WHAT IS WRONG WITH WATER MARKETS?

By

Brian Chatterton

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Water is wrong with water markets? is an ebook available on Amazon Kindle and other formats. http://www.amazon.com/dp/B0093L918E/ It is available on all Amnazon sites.

Water scarcity is a growing problem in arid and semi arid countries from Egypt to Australia. For hundreds of years engineers have been building to increase water supply but we are now reaching absolute levels of water availability that cannot be enhanced by more engineering. Demand management is being forced upon us.
The neoliberal economists claim that a water market will automatically balance supply and demand through the price mechanism without any outside intervention. Australia has gone further along the path of water markets than almost any other country and their water market was tested and failed during the great Australian drought of the first decade of 21st century. The debate rages between the hard nosed economists who claim that the market is the best means of allocating water for increased efficiency and profit and those who argue that water is a human need and should be allocated on a more equitable basis.
In this ebook Brian Chatterton argues that the Australian water market has failed to meet its own objectives of increased efficiency and has burdened future generations of irrigators with greatly increased costs rather than profits. All this before one even discusses the questions of equity and fairness. A single generation of Australian irrigators who were lucky enough to be water users at the time the water resource was closed to new entrants have grabbed the water resource. It is estimated that this completely free gift of water rights from the Australian community is worth $28 billion. The 18,000 holders of these water rights are now demanding rent on this value from future irrigators while the Australian taxpayer is paying billions to purchase and cancel water rights in order to maintain their market value.
Australia has passed the point where the mistakes of the past few decades can be easily be unravelled but other countries have time to avoid the Australian model of water mismanagement.
A water market should not be dismissed out of hand as a means of managing demand but it should be a genuine market not the fake market introduced in Australia. Markets are a forum of exchange between producers and consumers but the Australian water market is an exchange between consumers alone where they trade entitlements to cheap water. The producer of the water, the Murray – Darling Basin Authority is not a player in the market. A real market where the producer sold water to irrigators would have some theoretical benefits but would still be costly.
Brian Chatterton suggests there is still time for other countries to develop a range of institutions to manage demand that would not be as costly as a water market and which would include fairness and equity.

Demand management is for farmers. They use most of the world's water resources – not just the soil moisture used to grow most crops but the underground water and water from rivers and lakes. The logic of the market place suggests that we should restrain the demand for this cheap water before we restrict the use of expensive water that is extravagantly applied to lawns and golf courses. Again we have economic theory creating an unreal world where we humans are expected to ignore our sense of right and fairness.
Brian Chatterton was Minister of Agriculture in South Australia, the driest state in the Australian continent. For the last 30 years he has worked in North Africa and West Asia which is the area of the world with the most acute water crisis.

Review of ebook on Amazon.

5.0 out of 5 stars prescient polemic of vital world concern number one, September 3, 2012

By Inge Wilson

This review is from: What is wrong with water markets? (Kindle Edition)

There is no life on Mars and living there is impossible because there is no water. All over the world, water is running out. Brian Chatterton was a former regional minister for agriculture and fisheries in an Australian social democrat government. His early career was in one of the driest countries in the world. He writes accordingly with great authority from a lifetime experience of drought and plenty. The Australian experience, which is described by a practitioner with inside and hands- on grasp of reality, shows just how important it is to learn from the mistakes in the past. Where water is concerned wrong policy results in extreme but not unusual circumstances to famine and death.
Balanced, pithy and written with the authority of an expert whose own livelihood has depended on the outcome of his own reasoning, this is a book which should be on the table of trouble shooters in the water area world wide. Chatterton knows what he is talking about. He was a sucessful producer of antipodean wine, wool, wheat. His current Umbrian podere has water management of an instructive perfection in a landscape as unforgiving as anywhere else in the world. The Pulcini Press has produced another world leading contribution to an aspect of dryland farming, showing more research results developed from studies first aired by the author in a work published by Cambridge University Press.

What is wrong with water markets? is now available as a paperback. It can be obtained directly from Pulcini Press for €5 plus postage. It is currently being translated into Farsi with an additional chapter that summarises a series of workshops given by Brian Chatterton in Tehran and Isfahan from the 20 th to 26th Fenruary 2015.