In Australia, historically, irrigation has been strongly supported through subsidies, price-maintenance schemes, tariff barriers and cheap water. Governments have invested heavily in infrastructure, with a tenfold increase in the capacity of major dams between 1940 and 1990 (Smith 1998). In the Macquarie Valley, the first weirs and their off-takes were constructed in 1896 to improve water supply for pastoral purposes. As the extent of water control structures increased, so did the potential for irrigation. Plans for the construction of Burrendong Dam were made in 1907 and 1934, but were consistently and heavily opposed by settlers on the Lower Macquarie River, who argued that the extraction of so much water would prejudice their established interests (S. Knight and Partners, 1984). By the early 1940s, a large number of river regulation structures and water off-takes had been constructed, and there was greater pressure on water agencies and the government to service an irrigation industry. Burrendong dam was authorised in 1946, and completed in 1966. The increased stability of river flows enabled the growth of cotton which was first planted in the valley within one year of the completion of the dam (Cotton Australia, 2004). The irrigation industry expanded rapidly from 17,500 ha in 1965-1969 to 85,577 ha in 1990 (Kingsford and Thomas 1995).
The CLD in Appendix 3 illustrates some aspects of irrigation development. An increasing number of people engaged in irrigation led to greater demand for the control of water resources so as to reduce the risk associated with variable river flows. This led to increased pressure on government to service the irrigation industry, raising the potential for irrigation and increasing the number of people involved in such activities.
Four other significant factors contributed to current pressure on water resources. First, the amount of water in the river was significantly over-allocated. In the early 1970s water licences were issued to attempt to regulate water extraction. However, two unusually large floods in the 1950’s influenced estimates of the amounts of water available in the catchment and the dam was re-designed to hold three times the amount originally intended (Knight and Partners, 1984). Licences were also granted even when it was apparent that demand would exceed supply, and many landholders in the Central Macquarie Valley began to subdivide their properties to obtain multiple licences (Masman and Johnstone 2000).
Second, in the late 1980s and early 1990s, changes in licence regulations enabled licence holders to sell the water allocated to them, rather than have the water licence tied to a particular piece of land. This allowed licence holders to sell water if they were not intending to use it themselves, increasing the likelihood of over-use (Crase et al. 2004).
Third, greater predictability through regulation of the water supply has resulted in increased expectation that water will generally be attainable. For example, irrigators may plant cotton at the beginning of a season without knowing whether or not water will be available to finish the crop. Later in the season they have argued that they will suffer economic loss without additional allocation of water. In some cases, it is believed that water that was supposed to have been kept as part of the allocation to other stakeholders has been given to service the needs of irrigation, despite objections from those other stakeholders (e.g. use of town water in October 2003).
Fourth, pressure on water resources is greatest during periods of low water availability, such as the 2001- current (2005) drought, resulting in significant conflict between water user groups (see Figure 4).