In view of the relatively high costs of desalination, the provision of desalinated water to agriculture risks generating inefficiencies and costs to public finances. Unit costs are a multiple of current prices typically paid for the supply of fresh surface water even in these areas (MMA, 2007 a), even though technological progress has allowed the production cost to be reduced by about 50% over the past ten years according to government estimates. Desalinated water is supplied at subsidised rates. The high energy intensity of the production process may continue to constrain its development as a large scale water resource base and the environmental consequences of the residues of desalination are not yet fully understood.