Irrigated agriculture profile: wine grapes

Irrigated agriculture profile: wine grapes

Industry snapshot

  • Around 80% of Australia’s grapes are grown in the Basin.
  • Wine grape production, wine making and wine tourism generate significant income and employment opportunities in regional economies throughout the southern Basin.
  • Wine grape prices have been generally trending downwards since 2001 due to increased competition in export markets and reduced demand.
  • Many growers who have exited the industry are those with less than 20 hectares of grape vines, with these farms likely to face the greatest short-term financial pressures, including debt servicing difficulties.
  • There has been a large increase in the number of wine grape farmers participating in the temporary water market, with the majority of farmers selling more water than they purchased.

ABARES wine grapes report

ABARES full report on irrigated agriculture in the Basin 

 

Irrigated agriculture is a major industry in the Murray–Darling Basin. To help build a picture of how irrigated farms are changing across time we are working with government agencies, organisations and communities to identify the social and economic effects of the Basin Plan and water recovery.

Wine grape growing is a key irrigated agricultural industry in the southern Murray–Darling Basin. Over time wine grape growers have been adapting to a range of factors including climate, a large drop in export demand and prices, as well as water reforms. The MDBA has begun gathering a range of information to help build a picture of the current state of the wine grape industry and growers’ experiences of adapting to these factors.

Key facts 2015

Information to date includes an Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report on wine grape growing in the Murray–Darling Basin, and workshops held with wine grape growers. Additional information collection and analysis will be completed in 2016 to understand the causes of trends and changes in the wine grape industry in the southern Basin.

ABARES has conducted surveys of irrigation farms in selected industries and regions in the Basin since 2006–07. The latest report presents a range of data collected from wine grape growers in the southern Basin since 2006. The report describes the characteristics of wine grape production, farm financial performance, water use and efficiency, water trading and irrigation technologies and investment.

In July 2015 the MDBA and ABARES held two workshops with wine grape growers from the southern Basin to test the findings of the ABARES report. Key findings from the workshop included:

  • at present the fundamental problem for growers is farm gate returns
  • there are diverse outcomes within the wine grape industry, depending on the variety grown, contract history, debt, financing, availability of skilled labour, capital, family structure, and ongoing structural changes
  • changes in technology (such as triple row sprayers) have affected employment and labour costs associated with wine grape growing
  • water trading is providing irrigators with greater flexibility to manage risks, although they are finding it difficult to compete in the temporary water market alongside growers of higher value crops such as almonds.

This combination of information gives the MDBA a much deeper knowledge of the wine grape industry in the Basin from both an industry and individual perspective. This mix of knowledge will help us to better understand how water reforms are affecting the industry. We will continue to work closely with industry on monitoring and evaluating the social and economic effects of the Basin Plan.