Water trading could help farmers maximise value from irrigation resources

Irrigators on a farm in Roudham. Picture: Sonya Duncan.

Irrigators on a farm in Roudham. Picture: Sonya Duncan.


With so many competing demands for limited irrigation resources, farmers should consider the benefits of water trading, says ANDREW SPINKS, agricultural business consultant at the Norwich office of Brown and Co.

Andrew Spinks, agricultural business consultant at Brown and Co.Andrew Spinks, agricultural business consultant at Brown and Co.

In East Anglia, an increasing population, the environment and the needs of crop irrigation all compete for water.

Water, essential for achieving yield and quality in a range of crops, is key to the future of many of our biggest agriculture and horticulture businesses.

The need to develop and expand a water trading system is becoming obvious. Trading is an opportunity for abstractors to realise the full potential of the value of the water that they hold and to make sure that it is used as efficiently as possible for their business, which then has a knock on effect across other water-using businesses and the wider environment.

It is relevant to note that from 2003 to 2011, for 20,000 water abstraction licenses there were 53 trades. When looking at water cost we consider the abstraction charge, energy cost of pumping, and the depreciation of the infrastructure used to move it; but water value in a dry year is likely to be higher to the customer aiming to sustain crop quality and yield.

There are two methods of trading. We can trade entitlement of a licensed quantity between abstraction points. In this case we look for trades which abstract out of the same groundwater (hydrogeological) and also the same surface water (hydrological) zones. It can be difficult to find trading partners in this scenario, and it requires a complex application process to be completed.

The other option for trading is to physically move the water via a pipeline and record the amount traded between farmers using a meter.

This is still subject to consent from the Environment Agency, under the terms of their license the farmer tells the Environment Agency over what area they are irrigating, but this is a quicker and simpler application process. At the moment there is grant funding available for investment in pipelines and equipment, and we have assisted a number of our clients in accessing this already.

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