Drought and climate change are driving high water prices in the Murray-Darling Basin, according to one government economist.

Neal Hughes - a senior economist at the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) - says there have been many points of blame for those struggling in the Murray-Darling system, but one cause stands out above all others.

“High water prices have mostly been caused by a lack of rain,” he said.

Mr Hughes has gone back over market reforms, historical water use and prices, climate data and modelling to find out exactly why Murray-Darling water prices are at their current level.

His analysis is available here.