Farmers reeling as drought set to leave multi-billion dollar hole in SA economy

A record low-rainfall year has left the state in drought, farmers struggling and the economy facing losses in the billions.

One of the worst droughts in living memory is set to strip billions of dollars from the state economy and some grain producers will go two years without an income because their crops are so bad.

Many farmers will get no return from crops they spent hundreds of thousands of dollars seeding as some pockets of the state are in the midst of the driest year on record.

Thousands of hectares of crops are so poor they can’t be harvested after the double whammy of record-low rain and devastating frosts.

The combination of no financial return from a harvest and skyrocketing costs of fertiliser, chemicals, insurance and council rates will push many farmers deep into debt.

The Mid North region around Laura, Jamestown, Booleroo Centre and Gladstone is the worst hit. Farmers in the far West Coast, lower Yorke Peninsula and South-East are also experiencing the worst cropping season in living memory.

Grain Producers SA chief executive Brad Perry. Picture: Supplied

Grain Producers SA chief executive Brad Perry said the year had been “a disaster”.

“We didn’t get opening rains, we didn’t get finishing rains and a lot of the growers that I’ve talked to, who keep rainfall records back to the 1900s, have said it’s either the worst or second worst on record,” Mr Perry said.

“I’ve had conversations where growers have said they would have been better off not putting a crop in at all. Input costs are quite high, so they spent a lot of money putting the crop in, and then it hasn’t grown.

“So they’ve just, you know, they’re just going to get hit with a big loss.”

Mr Perry said many farmers would be unable to even recoup seed from their crops so would be forced to fork out more money to buy seed next year.

He said there were few areas in the state that weren’t struggling and this year’s harvest would be one of the worst in more than 50 years.

Mr Perry said the 2024 harvest could be as low as four million tonnes, a reduction of nearly 50 per cent on last year and about a third of 2022’s record harvest of nearly 13 million tonnes.

Primary Industries Minister Clare Scriven. Picture: NCA NewsWire / Kelly Barnes

Such a low harvest would leave a “multi-billion dollar” hole to the SA economy.

“I think we’ll be down to an under $2 billion contribution (down from $3.3 billion last year and $4.8 billion in 2022),” Mr Perry said.

“So it will affect the state’s economy and I’m not sure that everyone realises that, and just how that’ll impact.

“When grain producers are having a bad year, it has flow-on effects. Farmers are not buying machinery, going to the bakery as much – they’re not spending that money locally.

“And so there’s going to be a lot of businesses and communities as well that are going to feel the pinch in the next 12 months.”

Peter McCallum at his farm in Booleroo Centre SA. Picture: Ben Clark

Primary Industries Minister Clare Scriven said the state government was taking “drought and adverse conditions” very seriously and would continue to meet with farmers across the state.

“There are also a range of measures currently in place to assist farmers and I encourage all primary producers experiencing financial difficulty to reach out,” she said.

“Many of South Australia’s farming districts are experiencing drought conditions and the state government is working closely with industry to identify challenges and explore actions to assist.”

Booleroo Centre farmer Peter McCallum said grain producers wanted the government to acknowledge there was a drought.

“I’m not asking for financial help,” Mr McCallum said. “But just (for them) to acknowledge the fact and just say we know you’re in trouble and we’ll try and help you.”

Originally published as Farmers reeling as drought set to leave multi-billion dollar hole in SA economy