Murray Darling

Fish are dying and South Australia is furious as Australia’s river management systems fail us yet again. How do we figure out how to manage the Murray Darling Basin? 

There are three main schools of thought. One is market forces — let water be traded like a commodity. The second is to use the force of the law: ban cotton farming, some say; ban water trading, say others.

The third school of thought is to learn from systems that have worked elsewhere, however theoretically impure they may be.

The water market

The use of market forces in the basin has a history that goes back to 1995 when a cap was first put on water use and water was first allowed to be traded.

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Market forces were in ascendance throughout the neoliberal 1990s and 2000s. But they ran into an agrarian socialist roadblock named Barnaby Joyce. The Basin Plan was buying back farmers’ water rights in order to provide water for the environment. The former minister for agriculture put a stop to such trade with a freeze on buybacks.

Markets are efficient and nimble — but they can create externalities. Agricultural towns had been shrinking as farmers sold off their water rights and got out. With Mr Joyce’s fiat they were somewhat protected from that. Water could still be traded among users but additional buybacks for the environment were frozen.

The law

Legislative decree has always played a big part in the management of the basin. The original 1915 River Murray Waters Agreement was signed in law and provided a guaranteed flow of water to South Australia. The 1995 cap on use of water was a law. The Sustainable diversion limit established in the 2012 basin plan is a law.

In the history of the basin legal action has not been unknown. South Australia and NSW have been regular litigants

In the aftermath of the SA Royal Commission we see proposals to use the law again – this time to ban cotton farming.  Laws are blunt tools and they don’t necessarily provide the flexibility a dynamic system needs.

The other way

To see a third approach, we go to Spain. Stop outside the apostle’s door of the Cathedral of Valencia on a Thursday morning. There you will see the Tribunal de las Aguas de la Vega de Valencia.

Eight men in black robes pull up chairs in a circle and begin their discussions. Each is elected and represents the interests of the locals on his (or, very rarely, her) section of the greater irrigation area. They make rules and issue fines.

In the large and mostly dry river valleys of southern Spain, water management is survival. And the water management institutions there have experience. They go back so far historians are unsure when they even began. The best academic judgement is that it has been going 1000 years at least since when the Moors were in control, based on the Islamic features of the Tribunal de las Aguas de la Vega de Valencia. (This ancient tribunal and others like it that dot southern Spain were recently made part of the world’s intangible cultural heritage by UNESCO.)

Spain’s water tribunals have survived conquest, plague, wars, fascism and even contemporary capitalism. As an illustration of how to overcome the tragedy of the commons they are invaluable. Had those water management systems collapsed, civilisation would have followed. What can Australia learn from them?

We do not come at this problem unguided. The 2009 Nobel Prize for economics was handed out for study on exactly this problem. The prize went to one of the least heralded and most swiftly forgotten Nobel-winning economists — Elinor Ostrom. 

Ostrom showed that the tragedy of the commons was not inevitable. In situations seemingly set up for disaster she showed that humans can manufacture triumph. She catalogues successes in managing scarce common property — from Alpine meadows in Switzerland and forests in Japan to giant subterranean aquifers in California. And more than that she tries to figure out why .

Almost nobody cites Elinor Ostrom these days. Why did Ostrom fall from grace so swiftly? Was it because her research was short on mathematics and failed to fit the mainstream mould? Because it rejected both pure market and pure government approaches? Because she was a woman? 

Ostrom’s brilliant book Governing the Commons is largely on water management. And it spells out lessons. The big lesson of the Tribunals of Southern Spain is transparency. These tribunals meet in public and anyone can listen.

In this context the reports by South Australia of a lack of transparency from the Murray Darling Basin Authority are extremely concerning. Banning staff from talking to the royal commission is not a good look.

The lack of trust in the Murray Darling Basin Authority is evident in the fact that South Australia even called a royal commission — even before you see its damning findings.

South Australia bears the brunt of overuse of water upstream. And it lacks power.

Ostrom’s many examples of success include irrigation canals in the Philippines where the official in charge of the canal is given the land at the very end of the canal to farm. This acknowledges the inherent disadvantage in being downstream in an irrigation system.

There is no such system to balance power in Australia. It’s like a game theory situation in which South Australia moves second every time. And what’s more, it sends fewer Nationals MPs to Canberra.

Solving the inherently underpowered position of South Australia (and the sensitive environmental resources it contains) will require more than just legal remedy and more than just market forces. It might require water bureaucrats to think creatively.  I recommend all of them read Elinor Ostrom.

Which way should we be running with to save the Murray Darling? Write to with your full name and let us know.