INDUSTRY and government have failed Sunraysia fruit growers, says BILL McCLUMPHA
The Weekly Times recently reported on the crisis confronting Sunraysia irrigators as their water security is eroded and their terms of trade go into free-fall.
Much of the focus has been on the graphic fallout from the collapse of the wine industry, and it is timely to look at the facts surrounding the overproduction that caused this collapse.
Fact one is that overproduction was brought about by interventionist government policies at the behest of the industry.
Fact two is growers predicted the oversupply and repeatedly warned the industry and government but were ignored.
Fact three is industry and government have been in long-term denial regarding overproduction.
The term "industry" here includes the supposed growers' representative body the Wine Grape Growers Association, which has evolved away from its roots to become as one with the industry and government bodies with which it deals.
This unity is manifested in the document Wine industry must confront the reality of oversupply, headed by the logos of the ruling industry mafia, the "Gang of Four", comprising the WGGA, the Wine Makers Federation and the two government bodies - the Australian Wine and Brandy Corporation and the Grape and Wine Research and Development Corporation.
In this document, dated November 2009, the "Gang of Four" belatedly acknowledges oversupply and its evils, but where were they policy-wise before then? They backed the interventionist and distortionary tax initiative of accelerated depreciation for new plantings, which ended in 2004 after doing untold damage.
With both sides of politics they backed, and still back, Managed Investment Schemes, which created the 20 per cent industry and are still planting.
WGGA and WFA boast MIS interests among their members.
In 2003 the industry/government commissioned the KPMG report Surrendering the Advantage, which called for massively increased plantings,
The call was backed by Michael de Palma, chairman of Sunraysia grower group the Murray Valley Wine Grape Grower's Association.
And, there was the Australian Winegrape Outlook 2008/2012 by McGrath Kerr.
Commissioned by the WGGA and the Federal Government and released in 2007, this report predicted a supply-demand balance from 2010, green-lighting continued overproduction.
Now industry and government are gearing up to make growers wear the cost of the policy-induced disaster by forcing them to adjust out of production without fair compensation.
Since industry and government ignored the warnings and advice of growers and worked together to bring about the present catastrophe, they should pay, not growers.
- Bill McClumpha is a Sunraysia fruit grower
