Rising irrigation costs caused by surging power bills could destroy SA horticulture, industry leader says

RIVERLAND irrigators face soaring water costs because of surging power bills, which an industry leader says threaten to destroy SA’s horticulture industry and lead to fruit and vegetable imports.

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RIVERLAND irrigators face soaring water costs because of surging power bills, which an industry leader says threaten to destroy South Australia’s horticulture industry and lead to fruit and vegetable imports.

The Central Irrigation Trust is struggling with a $1.3 million surge in its electricity costs and will be forced to pass on the rise next financial year.

It is holding meetings to warn its 3000 households and 1300 growers of the hike, but chief executive Gavin McMahon said almond, citrus and grape growers were also being forced to shoulder power costs hitting companies that pack and process their fruit.

“We are trapped. This year the costs will have to be passed through, and that means our customers have to find the money, and that will come out of our community and go somewhere else,” he said.

Riverland Wine executive officer Chris Byrne warned the sky-rocketing cost of power could cripple the industry and the state risked the collapse of its dairy, fruit, vegetable, food and fibre producers.

“We’ll be looking to import products to this country, which will be a disgrace,” he said.

Mr Byrne described escalating power prices as “crazy”, saying governments had failed to collaborate and fix an ever-growing problem during the past decade, while primary producers languished at the bottom of the food chain with nowhere to pass on their costs.

Riverland Wine executive officer Chris Byrne warns the sky-rocketing cost of power could cripple the industry.

“At this stage, growers know this new power cost is coming down the line and we have to hope like hell we are being paid enough for our grapes this year to be able to absorb that further input cost,” he said.

The trust – a Barmera-based co-operative that pumps water to more than 14,000ha of horticultural crops – has been slashing costs as its power bill almost doubled in the past five years.

“Our business has tried to pull costs out, we’ve reduced staff numbers and we’ve looked at everywhere else we possibly can,” said Mr McMahon, whose organisation is owned by growers.

The trust’s total cost for power used to pump water and pressurise its piping network was $5 million this financial year, compared to $2.5 million five years ago, accounting for about 35 per cent of costs.

Mr McMahon said every part of growers’ businesses were being hit by power rises despite the Riverland region being “the fruit bowl of the state”.

“We generate a lot of income and export income for the state,” he said.

And the blow comes after severe weather last year caused havoc to the Riverland’s producers. Some grape growers lost 80 per cent of their crop as severe winds and hail lashed the region.

Domestic customers living outside the SA Water-supplied towns in the region — from Mypolonga to Renmark — were also being slugged by the irrigation trust’s costs.

Central Irrigation Trust chief Gavin McMahon says fruit growers’ businesses are being hit by power rises.

The news comes after The Advertiser revealed on Tuesday that Kilburn family business Plastic Granulating Services would close as it struggled with an electricity bill that had spiked to $180,000 a month.

Local MP and Liberal spokesman on investment and trade Tim Whetstone was appalled by the trust’s bill rise and called for urgent action.

“The Riverland is a major SA food bowl and the sky-rocketing electricity costs are hurting local businesses and, in turn, the state’s economy,” he said.

Agriculture, Food and Fisheries Minister Leon Bignell declined to comment on whether he had heard from the trust about the power bill, instead handballing questions to Energy Minister Tom Koutsantonis.

Mr Koutsantonis said the State Government had met with the trust about its concerns and urged it to apply for the $31 million in grants announced in December to help large businesses invest in energy-saving technology.

“Power prices are too high and that is being experienced by businesses across the country,” he said.

“In the absence of leadership from the Federal Government to fix the broken National Electricity Market, we are doing everything we can to bring down prices for business.”

Mr Koutsantonis said the SA Government’s $550 million energy plan was “aimed at fixing the root of the problem, rather than providing Band-Aid solutions”.