cost-effective irrigation demand management option for improving seasonality of flow in the rivers. The study also found that increasing on-farm water use efficiency to reduce peak water use is in the farmer’s economic self-interest through reduced water inputs per unit of production; it will also help increase stream flows if suitable mechanisms for securing environmental flows can be implemented.