This brief is based on a presentation by ABARES’ Executive Director to the National Drought Summit in October 2018 describing the effects of the current drought on Australian agriculture. The brief summarises the extent of rainfall deficiencies and the effects on crop production, livestock markets and farm incomes.

This study used the ABARES water trade model is used to simulate what would happen to the water market under a repeat of the Millennium drought, with current water demand, environmental water recovery, trade limits and carryover rules.

The model provides a basis for separating the effects of historical climate, market and policy shocks on the southern Murray-Darling Basin (sMDB) region, and for simulating the effects of potential future shocks.

The ability to carry water over between years can increase the efficiency of water use if the rules governing water storage and water allocations are well defined. This report examines water right accounting rules in the Murray-Darling Basin, specifically rules around water storage (also known as carryover) and water allocation decisions. These rules vary significantly...