Watershed or water shared? An inquiry into the politics of rural water allocations in Victoria

This thesis explores the politics associated with rural water reform in Victoria. The specific focus of the thesis is on the period from 1980 through to the time of submission in May 2010. During this period, the rural water sector has undergone radical reform in Victoria. Initially, reforms were driven by a desire to improve the operational efficiency of the State’s rural water sector. With the growing realisation that water extractions were pressing against the limits of sustainable yield, the focus of the reform agenda shifted to increasing the economic efficiency derived from every megalitre of water. By early 2000, the focus of the rural water reform changed as prolonged drought impacted on the reliability of water supply for the irrigation community. The objective of the latest round of reforms was to improve the efficiency of water usage as the scarcity became more acute. To deal with many of the intractable problems confronting the rural water sector over this period government turned to the neoclassical economic paradigm. The gradual application of market principles throughout all levels of the rural water sector to drive efficiency is giving rise to growing discontent amongst rural water users. This has provoked increasing resentment over the intrusion of the “market” into seemingly every element of rural life. As the water market drives structural reform across the once heavily protected rural sector, farmers have looked to their peak representative body, the Victorian Farmers Federation, to defend established patterns of resource usage. As governments responded to concerns about the environment, the Victorian Farmers Federation was forced to make a number of compromises to protect the security of its members’ water rights. Many members found the compromises unpalatable and became less loyal to the VFF. At the same time the robust political allegiance between the VFF and National Farmers Federation was severely tested by the Council of Australian Governments’ broader rural water reform agenda. In addition to the obvious self interest that rural water users have in this policy process, there were underlying issues at work.