Water

Understand how leasing works

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June 09, 2017

How water products have advanced in the water market and the differences between forward selling and leasing water were the main topics of Kilter Rural’s water business development manager Rod Luke’s speech at the Murray Dairy event.

How water products have advanced in the water market and the differences between forward selling and leasing water were the main topics of Kilter Rural’s water business development manager Rod Luke’s speech at the Murray Dairy event.

Mr Luke urged irrigators to make sure they knew what they were getting into before going ahead with leasing water.

‘‘You need to understand when you’re leasing water entitlements, it comes with entitlement storage fees and you’re comparing that to a forward sale product, which is an allocation product, that normally doesn’t have any additional fees,’’ Mr Luke said.

No additional fees is not the only advantage of forward selling.

‘‘There is cash flow benefits in that you don’t have to pay for water until you use it,’’ Mr Luke said.

He also said it was important to write down details of the leasing contract just in case anything happened.

‘‘I urge you to put your name on leases which provides security for when you may need to access the lease.’’

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