A study has found water buy-backs may be the best way to assure target water volumes will flow in to the Murray-Darling Basin.

The Water Act 2007 was designed to return more environmental flows to the Murray-Darling Basin and included both voluntary buybacks of water from irrigators and upgrades to Australia's irrigation infrastructure. Now, in a paper published in the Australian Journal of Agriculture and Resource Economics, associate professor Glyn Wittwer and senior research fellow Janine Dixon, from the Centre for Policy Studies at Monash University compared the policy tools, their results were strongly in favour of buy-backs.

"I think water buybacks are better than infrastructure upgrades," Mr Wittwer has said, “because buybacks cost between $1500 - $2000 per mega-litre, and the most optimistic estimates on the cost of infrastructure upgrades is that they'll deliver additional effective water at more than two to three times that cost per mega-litre."

That does not totally discount infrastructure upgrades, Mr Wittwer says much of the area was developed without pure efficiency in mind, he believes some government intervention is necessary to modernise facilities.