EXEMPTIONS to Victoria's 4 per cent cap on water traded out of the state's northern gravity-irrigation districts have permanently drained the region of thousands of megalitres of high-reliability entitlement.
The trade of 131,393 megalitres equates to more than 8 per cent of the 1.6 million megalitres of high reliability water entitlements held in nine Goulburn Murray Water and Lower Murray Water irrigation districts.
These districts are covered by the 4 per cent cap.
At least 50,000 megalitres of the high reliability entitlements have been snapped up by the Federal Government this season under exemptions introduced by the Victorian Government in response to criticism that its 4 per cent cap was restricting trade.
The Federal Government has purchased 186,006 megalitres of Victorian high reliability entitlement since it began buying water in 2008.
It is not known how much of this water was purchased this season under the exemptions and the 4 per cent cap.
But Victorian Farmers Federation water council chairman Richard Anderson said it showed the Federal Government had plenty of opportunity to buy Victorian entitlement as part of its $3.1 billion water purchasing program to boost environmental flows.
"That's (gravity irrigation purchases) not even including all the water they can buy from our private diverters, who aren't covered by the 4 per cent rule," Mr Anderson said.
In contrast, the NSW Government has restricted its irrigators to selling a maximum of 60,000-megalitres of entitlement to the Federal Government, whether it is general or high-security water.
Water brokers have warned the 60,000 megalitre cap is helping drive down the price of NSW general security entitlement.
"Without question the market value of NSW general-security and probably high-security water would be higher," Wentworth Sunraysia Water Exchange broker Phil Grahame said.
"NSW general security irrigators have struggled to get allocation water and now they can't realise their asset's value."
The Federal Government sent out letters last week stating it could no longer buy NSW entitlement as the 60-gigalitre cap had been reached.
