Properties in permanent drought

It seems no time since exit packages were announced as an option for some to leave the industry. First announced, by the Federal Government, in September 2006 there was little or no interest in the $75,000 to “sell the farm and leave the industry”.

The RWGA lobbied Minister McGauran consistently and in September 2007 the Exit Grant was doubled to $150,000 + $10,000 for retraining and a further $10,000 as contribution towards relocation costs.

In December 2007 there was a change of Government and the lobbying continued. As part of the 2008 budget package, new Treasurer, Wayne Swan, made further changes, increasing the small block threshold from 15ha to 40ha and withdrawing the obligation for the irrigator to sell the property.

The scheme finally gained real traction. For many growers, worn down by the hardships of the ongoing supply and demand imbalance, the drought and the high cost of water, the package seemed the lesser of two evils and more than 170 applications were filed before the closing date of September 2009. One of the many “conditions” imposed on irrigators, was an exclusion period of five years during which the irrigation block could not be used to carry on an irrigation farming enterprise; nor could the grantee participate in any irrigation farming anywhere in Australia.

For most irrigators, that five year period will expire this year. Unfortunately, some of these blocks have now been stranded without water and without the possibility of other irrigators being able to acquire the property for irrigation purposes. Water Delivery Rights have been reallocated in some instances leaving no available capacity in some lines to return water to those blocks for any irrigated crop. These former irrigators now own a stranded asset with little or no likelihood of being able to sell.

It will be interesting to see what solutions may be found for these dust bowls, scattered across the region in the coming few years. The bitter irony of this is that the irrigators could not sell the properties during the drought, at anything but fire sale price, and those properties are now destined to be left in a permanent state of drought.

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