Where does all the water go?

Irrigated agriculture is the major water use in the Murray-Darling Basin, accounting for around 80-90% of water extraction, with the rest used for town water supplies and other industries (Australian Bureau of Statistics). 

The Murray-Darling Basin produces $30 billion worth of food and fibre every year, some of it sold within Australia and some exported. There is no guiding policy regarding what is grown, rather decisions about what to plant are made by individual farming operations based on economic conditions and water availability. 

There have been significant changes in the demand for irrigation water in the Basin over the past 25 years. In the northern Basin cotton production has remained a dominant player, usually able to out-compete other growers for available water due to high commodity prices.

In the southern Basin we have seen an increase in cotton and almond growing and a decrease in rice, dairy pastures and grapevines. 

Cotton

Around a quarter of the water used for irrigated agriculture in the Basin in 2020-21 was used to grow cotton. Ninety-three percent of Australia’s cotton is grown in the Basin, the majority of this in the northern Basin where the less reliable supply of water favours annual crops that can be grown in years when water is available. Cotton farms often rely on largescale floodplain harvesting (link to FPH page), with significant impacts on river health and downstream communities.

Cotton requires around  7.5-10 ML of water per hectare.

More than 90% of the cotton produced in Australia is exported (DAF website). Despite cotton’s reputation as a highly profitable crop, The Australia Institute’s 2021 report “Pulling the Cotton Over Your Eyes” found that major cotton producers rarely pay significant amounts of company tax, with ATO data showing Namoi Cotton Co-operative accumulated $2.8 billion in revenue between 2013 and 2018, yet paid no company tax at all. The industry’s ability to capture vast volumes of floodplain water while contributing negligible public revenue through taxation underscores the extent to which cotton’s private profits come at a profound public cost. This raises questions around whether it is in Australia’s interests to be converting valuable water resources into a commodity to be exported, effectively exporting Australia’s water.

Almonds

The area planted with almond trees in the southern Basin increased from 3,500 hectares in 2000 to around 66,100 hectares in 2024, a nearly twenty-fold increase. These plantings are mostly located in the Victorian Sunraysia, New South Wales Riverina and South Australia Riverland regions. 

In 2019-20 Australia produced 104,000 tonnes of almonds valued at $734 million, around 95% of these were grown in the Murray-Darling Basin. Over 70% of the almonds produced in Australia were exported.

The increase in almonds has increased water demand in these regions and resulted in changes to the way water has been delivered downstream. The permanent nature of the plantings adds long term pressure to water demand, if the crops are to continue to produce.

Almonds require an average of 12.5 ML of water per hectare per year. Based on that average water use, the 66,100 hectares of almonds now under production will require around 825 GL of water per year. This is equivalent to 7.4% of the Basin-wide Sustainable Diversion Limit. The high value of almonds and the large scale of many almond growing operations, mean almond growers can out-compete other water users in the water market, leading to reduced availability of high security water entitlements for other growers.

Irrigation dams near Wee Waa, NSW. Credit: Max Phillips