With the 2008 vintage looming high on the horizon, it is perhaps truer that ever before that water, its price and availability, will determine whether the industry looks towards the coming harvest with optimism or pessimism. Recent news concerning the allocations of irrigation water by the States into key irrigation regions shows there is anything but a level playing field between growers on different sides of political borders. Furthermore, the price of buying spot allocations from those rare operators prepared to sell water they do not need has increased over the last few weeks from $500 to around $1000 per megalitre. Here’s a summary of major national water allocations as they affect grape growers. New South Wales has granted Griffith a massive 60% of its usual allocation, while growers in inland NSW will receive only around 12.5%, based on a complicated system involving suspended allocations from last year. These allocations are based on the relatively high levels in major dams of the Murrumbidgee system. At time of writing, Burrinjuck is at 41.9% and Blowering at 27.7% of capacity. On the other hand, growers in Victoria’s Sunraysia area will receive a mere 5% of water, which could well challenge the ability of some vineyards to survive the season intact. Just across the river in South Australia’s Riverlands, however, the South Australian Government has allocated 13% of usual rights, a figure that is likely to increase to around 30-40% throughout the season. In other words, Victorian growers are copping it hard, as they pay in 2007/2008 for their State Government’s decision to allocate a whopping 95% in 2006/2007. More than others, it’s likely that Victorian growers will be seeking to augment their minimal allocations by buying water from others, but at $1000 per megalitre, it becomes a challenge to make a financial return. Some may be forced to do this, just to protect their assets. However, a check at time of writing showed that while there are over 300 buyers to have registered interest, there are just 6 potential sellers. Clearly, it is essential for Australia to institute a national scheme that is able to allocate water on a fairer and more transparent basis than that which currently exists.
