Power price shock a gut-punch for growers

Power price shock a gut-punch for growers

Just when you thought things couldn’t possibly get any more expensive, the Queensland Competition Authority (QCA) has decided we’re not paying enough for electricity. 

That’s right - despite the country being in the grip of a cost-of-living crisis as inflation skyrockets, the QCA has decided to usher in a massive spike in power prices across regional Queensland from 1 July.
Sky-high electricity prices were already a huge burden on households and small businesses, including farms, but now, thanks to the QCA’s recently released electricity price determination, we’re about to be slugged for an extra 30 per cent on our power bills.

While the State Government pledged to cover much of the cost increase for households in its recent Budget, there was no cost relief for small businesses or farms.

This is of particular concern for farmers who rely on irrigation to grow their crops, be it fruit, vegetables, or sugarcane.

Irrigation is already an expensive exercise for growers, who pay not only for the water they use to provide the community with food and fibre, but also for the equipment and the power to pump that water.

Electricity bills for some irrigators can be as high as $50,000 a quarter. This price hike will add tens of thousands of dollars to growers’ electricity bills per year. 

Of course, most farmers can’t simply absorb these additional costs. They will eventually flow through to consumers as higher prices at the supermarket, increasing overall cost-of-living pressures.

This isn’t the case for sugarcane growers, however. With the majority of Queensland’s sugar exported, and growers at the mercy of a volatile world market, there is nowhere for cane growers to pass on the additional cost burden.

And with zero competition in the regional energy market, Ergon has little incentive to limit cost increases to farmers and will undoubtedly impose the QCA’s recommended increase in full.

Cane growers have no choice but to suck it up and wear the costs of what is essentially a tax imposed by the State Government.

This is unfair and CANEGROWERS is calling on the government and Ergon to implement special irrigation tariffs for the farmers who feed Australia and keep our regional economies ticking over.

With an El Nino weather pattern now confirmed, and below average rainfall forecast in the months ahead, growers are likely to be irrigating more, and that means using more electricity. 

They will also almost certainly face increased costs for that irrigation water.

Australian farmers are at risk of paying more for electricity than any one of our subsidised global competitors. 

While farmers are investing in off-grid technology like solar and diesel, and in energy and water efficiency programs, the government-controlled generation and market conditions continue to fail us. This must stop.