Fluid wa­ter prices keep rice on pro­duc­tion roller­coaster

The Weekend Australian - - THE NATION - SUE NEALES

Shel­ley Scoullar is fed up with be­ing told by city slick­ers that it is im­moral to grow rice in Aus­tralia be­cause wa­ter is scarce and rice crops are thirsty.

A pas­sion­ate rice­grower from Mayrung, east of De­niliquin, NSW, Ms Scoullar says such claims ig­nore the mas­sive change that has shaken Aus­tralia’s $1.1 bil­lion rice in­dus­try to the roots in the past decade.

Rice farm­ing in the Mur­ray and Mur­rumbidgee val­leys where the in­dus­try is based has be­come much more wa­ter-ef­fi­cient, with Aus­tralia’s 1200 rice­grow­ers us­ing only half the vol­ume of ir­ri­ga­tion wa­ter to grow a hectare of rice as their overseas coun­ter­parts.

The big­gest trans­for­ma­tion has been wrought by mod­ern wa­ter eco­nom­ics, the $13 bil­lion Mur­ray-Dar­ling Basin Plan and the re­turn of more than 2000 gi­gal­itres of ir­ri­ga­tion wa­ter ev­ery year from pro­duc­tive use by farm­ers to help re­store river health.

Ms Scoullar says rice has changed from a crop planted with­out fail ev­ery Oc­to­ber with the wa­ter needed to flood farm pad­dies guar­an­teed, to one now grown by farm­ers only af­ter wet win­ters and springs when the big Mur­ray river stor­age dams are full and the price of wa­ter low.

“Last year, two weeks be­fore we were due to sow, we dropped 10ha of rice off our plans and only planted 130ha be­cause we were only cer­tain of get­ting 30 per cent of our wa­ter (en­ti­tle­ment) and knew that if we had to buy in ex­tra wa­ter over sum­mer to fin­ish our crop at $150/ML, it would not be worth grow­ing,” says Ms Scoullar.

“That’s what most peo­ple don’t re­alise; with less wa­ter in the pro­duc­tive pool, much less rice is be­ing grown in years when wa­ter is ex­pen­sive; you could ar­gue those price sig­nals around wa­ter scarcity are how the wa­ter trad­ing mar­ket and Mur­ray-Dar­ling Basin Plan is sup­posed to work.”

The down­side of such un­cer­tainty is that rice pro­duc­tion has be­come highly vari­able and volatile from year to year.

At the height of the drought in 2009, just 19,000 tonnes of rice were grown in Aus­tralia, and the De­niliquin rice pro­cess­ing mill — the big­gest in the south­ern hemi­sphere — was moth­balled for 18 months and its 170 work­ers laid off, with dev­as­tat­ing im­pacts on the town.

In 2013, af­ter mas­sive rain and floods, rice was sown across a record 110,000ha of the Rive­rina and Mur­rumbidgee Ir­ri­ga­tion Area with a mas­sive 1.1 mil­lion tonne crop worth more than $800 mil­lion har­vested.

By 2015, high wa­ter costs squashed pro­duc­tion back to 244,000 tonnes, fol­lowed by a bounce back to 802,000 tonnes last year.

This year, a re­duced 600,000 tonnes of rice is ex­pected when the head­ers start slash­ing in May.

“This volatil­ity does make me an­gry; the rice price is good at $350 a tonne and there are young grow­ers out there who want to have a crack at rice but who can’t risk the un­cer­tainty around wa­ter prices,” says Ms Scoullar.

“There’s the food side of it, too; if rice pro­duc­tion drops 30 per cent in the Rive­rina be­cause of the wa­ter cuts, that’s 334,000 tonnes of rice that won’t be ex­ported by Aus­tralia a year — and that’s equal to a bowl of rice each for two bil­lion hun­gry peo­ple.”

Rice­grow­ers of Aus­tralia president Jeremy Morton fears the pro­duc­tion roller­coaster is get­ting worse as the Mur­ray-Dar­ling plan bites harder and rice­grow­ers com­pete with cor­po­rate farm­ers with big al­mond or­chards down­stream, but who have deeper pock­ets to pay for ex­pen­sive wa­ter.

“Rice farm­ers want to grow rice — the in­dus­try would love to have an­other 1.2 mil­lion tonne crop — but I’m not sure we are go­ing to see that again with the wa­ter mar­ket go­ing the way it is,” Mr Morton said.

DAVID GERAGHTY

Shel­ley and Paul Scoullar, with sons Jack and Lach­lan, stand in a rice paddy on their De­niliquin farm, where pro­duc­tion is gov­erned by the wa­ter price

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