Irrigators say they were blindsided by council’s five-yearly review increase

Farmers are demanding answers after a 53 per cent price rise on a Central Qld’s council irrigation charges has increased water costs by tens of thousands of dollars.

Henrik Christiansen irrigates 120,000 macadamia trees on 340ha of land in South Yaamba. He said the impact of a new water pricing structure was significant.

A macadamia nut farmer on the Fitzroy River believes Rockhampton Regional Council has severely underestimated the impact of a 53 per cent price rise on irrigation charges.

Henrik Christiansen, who waters his 120,000 macadamia trees on 340ha of land in South Yaamba, said the impact of the new pricing structure on his bottom line was significant.

He said there were eight to 10 larger irrigators like him who would be seriously affected by the increase.

The fixed price for about 300 medium priority irrigators using council’s water from the Fitzroy River Barrage increases from $37.15 per megalitre to $56.96 per ML with a minimum charge of $300.

Henrik Christiansen said the impact of a new water pricing structure on his 120,000 macadamia tree plantation was significant.

“It’s essentially doubled our water cost.” Mr Christiansen said.

“We are not talking about stock water for a couple of horses.

“We are talking about agriculture production and people producing hay, lychees, mangoes and dairy.

“We are all using a reasonable amount of water that’s well over the minimum charge (of $300).”

A senior Fitzroy River Water officer who delivered a report on the new pricing at last week’s council meeting following a five yearly review told councillors that most of the 300 medium priority water users only pumped about 1 to 2 ML of water a year and would not be greatly affected by the increase.

He said the bigger operators in excess of 10,000ML operated commercial operations with substantial returns who pay far more in electricity costs than they would for water.

His report indicated that the price increase would only generate a total of about $55,000 a year for the council budget.

MacField Farm's 120,000 macadamia tree plantation on 340ha of land in South Yaamba.

Mr Christiansen questioned those figures saying his increase and that from a farmer down the road would alone amount to about $80,000.

“Somewhere there they have stuffed up their numbers,” he said.

“It’s a direct cost onto us you can’t offset (through price increases for product).

“That doesn’t happen in agriculture. That’s not how it works. Our (profit) margins just get squeezed.

Mr Christiansen said he and other irrigators were extremely disappointed about the total lack of consultation by Fitzroy River Water.

He said the first farmers knew of it was when they saw a story on it in The Morning Bulletin last week.

Mr Christiansen said since then they have had a good conversation with Rockhampton Cr Edward Oram and they were hopeful of a further meeting with FRW staff to better understand the reasoning behind the steep rise.

MacField Farm's 120,000 macadamia tree plantation on 340ha of land in South Yaamba, north of Rockhampton.

‘They seem to have had a change in accounting standards for how they account for their overheads,” he said.

Council’s report on the pricing said the structure for the charges was based on principles of “full cost recovery” associated with the Fitzroy River Barrage.

It said full cost recovery pricing consists of the recovery of operating expenditure, depreciation and a return on capital (return on investment and cost of debt).

The report showed barrage operating expenditure over a five-year review period (2019 to 2024) has increased from $2,694,050 to $5,031,838.

Council said late on Monday, December 2 it was currently reviewing the decision on water pricing as part of the Fitzroy Barrage Water Supply Scheme and would possibly provide an update the same week.

Originally published as Irrigators say they were blindsided by council’s five-yearly review increase