The Socio-economic structure of Irrigation Communities – water markets and the structural adjustment process

Abstract

Structural adjustment is an ongoing process within Australian agriculture. Governments have encouraged this process through rural adjustment schemes and since the 1990s, water markets and pricing policies have been seen as drivers of the process. This paper investigates the structural adjustment impact of temporary water markets within the Pyramid-Boort and Torrumbarry irrigation districts in northern Victoria. This investigation is based on interviews with temporary buyers and sellers in the market during 1998/99. Descriptive statistics, factor analysis and cluster analysis are applied to the outcome of this process to group farm businesses depending on their position in the farm adjustment process. These analyses suggest that all sectors of the farming community use water markets to cope with the adjustment pressures. One group uses the markets to retain their farming lifestyle, another group uses it as part of the adjustment process to become larger and more viable, while a third group uses it opportunistically. The irrigators who are not using the market are significantly smaller and use all their water. The research outcome strongly supports that structural adjustment schemes should concentrate on assisting adjusting farmers to become economically viable and to adopt best practice natural resource management.