Riverland Wine irrigators want to sell water: to survive or cash out

Almost one in four irrigators in Australia’s largest wine-grape growing region want to sell their water, amid a red grape glut.

Riverland winegrape irrigators have reached a tipping point, with 23 per cent willing to sell their water.

At least 23 per cent of irrigators in Australia’s largest winegrape growing region – South Australia’s Riverland – want to sell their water entitlements.

That number rose to 52.4 per cent of Riverland winegrape growers, who said yes when asked: Would you consider selling your vineyard and keeping the permanent water entitlement to fund your retirement or to start or purchase another business?

The responses formed part of a Riverland Wine commissioned strategic survey and water audit, which also found renewed federal water buyouts would push temporary water prices beyond the $400 to $500 a megalitre trigger that grape growers could afford amid a red grape glut.

The SA Riverland Wine Industry Blueprint strategic water audit found “the near term resumption of water buybacks from willing sellers across the (Murray Darling Basin) by the Australian Government will see more water removed from primary production and further exacerbate this demand and supply imbalance in the southern basin.

“There will be increased competition for temporary water entitlements in future dry years, with analysis suggesting that this will mean the price of entitlements will rise to over $1000 a megalitre, which is beyond the estimated financial capacity of Riverland wine grape producers to pay ($400-$500/ML),” it found.

SA Central Irrigation Trust winegrape grower Brett Rosenzweig said “at the moment, with winegrape prices where they are, $100 a megalitre is not profitable”.

Ultimately the Winkie irrigator said it did not matter where on the Murray (below the Barmah Choke) the Commonwealth bought water – “we are all connected”.

“(Federal Water Minister Tanya) Plibersek talks about buying from willing sellers, but if you look at winegrape growers who are selling water to raise cash, they’re not willing – they’re under duress,” he said.

Riverland Wines grower engagement officer Charles Matheson said many growers who were willing to sell their water entitlements were aged over 60, many of who had suffered enough during the downturn in red winegrape prices.

“Their risk appetite is pretty slim and their financial viability is virtually non-existent,” Mr Matheson said.

But he said his greatest sympathy lay with Punjabi families who had migrated to the region in more recent years and borrowed money from their temples to buy winegrape blocks.

“The Punjabi community has gone to ground,” Mr Matheson said.

In the meantime he said the industry was working out how to respond to the federal government’s push to buy more water entitlements out of the southern basin to boost environmental flows, amid the winegrape crisis.

“We’re having a big meeting in February, where all the players are coming together to discuss a 10-year plan,” Mr Matheson said.

Ms Plibersek and her department are also planning to exercise their new-found freedom to buy up to 700 gigalitres of water out of irrigation communities, after gaining Senate support to strip barriers to buyouts from the Federal Water Act.

Briefing documents prepared by her bureaucrats urge Ms Plibersek to recover no more than 100GL from the Northern Basin, over and above the 334GL already recovered, leaving the south exposed to being stripped of 600GL.

MDB Authority progress reports show 2107GL has already been recovered from the Southern Basin.