Case Study: Last Crop for Vegie Grower

By Ashley Gardner

Thousands of vegetable plants are being dumped as Weribee’s water supply dries up.

Lettuce and cauliflower seedlings worth millions of dollars are being tossed with growers failing to secure water supplies.

Fresh produce prices were expected to begin creeping up as production in Werribee in wound back.

Southern Rural Water has offered the growers cheap irrigation water within weeks if they agree to use recycled water in future years.

At a crisis meeting on Wednesday night, water chiefs set a 16-hour deadline for growers to take treated sewage, bringing forward the initial cut-off by a week.

Department of Human Service public health official Paul Van Buynder told growers ‘class A’ recycled water was safe for vegetables. But growers were concerned consumers would not accept vegetable grown with treated sewage.

At that meeting was Harry Velisha, who has thrown out 200.000 seedlings because he does not know if he will have the water to grow them.

Rate Payers of Werribee South president Nik Tsardakis said grower without water would not be able to sell their land.

With no water and no development, the land was useless, he said. The water crisis began when the growers were banned from using ground water amid concerns that supply was running out.

Southern Rural Water will sell the growers water from the Thomson Dam for $126.50 a megalitre if they agree to use recycled water in the future.

Without that undertaking, growers will be charged 10 times that for the same water.

The Herald Sun

12 December 2003

Questions

1.      Use a supply and demand model to explain why growers did not want to use treated sewage water to grow their vegetables.

2.      Using your model from question 1, explain why ‘fresh produce prices were expected to begin creeping up.’

3.      The price of water to growers was going to increase tenfold if they did not use recycled water. What effect would this increase in water costs have on the market for vegetables in the short term and long term?

4.      In the article, Nik Tsardakis was quoted as saying, ‘With no water and no development, the land was useless.’ This is possibly an overstatement, but the value of the land would certainly fall. Explain why.

5.      What happened to the opportunity cost of land for the vegetable growers when they were banned from using ground water?

6.      The growers originally used ground water for their plants but its supply was running out. Explain why it was highly likely that growers were going to over-use the available supply of ground water. Is a complete ban on using ground water likely to be the best solution? Can you think of a better solution?

Case Study: Last Crop for Vegie Grower