Water supply and demand in the Southern Murray-Darling Basin
Customer challenge
The 2021 ACCC Murray-Darling Basin water markets inquiry highlighted a need for improved water market transparency in the southern Murray-Darling Basin. As part of this, the Victorian government (DEECA) had previously engaged Ricardo (formerly Aither) to release reports examining water supply and demand risks associated with permanent horticulture in the southern Murray-Darling Basin (2019, 2020, 2023). In 2025, the government sought an updated analysis which was comparable to previous versions. The report would also need to account for the latest developments in water policy in the analysis.
Ricardo's solutions
- Ricardo engaged with a variety of third parties to collect reputable, up-to-date data on current water availability, as well as current and future horticultural plantings. This included government departments, industry groups, agronomists and individual producers.
- Modelling was undertaken to determine how horticultural headroom is likely to vary under different climate scenarios and as existing and future plantings mature and have higher water demands. Amendments to the modelling were undertaken as needed to account for the latest trends in water policy and land use.
- Ricardo used industry knowledge to analyse how changes in market trends and policy are likely to have caused a reduction in horticultural growth. This analysis was used to predict how horticultural headroom is likely to continue to change in the coming years.
- Additional analysis was also done to assess how government buybacks can influence water availability for permanent horticultural use.
Customer benefit
Ricardo’s assessment provided an updated picture of the current level of supply of water and demand from permanent horticulture in the southern MDB under varying climate scenarios. The report provided continuity to previous versions while also taking major structural shifts to horticultural demand and future government buybacks into account to accurately reflect the current scenario. The findings were presented in a webinar which proved useful for updating the public on the current scenario. Overall, this report provides a more contemporaneous and up-to-date view on how dry conditions and water recovery via government buybacks can affect water available for permanent horticulture.
The report has been made available publicly by the department.