Cherry farm in Shepparton Victoria closes due to high water prices

Joseph Campanelli has been operating the 'Big Cherry' farm and fruit shop in the rural hamlet of Wyuna for nearly 20 years.

Key points:

  • Joseph Campanelli has ripped out and bulldozed about 3,500 cherry trees and is considering selling his property
  • With water costing about $500 a megalitre, other orchardists in the area are worried about their future
  • Dairy farmers in the region have also been hit by higher grain and hay prices

But he said rising water prices made it impossible for him to continue farming.

"It just wasn't sustainable. It's not worth it anymore," he said.

Water in Victoria currently costs around $500 a megalitre, a far cry from the $120 a megalitre Mr Campanelli paid last year.

"I didn't buy anymore because I couldn't afford it. When I rang up to order the water [this year], it was $450, then I rang up again and it was $520," he said.

In recent weeks, Mr Campanelli has ripped out and bulldozed about 3,500 cherry trees and is considering selling his property.

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"It's heartbreaking, but what do you do?" he said.

"I might have to sell it. I don't know … this is going to be worthless this property. You've got no water, land is worth nothing."

"It's my life, my lifeline, my future. I've got no future left."

Concerns for the region's future

The availability of water from the Murray-Darling Basin is the reason the Goulburn region is known as Victoria's 'fruit bowl',

But with water costing around $500 a megalitre, farmers were worried about the area's future.

"This used to be called the fruit bowl. Now it's the dust bowl," Mr Campanelli said.

"I feel sorry for the community around here. All the dairy farmers — they're worse off than me."

This sentiment was shared by other orchardists in the region, with fears the high price of water was here to stay.

Peter Hall, who operates an orchard just outside Shepparton, in north-east Victoria agreed that the current price of water was unsustainable for most Victorian farmers.

"We use somewhere between five and seven megalitres per hectare," he said.

"We have about 300 hectares of orchard, so you do the maths on that, you're going to pay probably an extra $300 to $400 a megalitre on what we consider to be a normal price for 100 per cent allocation," he said.

And it was not just orchardists who were struggling to make ends meet.

Russell Pell was on the Murray-Darling Basin Community Committee for nine years and still works as a dairy farmer in Wyuna, just around the corner from Mr Campanelli's property.

He said dairy farmers were among the worst off.

"The dairy industry is really struggling," Mr Pell said.

"I mean we're down in production. It's been adversely affected by the price of hay and the price of grain as well.

"Certainly the rice industry is suffering, the cotton industry is suffering, croppers are suffering … there are very few crops around when you travel around."

He said the high price of water had also contributed to a downturn in employment.

"It has an effect on employment too because certainly if dairy farmers aren't producing they'll be laying off workers at the factories."

What has caused the price of water to skyrocket?

Mr Pell said two things were to blame for the exorbitant price of water — a shortage of water and zero water allocations for farmers in New South Wales.

"There's a shortage of water … the Commonwealth has about 28 per cent of the Goulburn water and just about right across the southern connected basin it's not too different," he said.

"When you take a quarter of the actual amount of water away and [consider the fact] the seasons are becoming drier … when you add all those things up, it tells you that water's going to be around about $400.

"As soon as you see [zero water allocation] on the general security in New South Wales or even up to 10 or 15 per cent, the price of water is going to be very dear."

Victorian Water Minister Lisa Neville said recent dry conditions had also played a significant role.

"Currently what's happening is a record dry in New South Wales, so New South Wales is in the market purchasing water," she said.

"We last saw the prices at this level in 2008 and 2009 and the market is reflecting really the incredible dry period we've got in New South Wales.

"They've got no additional water available in the system as well as what is predicted to be less allocation and less carryover in our system this year."

Ms Neville agreed that the high prices of water was hurting many Victorian farmers.

"It's why I've had such a strong position that we should not have more water buybacks and why we need to ensure that no further water is taken off our irrigators unless it can be shown it has neutral impact on the economy," she said.

She said the State Government was continuing to monitor the water system and doing its best to ease the financial burden on farmers.

"We're continuing to have a look at who are the farmers most under threat," she said.

"All our water authorities have put in place hardship instalment payments, trying to assist in terms of the fixed water charges.

"We're also looking at the plan to farm investment and working with farmers about their business plan going forward and how we can support them in making decisions."

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