Fluid water prices keep rice on production rollercoaster
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.
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