CORPORATE farmers that own substantial water rights, including...

CORPORATE farmers that own substantial water rights, including Tandou and PrimeAg Australia, are likely beneficiaries of the Murray-Darling basin plan because government water purchases are likely to push up water prices.

Analysts said rural services providers with water trading arms, including RuralCo and Elders, could also benefit from higher prices as well as a suggestion by the Murray-Darling Basin Authority that almost a third of the water it has targeted to return to the environment will come through investment in water infrastructure, The Australian Financial Review reports.

Wilson HTM analyst James Ferrier said the draft plan would be positive for large holders of water rights such as Tandou.

"It is simple supply and demand," Mr Ferrier said. "Some of the water they are going to take out of the Murray-Darling basin will be done through voluntary buybacks. There will be less supply but demand remains strong, which means prices for water rights should rise."

PrimeAg managing director Peter Corish said the company, which uses water entitlements to underpin its cropping activity, would not sell its water entitlements.

"Regardless of what may or may not happen, water is a good asset," he said. "The value of water will increase over time and competition for water use will only increase."
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