A review of rural water prices could erode farm profits, as the Queensland Competition Authority has warned farmers that water price increases are expected.
A review of rural water prices could erode farm profits, as the Queensland Competition Authority has warned farmers that water price increases are expected.

Rising water prices could erode farmers' profits

A REVIEW of rural water prices threatens to further erode farm profits, as the Queensland Competition Authority warns farmers to expect water price increases.

The QCA investigation into Eton SunWater and Seqwater irrigation water prices has recommended an increase of $17.07 per megalitre over the next five years.

Volumetric prices would also increase from $37.68 to $41.27.

The price increases would hit more than 300 cane growers who are connected to the water supply.

For North Eton grower Lee Blackburn the $17 increase is a mixed blessing - the competition watchdog was brought in after water scheme operators proposed a whopping $68 per megalitre increase.

"The price is already high. It's been good that the QCA has listened," Mr Blackburn said.

"(But) we need to get that price back down".

Even the smaller price increase would put enormous pressure on growers already crushed by low sugar prices and high electricity costs, Mr Blackburn said.

Many growers were already hesitant to turn on their irrigation systems because of water prices, he said.

With his crop using 300 megalitres of dam water a year, the price increase would sap and extra $5121 a year from Mr Blackburn's business.

 

QCA chair Professor Flavio Menezes acknowledged that water pricing was a contentious issue, and said they had taken into account the financial pressures on irrigators.

"It's important to remember that a pricing review has not been done for seven years, and this is the first time the government has instructed us to consider apportioning the costs of dam safety upgrades," Prof Menezes said.

But he said the ultimate decision on prices remained with the State Government.

A stakeholder workshop on the draft report will be held in Mackay on September 24.