Farmers feel power pain

October 31, 2017

Mooroopna farmer Michael Gaffy said farmers will be forced to make cuts to pay for climbing electricity bills.

Goulburn Valley producers are being stung by skyrocketing power prices as many attempt to renegotiate their power contracts, with some rates more than tripling.

Mooroopna farmer Michael Gaffy, who maintains a 141ha farm producing lucerne, hay and rye-grass, has seen his new contracted rates increased by more than 300 per cent, adding tens of thousands of dollars to his yearly power bill.

He said the lack of available power and high prices had left everyone concerned, and more needed to be done.

‘‘When (the government) are getting to the stage of saying ‘look, we’ll pay you not to use your electricity’, I just don’t know how people can say that’s going to be a good idea. Paying me to not run my bore pumps in the middle of January is not going to entice me not to irrigate,’’ he said.

‘‘It’s just not negotiable ... In reality power is something you have to use and you work to make cuts somewhere else.

‘‘If you’re going to survive you’ve got to be optimistic and hope that something will come up.’’

When asked how he would cope with the rising prices, Mr Gaffy had a simple response.

‘‘I’ll tell you in 12 months.’’

Mr Gaffy’s story is a familiar one for orchardist Peter Hall, who said the peak rate on his new contract offer had increased by 300 per cent, while his off-peak rate had increased by at least 400 per cent.

Facing a potential for blackouts as the summer approached, Mr Hall said it was simply not an option.

‘‘For a farmer like me, we need to maintain our cold storage plant 24 hours a day, seven days a week. Not just to keep the produce fresh but to satisfy our overseas market who wants us to demonstrate that we’ve cold-treated the fruit for them,’’ he said.

‘‘If we turn off the power we miss out on those opportunities.

‘‘It’s a really profound disappointment in the political process on both sides of parliament, both federal and state, that they’ve allowed the situation to decline to a point where there is very little competition and we have the prospect of potential blackouts in peak-time summer periods.’’

The power pain comes on the back of a Dairy Australia report that suggests energy costs are set to rise 50 to 70 per cent in 2017-18, with average increases of $4840 to Australian dairy farmers’ annual shed power bills.

The report suggests that dairy farmers will effectively pay twice for rising power prices as a result of their own power bills and absorbing rising costs of dairy processors.

Dairy processors currently pay a combined $170million each year for electricity and gas, with a hike of $100million expected, equating to about a cent a litre less that companies can pay farmers, an average of $15340 per farm.

UDV president Adam Jenkins said he suspected the situation was worse than the report revealed.

‘‘We are already seeing some farmers with 100 per cent increases from contract to contract, so that is a major concern,’’ he said.

‘‘Our whole supply chain is looking at this issue. We fear that any cost that’s applied in the supply chain will be brought back to the farm gate — which is unacceptable.

‘‘It’s a lack of federal and state policy and our whole supply chain, including our farmers, have been caught up in a lack of policy and foresight.’’

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