Case study 10 - Managing interception activities - hillside farm dams in New South Wales


On 21 September 2015, responsibility for water policy and resources was transferred to the Department of Agriculture and Water Resources - Administrative Arrangement Order made on 21 September 2015.

This website will be updated to reflect these changes.


Background and geographic area

This case study outlines the New South Wales Government policy for regulating the extraction of water using farm dams. This case study focuses on the management of interception based on the principles within the NWI Policy Guidelines for Water Planning and Management, section 3.6.5.

Statewide landholders in most rural areas are allowed to collect a proportion of the runoff from rainfall on their property and store it in one or more dams up to a certain size, provided the dam is on a hillside or minor stream. This is known as a 'harvestable right'. Harvestable-rights water can be used for any purpose.


  • Provide a framework for managing hillside farm dams consistently across New South Wales that recognises and minimises the potential impact on the environment and other consumptive users from rainfall runoff capture.
  • Manage hillside farm dams that have the potential to affect the level of licensed extraction from a system or can affect instream values based on location within the catchment.
  • Allow a level of on-farm flexibility and minimising regulatory red tape by a small percentage of rainfall runoff to be utilised without the need for a water licence.

Application of a risk-based approach to management

All rural landholders in New South Wales are able to maintain or build farm dams. In some cases, it was determined that the risk of environmental harm was minimal and these types of hillside farm dams that do not require a licence:

  • Existing farm dams have already changed the hydrology of a catchment and have been factored into water sharing plans through modelling and volumetric conversion processes. Therefore farm dams built prior to 1999, irrespective of size, as long as they are only used for stock and domestic watering purposes on the property where the dam is located and are located on a minor stream, are considered an acceptable risk.
  • Harvesting 10 per cent of runoff was also considered an acceptable level of compromise between basic rights, the environment and downstream water users after consultation amongst relevant state agencies, environmental groups and water user associations. Water access licences and water supply work approvals are therefore not required for harvestable rights dams of a capacity less than or equal to the Maximum Harvestable Right Dam Capacity1 (MHRDC) for that property, which is based on being able to capture 10 per cent of the average regional annual runoff for properties in the Eastern and Central Divisions of NSW and 100 per cent for properties in the Western Division, where there is very little runoff.
  • Farm dams of up to 1 megalitre in capacity are also allowed on properties approved for subdivision before 1 January 1999 where the Maximum Harvestable Right Dam Capacity is less than 1 megalitre.

Other dams that are exempted from the harvestable right calculations (but which may still require consent) include:

  • dams for the control or prevention of soil erosion (gully control structures) where no water is reticulated or pumped from them and where the size of the structure is the minimum necessary to fulfil the erosion control function
  • dams for flood detention and mitigation, provided that no water is reticulated or pumped from them; these dams serve specific functions only and should hold the water for only a short period during and immediately after floods
  • dams for the capture, containment and recirculation of drainage or effluent that conform to best management practice or are required by regulation to prevent pollution of water sources
  • dams endorsed by the New South Wales Office of Water for specific environmental purposes: this endorsement is required prior to construction
  • dams without a catchment, which include turkeys nest dams and ring tanks and are replenished by pumping from rivers or from groundwater.

Information requirements to achieve objectives

Rainfall runoff for New South Wales was modelled during 1997-98. This modelling included local evaporation rates and periods between rainfall replenishments. The results of this modelling were then cross-checked with local (NSW Office of Water) officers as a quality assurance measure.

An adaptive management approach was introduced through the Harvestable Rights Policy. The 10 per cent threshold (for the Eastern and Central Divisions) was based on best available science of the day. This threshold is designed to be reviewed with the availability of new or refined information on the likely impact of the capture of this level of rainfall runoff.

Compliance actions

As part of the implementation stage, an amnesty on existing farm dams was held. This was in recognition that, prior to the Farm Dams Policy, some dams of less than 7 megalitres capacity were exempt from licensing as well as some dams used for domestic and stock purposes even if they were greater than 7 megalitres.

For further details, refer to the Harvestable Rights Orders under section 54 of the Water Management Act 2000 (NSW).

Additional information

For further information on harvestable right dams in NSW, including the 'maximum harvestable right calculator' see

For further details on Harvestable Rights Orders under section 54 of the Water Management Act 2000 (NSW) please visit

For a copy of the Harvestable Rights Orders for the Western, Western and Central divisions please download

1A Maximum Harvestable Rights Dam Capacity (MHRDC) calculator has been established and can be found at maximum harvestable right dam calculator.