Research highlights water trading opportunities


The NFU and Cranfield University have produced a joint report that identifies opportunities for water trading as part of ongoing abstraction reform.

The report (read it here) describes our current understanding of Defra’s proposals contained within its abstraction plan; summarises how trading fits into the current abstraction licensing system; and 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 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 that publication of the report was really timely.

“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," he said.

“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 this newly published report.

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