Capacity sharing is an alternative approach to water allocation which involves allocating irrigators a share of storage capacity in major reservoirs as a well as a share of inflows into these storages.

The report, Capacity sharing in the St George and MacIntyre Brook irrigation schemes in southern Queensland, was released today by ABARE's executive director Phillip Glyde.

"The experience of the St George, and to some extent MacIntyre Brook irrigation schemes, has demonstrated that capacity sharing is a feasible and practical approach to water allocation," Mr Glyde said.

"While further work may be required to assess the suitability of capacity sharing in other types of irrigation systems, capacity sharing shows significant potential."

Capacity sharing has been in operation in the St George region in southern Queensland since 2000 and was introduced in the nearby MacIntyre Brook region on 1 July 2008.

To date, these are the only irrigation regions in Australia where capacity sharing has been implemented at the individual irrigator level.

ABARE interviewed a range of key stakeholders in these regions, including local irrigators, members of the finance sector and water utility staff.

Overall, ABARE says stakeholders were positive about the new system.

"ABARE hopes this report will become a useful reference tool for irrigators, water utilities and policy-makers who have an interest in alternative water allocation systems," Mr Glyde said.

The theoretical advantages of capacity sharing over traditional approaches were highlighted in the recent ABARE report Management of irrigation water storages: carryover rights and capacity sharing, released on 26 May 2009.

Queensland water utility SunWater has plans to expand capacity sharing into a number of other regions across Queensland commencing with the much larger Burdekin system.