Australia's $50 billion water market is booming, drawing global investors and offering farmers flexibility, but ongoing scarcity and record-high permanent plantings are raising the stakes of the next drought.
Australia has one of the few markets in there world where water rights can be separated from land, capped and traded, something that still causes angst in parts of the farming community, National Farmers Federation water committee chair and Finley dairy farmer Malcolm Holm said.
"But in essence, what it's enabled the whole thing to do is actually give farmers and industries flexibility," Mr Holm told AAP.
Selling water rights can take the pressure off farmers' and farming organisations' balance sheets when upgrading equipment, transitioning crops or undertaking succession planning.
However, with water-trading pushing growers towards higher value permanent plantings and government buybacks significantly reducing the volume of water available, the next drought could leave some producers high and dry.
