groups, such as irrigators and urban water suppliers. Others are participants with formal roles in the Murray-Darling Basin institutional structure, such as the departments and ministries of the member States, the national government, and the Murray-Darling Basin Commission members and staff.

However measured, irrigation is a very large stakeholder group in the MurrayDarling Basin, but it is not a strictly homogenous group. Some irrigators are crop farmers (especially in New South Wales and Queensland) who have favored a fairly liberal granting of water licenses. They have been willing to accept less security and more variability in their water deliveries. On the other hand, there are irrigators with permanent plantings (orchards and vineyards, especially in South Australia and Victoria, also true to some extent of dairy farmers) with high capital investments. These irrigators have favored more restrictive granting of water licenses in order to maximize the security of water deliveries to license holders. On policy decisions such as state moratoria on granting licenses or the basin “cap” on diversions, these categories of irrigators had different interests—the former opposing and the latter generally supporting such decisions.

The irrigators have been more nearly united, however, in their opposition to the idea of real reductions in water licenses and diversions for environmental protection—for instance, as part of the “Living Murray” initiative. Irrigators with water licenses generally do not want them reduced or restricted from current levels in order to restore “river health,” which some regard as a rather abstract notion.

State and Commonwealth policy makers promoting the Living Murray initiative might be able to reduce irrigator resistance by offering expanded water trading, so that irrigators with insufficient water allocations might be able to acquire water from those with more than adequate allocations. Water trading is and has been allowed in each of the states on the River Murray—in South Australia since 1988, in Victoria since 1989, and in New South Wales since 1990.<sup>6</sup> However, other institutional aspects of MurrayDarling water management have placed substantial limits on the scope of water trading. Since water licenses are issued by state governments, trading has been essentially limited to transactions taking place within a state. Furthermore, many water licenses are issued to schemes (irrigation districts, trusts, or companies) rather than to individuals, and in those cases trading among individuals depends upon the rules of the scheme rather than the rules of the state. In some schemes, shares or votes correspond with water allocations, and the rules of the scheme may restrict a user’s ability to trade water.

In order to overcome some of these barriers and expand the scope of water trading (thus perhaps reducing irrigators’ resistance to the Living Murray initiative), the Council of Australian Governments (COAG) in June 2004 proposed the elimination of restrictions on water trading across states, and further proposed the elimination of restrictions on water trades out of irrigation schemes (i.e., allowing a member of an irrigation scheme to sell or lease water entitlements to non-members) (COAG 2004). If enacted in law, these proposals would mark a significant step toward the creation of a basin-wide water trading marketplace.

In addition to bargaining for more flexibility (e.g., in the form of expanded water trading), irrigators have used their resistance to reduced water diversions to bargain for

> 6 Australia Farm News (n.d.) “Water Trading and Pricing.” [www.farmweb.au.com/h2o/h2use9.html, accessed 3 September 2004].

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