Riverina Braces for Economic Blow as SunRice Scales Back Operations, Hundreds of Jobs at Risk

Communities across southern New South Wales are grappling with the looming threat of significant job losses and widespread economic disruption following a major rice processor's decision to scale back its Riverina milling operations. The move by SunRice, a cornerstone of the regional economy, could see hundreds of people out of work and has sparked deep concern among residents, local businesses, and political leaders.

SunRice, which typically employs up to 650 individuals across the region, announced the cutbacks in response to a sustained reduction in local rice supply. This decline is attributed to a confluence of factors, including prolonged drought conditions and ongoing water buybacks under government policy. The company has initiated a consultation process with its employees regarding the changes.

Operational Shifts and Job Uncertainty

Paul Serra, CEO of SunRice, confirmed the start of consultations, stating the company's primary focus is on retaining as many employees as possible. "Our focus is on retaining as many employees as possible, including exploring redeployment opportunities where feasible," Serra said, adding that the company is committed to engaging openly, constructively, and transparently throughout the process. He also highlighted SunRice's ongoing advocacy to the government regarding the adverse impacts of current water policy settings.

The operational changes will see the Leeton Mill shift from its current 24/7 production model to 16-hour shifts, five days a week. Meanwhile, the Deniliquin mill will maintain a five-day processing schedule, but daily operating hours will be dramatically reduced from 24 to eight.

The United Workers Union has voiced strong concerns over the announcement. Mel Gatfield, director of food and beverage, warned of 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," Gatfield stated. She underscored that the proposal jeopardizes secure jobs in communities that are ill-equipped to absorb such losses.

Water Policy Under Fire

Local leaders have been quick to link the production cuts directly to government water purchasing policies. Jackie Kruger, General Manager of Leeton Shire Council, asserted that the "relentless pursuit of water buybacks had to catch up at some point." Kruger explained that these buybacks artificially inflate water prices in the temporary market, thereby making annual crops like rice less economically viable for growers.

These concerns echo a 2024 ABARES report, which had already foreshadowed that rice would be the crop most significantly impacted by continued voluntary water purchases. Peter Hermann, President of the Ricegrowers Association of Australia, lamented that warnings from the industry had gone unheeded by the federal government, predicting severe suffering for communities. "Our sense is that there's some people… only interested in political consequences," Hermann remarked, suggesting a disregard for land, water, communities, and jobs.

Edward River Mayor Ashley Hall painted a grim picture of the ripple effect on the regional economy, emphasizing that the impact extends far beyond the mill workers themselves. "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," Hall explained. He added that while environmental benefits of water buybacks are modelled, the "collateral damage is these towns that are going to be decimated."

Government Response and Future Outlook

In response to the announcement, the federal government acknowledged the "concerning" nature of the news for SunRice workers, their families, and affected communities. A government statement urged SunRice to explore all possible options to mitigate the impacts in close partnership with its workforce. The statement also highlighted the government's balanced approach to water recovery, which includes infrastructure investment, voluntary water purchases, and community adjustment assistance, while reiterating the importance of a healthy Murray-Darling Basin for sustainable communities.

The federal member for Farrer, David Farley, has called for water surplus to environmental needs to be made available for rice growing, arguing it could underwrite production capacity and secure jobs for rice millers and cotton ginners.

The outlook for the rice industry remains challenging. Rice, an annual crop, sees its production closely tied to water availability. Last summer's production of approximately 180,000 tonnes marked the smallest crop since the severe 2019-2020 drought, which also led to job losses at SunRice mills. The upcoming season is expected to be further impacted by the ongoing drought, coupled with zero water allocations for general security irrigators in the Murray and Murrumbidgee valleys, where the majority of rice growers operate.