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Dairy crisis drives up higher G-MW debts

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November 21, 2017

UDV president Adam Jenkins said the organisation would be interested in seeing more clarity around the numbers as the levels of outstanding debts had not been an issue brought up by dairy farmers.

Northern Victorian irrigators have racked up almost $12million in debt to Goulburn-Murray Water as the full impact of the dairy crisis continues to reveal itself.

The figures, revealed in the irrigation authority’s annual report, have largely been attributed to dairy farmers that have struggled to pay their water bills in the wake of the milk price crisis triggered by Murray Goulburn’s payment clawback.

‘‘The dairy commodity price reduction in mid-2016 affected a large number of G-MW’s customers through the year, a large proportion of whom sought payment agreements for their accounts,’’ the annual report read.

The report outlines millions of dollars in debt that is more than four months overdue yet is still considered ‘‘collectable’’.

G-MW currently has a number of hardship procedures in place designed to assist customers in managing their debt that offer irrigators discounts, waived interest provisions and deferment of existing debt to ensure farmers are not at risk of losing their water supply.

UDV president Adam Jenkins said the organisation would be interested in seeing more clarity around the numbers as the levels of outstanding debts had not been an issue brought up by dairy farmers.

‘‘There’s always concern about high fees and water prices but they haven’t raised these ongoing debts and how they’ll pay as an issue,’’ Mr Jenkins said.

‘‘When you consider that during the milk price crisis we had some people on $4/kg of milk solids and they need to get $5.50/kg of milk solids to be doing a reasonable job, they’ve done an extremely good job under those pressures.’’

State Member for Northern Victoria Luke O’Sullivan has used the figures to call for more transparency in the way farmers pay their water bills, telling parliament that the current format is ‘‘not equitable’’.

‘‘The impacts of that clawback are now starting to be felt, particularly by irrigators in terms of paying their water bills right now,’’ Mr O’Sullivan said.

‘‘To compound that, they have had some dry conditions throughout the north which have elevated the price of temporary water, and obviously that makes it more difficult with those higher input costs.

‘‘With dairy farmers paying for hay and grain, and water to irrigate their grass, as well as the higher electricity charges they are facing now, things are starting to get tight for the dairy industry.’’

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