The front page of today’s Australian Financial Review (AFR) included the headline ‘Grape glut crushes winemakers profits’.
A record harvest of 1.92 million tonnes!
It seems amazing given the recent drought.
When I started working on Murray River issues in mid-2003, Prof Peter Cullen and other environmental scientists were telling farmers they should move from growing rice to growing grapes because water should go to higher-value crops.
I think there is something in the argument that the annual crop rice suits a land of ‘drought and flooding rains’ better than the perennial crop grapes because grapes need water every year.
According to the AFR “tax-driven vineyard schemes have helped double Australia’s vineyard areas in the past seven years, distorting the economics of the industry and leading to overproduction across the country.”
According to ABC Television’s landline program in April, some grape growers weren’t going to bother picking their fruit at all.
Jennifer Marohasy BSc PhD is a critical thinker with expertise in the scientific method.
Can I take up your comments on Professor Cullen and his associates in the Wentworth Group. I have read the linked document and don’t believe it supports your assertion they were “telling farmers” they should change crops.
In this document, Professor Cullen appears to be articulating the rationale for the establishment of the water market. He also provides comment on how the market has performed in delivering economic outcomes for farmers in line with that rationale and what lessons this may have for future market structures.
Was it your intention to link to a different document perhaps?
On page 16 Cullen advocates thatwater “go out of crops like rice and into high value crops like grapes…”. This was a general theme at that time and in the context of water markets. The concern of many farmers at that time was that while they may potentially receive more per tonne for grapes than rice, when everything was considered (including cost of production and stability of markets) they may be economically better off growing rice.
Very interesting, p4 of the transcript, “Our fourth solution is that Australians need to think about paying farmers for environmental services.”
Thats what they are now doing in the EU, in an effort to appear to be doing something about tariffs and subsidies they have “decoupled” production subsidies and now pay farmers for “environmental services”.
It’s still a rort and developing countries are effectively locked out of trading in the EU.
To be fair it was a meeting to canvass issues not set policy and Sen Heffernan did conclude that they were ill informed.
One item, whether to have an unregulated and tradable or regulated water market, appeared to be guided by unfounded fears of the “water barons”.
Another issue was to reduce red tape and bureaucracy, something which would be increased with a regulated market and public investment on private land.
A lot of emotional issues to contend with.
Gidday Jennifer,
What drought ?
Following our dry autumn, winter has seen average and above average rains over vast areas.
Interested readers can see a monthly sequence of rolling three monthly rainfall anomaly maps juxtaposed with the equivalent BoM Outlook prediction.
http://www.warwickhughes.com/drought/
Poor old BoM, could not run a chook raffle when it comes to these 3 month model predictions.
Last year I wrote to the BoM telling them their results were so bad they should abandon their 3 month Outlooks and pull back to a 1 month period where they could build some skill.
Their chief replies to say results are worse at 1 month.
Yet policymakers are conned by climate modellers with climate fairystories extending several decades out into the 21C.
If the models were so good the BoM would grab them with both hands to improve results with these 90 day Outlooks.
Best wishes to you,
Warwick Hughes
The reason we had a drought is because all the water is in the grapes!