Research highlights water trading opportunities

The National Farmers’ Union (NFU) and Cranfield University have produced a joint report that identifies opportunities for water trading as part of ongoing abstraction reform.

The report has three main aims:

  • To describe the bodies’ current understanding of Defra’s proposals contained within its abstraction plan;
  • To summarise how trading fits into the current abstraction licensing system; and
  • Identify ways in which regulation could help the trading of water between different users by using ‘secondary markets’.
For water trading to become a cornerstone of sustainable water management it will need the ‘buy-in’ of abstractors. Therefore, an important part of Cranfield’s study involved talking to farmers to capture their perceptions and experiences of trading in practice.

Paul Hammett, NFU water specialist and co-author said that publication of the report was timely.

It builds on the ‘Water Bank’ initiative which the union ran during the summer drought allowing those with a water surplus to pair up with those in need.

This year’s agricultural drought resulted in a situation whereby, although many groundwater and river flows remained at ‘normal’ levels through the irrigation season, some licence holders ran out of water because they reached their permitted annual water volumes.

“Licence ‘flexibility’ introduced by the Environment Agency during the 2018 irrigation season allowed rapid decisions to be taken on applications for short-term and emergency trades.

“As well as offering immediate help to farmers facing water shortages, it provided valuable insight into the strengths and weakness of current trading practices,” he added.

The NFU and Cranfield University will (along with the Environment Agency) continue to gather lessons learned from the recent drought, and the ‘flexible licensing’ process, with a view to building on the key messages contained in the report.