Grape growers sell water to stay afloat

GRAPE growers are being told to bulldoze their vines and are selling off their water allocations – the only marketable asset they have left – in a desperate bid to raise cash as the wine glut slashes returns across the industry.

Peter Gordon, from rural water and land brokers Gordon Agencies in Irymple, near Mildura, in Victoria’s northwest, said he had been inundated with grape growers wanting to sell their water allocations to repay debt.

But without access to water, those who sold their entire allocations were effectively ruling themselves out of ever farming again, he said.

„A lot of people are selling off their water and just keeping their house on the block, then getting a job, but they’ll never get back into growing,“ he said.

Michael de Palma, chairman of the Murray Valley Winegrowers Association, said many growers in the Riverina area, in southern NSW, had effectively abandoned their vineyards, leaving the paddocks untended while they took paid employment elsewhere.

Grape grower Keith Sharman, 45, from Red Cliffs near Mildura, said he had been trying to sell half of his 40ha holding since January but had not received a single inquiry, despite the next two years’ grape production being contracted to a winemaker.

„Nobody is interested,“ he said, even with an asking price of $10,000 an acre ($24,700 a hectare) — less than half the price it could have fetched three years ago. „If I don’t sell this 50 acres in the next few months, then next year the grapevines will get pushed out and it will be planted with almonds.“

Mr Sharman was able to sell all his vintage this year, but at only $300 a tonne – below the $350-a-tonne cost of production and down from the $1200 a tonne he was getting five years ago.

To pay the bills, he works as a contractor for other growers, while his wife works off the farm.

Dennis Mill, a grower from Gol Gol in the NSW Murray River region northeast of Mildura, said he was planning to tear out two of his 60ha of vines this year and possibly more next year if he could not find a buyer for uncontracted grapes.

„If we get to Christmastime and don’t have a buyer for it, we’ll pull the plug on it,“ Mr Mill said.

„We won’t irrigate it and we’llprobably knock it out.“

Estate agent Matt Mason, with Collie and Tierney First National in Mildura, said that now this year’s vintage was finished, he was bracing for an influx of growers looking to sell their vineyards.

But he said there was little hope of finding buyers for them as going concerns.

„We’ve been dividing them up, telling the seller to bulldoze their vines and selling them as 10-acre hobby-farm blocks,“ Mr Mason said.

Wine Grape Growers Association executive director Mark McKenzie said more growers were likely to quit their vineyards as the oversupply of fruit continued to weigh on returns.

„It’s going to be a decision that some people have to make if they don’t see a viable option in the next couple of vintages,“ Mr McKenzie said. „It’s a question of how long they can hang in there with little or no income.“

Source: theaustralian.news.com.au