Resting rebate not enough to solve industry crisis?

RIVERLAND politicians have called for urgent action to help the region’s wine sector, as a senior local industry figure suggests up to 25 per cent of the region’s growers have already walked away from production.

The stark comments follow a wine industry forum convened by Premier Peter Malinauskas earlier this month, which brought together key representatives of South Australia’s wine industry to discuss challenges facing the sector.

This was followed on Monday by an announcement from the State and Federal Governments, launching a fourth round of the Vineyard Resting Rebate, which provides $40/hectare for the costs of purchasing ethephon.

Chaffey MP Tim Whetstone said the State Government needed to address “structural adjustment” occurring across the Riverland.

“The ethephon rebate is a bandaid measure that doesn’t help growers or wineries in the long run,” Mr Whetstone said.

“Growers aren’t asking for handouts or more meetings that go nowhere.

“The long-term solution has always been no to low interest loans for structural adjustment, which could be coupled with the $28 million Rural Industry Adjustment and Development Fund.”

Riverland-based MLC, and opposition spokesperson for regional South Australia, Nicola Centofanti said “this announcement shows just how badly the State and Federal Governments are missing the scale of the crisis facing our wine grape growers”.

“After years of oversupply, rock-bottom grape prices and growers struggling to remain viable, Labor’s answer is a $40/hectare rebate to help them stop producing grapes,” Dr Centofanti said.

“That might reduce costs for another season, but it is not a plan for the future of the wine industry.

“The government says this will give growers “time and space to plan for the future”. The problem is growers already know what they need to do, many simply cannot access the capital to do it.

“It is extraordinary that the government can find money to help growers rest their vineyards, but continues to resist using an existing fund to help them actually transition.”

Speaking to The Advertiser last Saturday, Riverland Wine chair Brigid Nolan has warned the proportion of growers leaving the industry could reach approximately 40 per cent over the next one to two years, amid historically low grape prices and continuing oversupply.

“They’ve either removed (vineyards), turned off or are just walking away,” Ms Nolan said.

“Those numbers are very conservative, and governments think it’s market forces at play, but it’s not – it’s structural, it’s permanent – people aren’t just going to all of a sudden, if grape prices go up, plant grapes again.

“The skill sets and the average age of the people leaving are not coming back. It is more than market forces and it’s happening globally, and I feel that the failure to recognise that is incredibly frustrating.”

Ms Nolan said those producing red grape varieties were particularly being pushed to an economic breaking point.

“I think we’re going to see another 15 to 20 per cent – it’s going to cut down by about 40 per cent at least over the next one to two years,” she said.

“That will be a huge overcorrection but that’s what we’re seeing in the numbers now, certainly for the red grapes.”

The financial pressure is also forcing long-term Riverland growers to consider whether continuing production remains viable.

Barmera grower Jason Perrin told The Advertiser he was considering turning off three of his four vineyards and leasing the associated water entitlement.

Mr Perrin said even an improvement in grape prices ahead of the next vintage would be unlikely to overcome the financial pressures facing his business.

Ms Nolan said the consequences of the wine industry downturn extended beyond individual growers, with reduced grape income having a flow-on effect across the Riverland economy.

“The government has indicated they are not giving out hand-outs, they don’t want vine pulls, they believe it’s market forces and it will correct itself – and that’s just business,” she said to The Advertiser.

“But when you’re taking out hundreds of millions of dollars out of the community by way of grape prices, that money is not spent here anymore, so that affects everyone from the local shop owner to other local businesses.

“You only have to have a look at the mental health crisis that’s happening here, the farm household allowance is at an all-time high.

“It’s not about how much it’ll cost us to do something, the question should be what’s it going to cost if we don’t? If this money continues to come out of these rural communities every year, what is that going to do? It’s the rural communities that are suffering.”