Almonds, horticulture, Water

Water entitlements: Big irrigators gamble on good rain

13 June 2018

Peter Hunt, The Weekly Times
13 June 2018

AUSTRALIA’S largest almond and olive operations are embarking on a high-risk strategy, shunning owning water entitlements and instead opting to buy or lease other irrigators’ water each season in the hope prices stay low.

Olam, Select Harvest, goFarm, Boundary Bend Olives and others are minimising the volume of entitlement they hold, due to the poor return on high security water worth $4000 a megalitre or more.

“Our aspiration is to own about 30 per cent of our needs (as entitlement), which is reviewed annually,” Select Harvest managing director Paul Thompson said.

But valuer Sam Paton said the strategy should set off alarm bells among investors, given the prospect of drought driving up water prices.

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