Finally the Rudd Government has shown some initiative on putting the Murray-Darling Basin on a more sustainable basis. It has taken them some time to do this, but they are finally beginning to move against the recalcitrant state governments.The Rudd Government is particularly keen on removing two barriers to water trading in Victoria:

■A limit that prevents more than 4% of water being traded outside an irrigation district.

■A limit that prevents non-landholders such as the Federal Government buying more than 10% of water entitlements in a system.

The Federal Government wants the rules removed so they do not hinder the Commonwealth's buy-back of irrigation water for the Murray-Darling river system.

Senator Wong has declared that the grants for small-scale farmers (those with less than 15 hectares of land) to cease irrigating would be paid only to farmers whose home state had abolished certain barriers to water trading. That means farmers seeking financial incentives ( worth up to $150,000 for each farmer) to quit irrigating will be unable to receive money from the Federal Government until Victoria removes a series of barriers to water trading.

Finally Victoria has been placed in the spotlight. The move forces the anti-reform Brumby Government to effectively choose between two groups of farmers in Victoria. It spits those farmers seeking to leave the irrigation industry ----farmers in Victoria's Sunraysia district---against those who wish to remain irrigating under the current trading protections, and politically wedges the Brumby Government between the two groups.