Water risk to 500 farms, dairy industry fears

About 500 dairy farms in northern Victoria could be closed under the water cuts proposed by the Murray-Darling draft plan. That figure is based on research commissioned and released by the dairy industry.

The dairy farm losses would slash milk production by about 700 million litres a year, back to drought levels, and threaten dairy processing factories in the state’s north. Small towns with such factories would be savaged if factories closed, it said.

The calculation that 500 farms could be lost is based on large cuts in the amount of fodder farmers could grow to feed herds in the Goulburn-Murray irrigation district. The report assumes that through water buyback tenders, Victoria would lose a pro-rata amount (43 per cent) of the 971 gigalitres in water savings still required for downstream needs in the southern system.

The report - presented at a dairy business forum in Moama last week - comes on the eve of a public meeting in Shepparton tomorrow to discuss the controversial plan to boost environmental flows through the Murray-Darling system by 2750 billion litres each year.

The Goulburn-Murray irrigation district is one of the nation’s major dairy areas and includes farms in Yarrawonga, Swan Hill, Shepparton and many other districts. It is home to about 1500 dairy farms, despite the loss of hundreds of farms and a large volume of milk production during the drought.

Chris Griffin from the Australian Dairy Industry Council, urged the government to meet the plan’s environmental goals through environmental works and better river management, instead of water buybacks.

The recovery in water storages and improved milk prices had created a platform to rebuild herds and lift milk production, he said.

But the proposed water cuts would hurt the northern Victorian industry. ”It puts pressure on regional processing, which is already under utilising capacity. And in a region where dairy is a high service industry, we will see a domino effect across the community - fewer jobs, business closures, declining population, decreased need for services,” he said.

Daryl Hoey from Katunga, north of Shepparton, said small towns would struggle to survive under the plan, while farms that remained would face higher charges for water and shire rates. Water buybacks should be ”suspended until at least 2015, until we know exactly how much more water is required,” he said.

”And the money there that’s been put aside for infrastructure savings, both on-farm and even river operations and connections, should be sped up so that we can get a far more efficient farm watering system and region.”

Last month The Age reported that the end of the drought had sparked a bit of a revival in the northern Victorian dairy industry, with dozens of dairy farms restarting over the past 15 months.

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