The NFU and Cranfield University have produced a joint report that identifies opportunities for water trading as part of an ongoing abstraction reform.
The report describes the current understanding of Defra’s proposals contained within its abstraction plan and summarises how trading fits into the current abstraction licensing system.
It identifies the 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 suggests it will need the ‘buy-in’ of abstractors, and so 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: “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.”