ALMOST a third of wine grape growers in Victoria's Murray Valley plan to quit agriculture in the next four years, according to a Australian Bureau of Agricultural and Resource Economics report.

Released last week, the ABARE report, written by Mark Chambers, confirmed the effects of drought and lower prices on farm incomes, with average profits for the region's growers reaching just $9000 in 2006-07.

The 1300 growers in the region, which stretches along the Murray River between Swan Hill and Mildura, produce about a quarter of all wine grapes crushed in Australia each year.

Mr Chambers said the average age of growers was 54 and about 80 per cent were small to medium-sized producers, with less than 20ha planted to wine grapes.

They had recorded an average loss of $10,000 - after deductions for depreciation and accounting for the value of family labour - compared to large farms, which realised a farm business profit of $91,000 in 2006-07.

All of the 31 per cent who planned to leave farming by 2013 fell into the small to medium-sized category.

Mr Chambers said just 14 per cent of growers intended to expand their involvement in the wine grape industry, while 10 per cent indicated they would look at diversifying or changing to other horticulture crops in the next five years. Another 8 per cent hoped to be retired or semi-retired.

"Land-use planning, labour shortages and the cost of irrigation infrastructure were identified as impediments to farm expansion by around one-quarter of growers surveyed," he said.

"Some respondents also reported that a lack of irrigation water and the viability of the industry were impediments to farm expansion in the region."

The report is based on interviews with 29 growers between October last year and March this year and is part of a series commissioned by the Grape and Wine Research and Development Corporation into the long-term viability of the industry.

It also includes a comparison with the Barossa region, where there was less diversification into other vine, fruit and nut crops, and smaller growers carried less debt.

Barossa growers produced proportionally more red grapes, had lower yields, received higher prices, recorded lower rates of return and were more likely to expect a similar involvement in the industry in five years, despite reporting an average loss of $29,000 for 2006-07, the report said.

But Murray Valley Winegrowers chief executive officer Mike Stone said the report cost growers $112,000 and told them nothing new.

He said the report relied on too small a sample.

"It says prices were low and unsustainable - we know all that," he said.

"Growers can't become any more efficient. The only way to have a strong, viable industry is (for winemakers) to provide prices that are sustainable."

GWRDC executive director John Harvey said the survey would be the last of its kind.

Mr Harvey said the rising cost of data collection and statistical analysis by bodies like ABARE and the Australian Bureau of Statistics meant the GWRDC could no longer afford to commission so many reports.

Feeling the squeeze: ABARE says small-scale Murray Valley grape growers are facing tough economic times.

 

*This news is a quote from the「WeeklyTimesNow」.