A Bendigo based broking firm is proposing a central exchange and clearinghouse, similar to the Australian stock exchange, for water trading.
H20X business development manager Craig Feuerherdt said while the government should not set up an exchange, there were at least four business in Australia, who currently run exchanges to varying degrees.
"These things are never going to be set up by just one person, it would have to be a tender process," Mr Feuerherdt said.
"The government should not set one up, they are not good at running these things."
Participants would still call different brokers for advice and transactions, as they did in the stock market.
"There are still plenty of stockbrokers, even though central exchanges have been around for centuries," Mr Feuerherdt said on social media.
"A central exchange would improve competition amongst brokers.
"A single exchange provides a central point of liquidity, full transparency, improved price discovery, lower counterparty risk, faster clearance and settlement and a more efficient market creating better outcomes for all and improved products."
The exchange would be similar to the Australian Securities Exchange, the ASX.
"An exchange is about handling money and assets - like the ASX, it would essentially be a clearinghouse."
He said it would need the appropriate regulations, and could leverage state water registers.
"A register is like the source of the truth and an exchange could sit on top of those registers," he said.
"It wouldn't get rid of brokers, they would still exist, but they would have to interact through the exchange, so it's transparent."
An exchange would also give greater transparency as to the depth of the market.
"When you go to the stock market, you know the market depth, you know how many shares are available."
An exchange would also prevent the listing of the same parcel of water, with several brokers.
"The people we have spoken to are quite positive about it, the biggest challenge is the industry.
"Most brokers feel they are going to miss out on something."
The biggest issue would be the cost of running the exchange, and how it would be set up.
"Would it be a private corporation or a public-private partnership, like toll roads, where the government also chips in money?" he said.
H2OX chief executive Lex Batters said the company felt a central exchange would solve a lot of issues around market efficiency, making it fairer for all.
"It could be set up with private money so as not to cost taxpayers anything," Mr Batters said
"You could operate the exchange on a user pays basis, with brokers paying to lodge trades, like water registers currently charge to process trades.
"Regulation could be paid for from the interest on funds held in escrow from trades and it would be self-sustaining."
And the proposal gained the cautious backing of southern Riverina prime lamb and cereal producer, Michael Hughes, although he said he would like a body such as the Australian Securities and Investments Commission to first step in and regulate the market.
"Everyone considers water to be a commodity so let's treat it like one," Mr Hughes, Morago, near Deniliquin, said on social media.
"Consider the options if water was as sophisticated as wheat or corn.
"Transparency, efficiency, sophistication and vision are all achievable."
The water market was in desperate need of regulation, potentially by a body such as the Australian Securities and Investment Commission.
As a regulator, ASIC would have the principals and the teeth to deal with any problems that arose.
"Water current falls under fair trading, that's for markets, store holders and shop fronts, not the trading of a commodity worth millions of dollars," he said.
Proper regulation would see opportunities for new forms of water products, reducing the debt burden and managing risk for the next generation.
"If we allowed the market to develop really quickly, we could see a lot of creative products, that would give people some real opportunities," he said.
"Currently, you can own, buy or lease water, but there still a much greater degree of sophistication needed.
"But you don't want to go too far down that track without some good oversight."
Once there was greater regulation, a central exchange for trades could be next, he said.
"Water is still viewed by many as a public asset.
"Maybe it's a concession we have to make to rebuild confidence and stop the innuendo and speculation resulting from the current system."
A central exchange would be helpful and could be set up without too much fuss, and in a reasonable amount of time.
But Griffith, NSW broker, KeyWater's Anthony McCloskey questioned whether an exchange was simply reinventing the wheel.
"I don't have concerns, but there are plenty of other options out there," Mr McCloskey said.
"There are other ways of improving the market that are simpler, such as information capture by authorities and compatibility of trade processing, that are easier and cheaper and would make marked improvements at a lower cost to the taxpayer."
Mr McCloskey said a single exchange was a more expensive option.
"Transparency seems to be the one that comes up, time and time again, but in terms of state exchanges being able to talk to each other and capture information will go a long way to increasing transparency and confidence in the market."
He said while there were plenty of options to be explored, the market was functioning as expected.
Low supply and high demand saw prices rise, while low demand and high supply saw them fall.
"Is it perfect?
"No, but it's doing what it's supposed to do."