SunRice production cuts raise concerns over Riverina jobs and water pressures
- jessdempster
- 18 minutes ago
- 3 min read
Concerns are growing across southern New South Wales after major local employer SunRice announced it will scale back operations at its Leeton and Deniliquin mills, with the decision reigniting political debate over water management and the pressures facing regional industries.
At the Leeton Mill, operations will reduce from 24-hour, seven-day production to 16 hours a day, five days a week.
The Deniliquin Mill will continue operating five days a week, but daily production hours will be cut from 24 hours to eight.
SunRice said the changes were driven by a sustained reduction in local rice supply - linked to drought conditions and water availability - with the revised shift structures to affect production schedules at both sites.
In a statement, Sunrice CEO Paul Serra said the company - which typically employs up to 650 people across the region - has begun consultation with affected employees, and hopes to retain as many workers as possible, including through potential redeployment opportunities.
"As always, we are committed to engaging openly, constructively and transparently with our people throughout the consultation process," the statement said.
“We continue to advocate to government on the adverse impacts of water policy settings on the Riverina rice industry, while closely monitoring seasonal conditions and crop outlook.”
The Federal Government described the announcement as concerning for SunRice workers, their families and affected communities, urging the company to explore all possible options to reduce the impacts in consultation with its workforce.
It said it was taking a balanced approach to water recovery in the Murray-Darling Basin through measures including infrastructure investment, voluntary water purchases and community adjustment assistance.
The situation has reignited debate among Riverina representatives who have long taken issue with current water policies, and the impact they have on regional communities and agricultural production.
Federal Member for Farrer David Farley said the announcement showed the impact of water buybacks on irrigators and regional employers, arguing water costs had become too high for producers.
“Water has become prohibitively expensive in the Basin thanks to buybacks, and this is despite the fact that more than enough water has been recovered for environmental flows under the Basin Plan,” Mr Farley said.
“Employers like SunRice can’t maintain their workforces at current levels if they have no crops to process, and this is a direct result of water prices going higher thanks to government buybacks. This isn’t the first time this has happened; in 2019, the company was forced to cut 100 jobs in the Riverina thanks to water reform policies.”
He called for surplus environmental water to be made available to irrigators ahead of the spring planting season, saying businesses such as SunRice needed sufficient rice production to maintain their workforces.
Independent Member for Murray Helen Dalton also blamed state and federal water policies for contributing to the cuts, calling for a Royal Commission into water management.
“The SunRice situation highlights the need to understand how badly water policy has failed us over the last 20 years,” Ms Dalton said.
“SunRice didn’t want to make these cuts to production, but they have no choice.”
“Failed Government water policies have forced their hand.”
The impacts of reduced rice production are expected to extend beyond the mills, with growers, suppliers and local businesses across the Riverina watching the situation closely.
SunRice said it would continue discussions with employees as it worked through the proposed changes.