SunRice Cutbacks Spark Fears of Job Losses and Economic Devastation in Southern NSW

Communities in southern NSW fear cutbacks to rice processing could put hundreds of people out of work and decimate regional economies.

SunRice has announced it will scale back its Riverina milling operations in response to a sustained reduction in local rice supply due to drought and water buybacks.

SunRice typically employs up to 650 people across the region.

In a statement, CEO Paul Serra said the company had started consultation with employees.

"As always, we are committed to engaging openly, constructively and transparently with our people throughout the consultation process.

"We continue to advocate to government on the adverse impacts of water policy settings."

'Concerning' news

In a statement, the Albanese government acknowledged the SunRice announcement was "concerning for [SunRice] workers, their families and impacted communities".

"We urge SunRice to explore all options possible to reduce those impacts in close partnership with its workforce," the statement said.

"The government is taking a balanced approach to water recovery that includes infrastructure investment, voluntary water purchases and community adjustment assistance.

"You can't have sustainable communities without a sustainable environment. A healthy Basin is crucial for all communities along the river system."

The company will move from 24-7 production at Leeton to 16-hour shifts, five days a week.

Processing at its Deniliquin mill will still be done over five days each week, but hours will be cut from 24 to eight a day.

In a statement, United Workers Union director of food and beverage, Mel Gatfield, said the decision would have significant consequences for workers and their families.

"Many employees have dedicated years of service to the company and are now facing significant uncertainty about their future, including the prospect of having to relocate to secure suitable employment," she said.

GM blames 'relentless' buybacks

Leeton Shire Council general manager Jackie Kruger said the cuts were a direct result of government purchasing water from irrigators to meet targets in the Murray-Darling Basin Plan.

"The relentless pursuit of water buybacks had to catch up at some point," she said.

A 2024 ABARES report foreshadowed that rice would be the crop most impacted by continued voluntary water purchases.

Ricegrowers Association of Australia president Peter Hermann said the warnings had gone unheeded by the federal government and communities would suffer.

"Our sense is that there's some people … only interested in political consequences," he said.

"They're not so worried about land, water and communities and even jobs."

Edward River Mayor Ashley Hall said the cuts would impact the regional economy.

"It's just not the workers out there but the auxiliary businesses, the trucking industry, the mechanics, the auto electricians, the wives, the families, the kids who go to school," he said.

"As much as they do the modelling around what the environmental benefits of the water buybacks are going to give, the collateral damage is these towns that are going to be decimated."

Rice is an annual crop with production closely tied to water availability.

Production last summer was about 180,000 tonnes, the smallest crop since the 2019-2020 drought, which also resulted in job losses at SunRice mills.

The coming season is likely to be affected by the ongoing drought and zero water allocations for general security irrigators in the Murray and Murrumbidgee valleys, which includes most rice growers.

The federal member for Farrer, One Nation's David Farley, said water surplus to environmental needs should be made available for rice growing.

"I believe there would be enough [water] that would underwrite the production capacity and secure the jobs for the rice millers and the cotton ginners as well," he said.