SA irrigators brace for 50 per cent cuts in water allocation as Murray- Darling crisis hits home

South Australian irrigators are expecting their water allocations to be cut in half from July 1, as the Murray-Darling Basin crisis hits home.

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South Australian irrigators are expecting their water allocations to be cut in half from July 1, as the Murray-Darling Basin crisis hits home.

Growers face the choice of finding funds to buy extra water at $500/ML, or cutting production and watching their plantings wither and die.

In public meetings held from the Riverland to Langhorne Creek, irrigators have been warned to prepare for a dry season.

The Murray-Darling Basin Authority says conditions are similar to autumn 2016, when basin-wide storage “bottomed out” at 28 per cent, and SA irrigators were only allowed to take 36 per cent of their water allocations.

Allocations in SA have been at 100 per cent for the past three years.

The authority’s head of river operations, Andrew Reynolds, said many irrigators in Victoria and NSW now faced zero allocations.

“With dry conditions expected through autumn, we’re anticipating people will carry over water where they can to shore up their supply into next year,” Mr Reynolds said.

In SA, “carry over” comes into play when the projected minimum opening allocations are 50 per cent or less. It means a proportion of unused allocations from the previous financial year can be drawn on.

SA Murray Irrigators chair Caren Martin, of Renmark, said that with NSW in drought, half of SA’s entitlement was no longer guaranteed.

“I daresay they'll go below 50 per cent, as a conservative opening,” she said.

Many irrigators are relying on water trading to finish crops or keep trees alive.

Water market advisory firm AITHER has held information sessions in SA, where director Chris Olszak said: “Prices definitely increased dramatically over the course of this year.

“So prices in the southern Murray-Darling Basin have hit around $500/ML, the highest we’ve seen since the Millennium Drought. That’s quite concerning given we’ve had good water availability this year, and it’s really what’s going to happen next year (2019-20) that is driving these high prices.”

‘Might mean turning off some sections of your property’

Waikerie wine grape, almond, citrus and avocado grower Greg Noble said allocations of under 50 per cent would be disappointing but most irrigators realised it would be a challenging season.

“It’s very concerning but the fact is we need rain and we need more water in storages,” he said.

“I think most irrigators would have realised opening allocations would be quite low.”

Mr Noble runs two properties, one at Oxford Landing near Waikerie and another at Mypolonga, growing wine grapes, almonds, citrus and avocados.

He said a major concern was how high the cost of leasing water would rise.

Mr Noble was one of many irrigators to take part in the Irrigation Industry improvement Program (3IP), which led to improvements in farm infrastructure, but also meant selling some of his water entitlements for environmental purposes.

Farmer Greg Noble on his property at Oxford Landing, near Waikerie. Picture: Tait Schmaal

“If we have low allocations, it’s likely to cost a lot to lease water, so irrigators would have to make some big decisions,” he said.

“It might mean turning off some sections of your property. I did that back in the Millennium Drought, I left some vines and some citrus plantings fallow for a few years.”

Mr Noble said one positive was that commodity prices were good, unlike during the Millennium Drought when there was a double whammy of very high prices to lease water coupled with low returns on produce.

“Citrus prices have been very good for the last few years, going up to $1000 a tonne for export navels last season,” he said.

“Grape prices have also improved in the last three years, with shiraz from the Riverland making $500 a tonne to $700 a tonne.

“Like a lot of other areas, we’re just hoping it will be a wet winter and spring, so we can get some inflows into storages.”