Australia Could Feed 50 Million With Rice, so Why Is Its Largest Producer Struggling?

As the federal government weighs up a $15 million assistance package to Australia’s largest rice producer SunRice, concerns remain about the sustainability of the industry amid troubled water rights.

The company has scaled back production hours, with 78 redundancies across its Riverina operations in regional New South Wales.

Labor is reportedly considering a $15 million taxpayer-backed package to bolster operations at SunRice’s Leeton mill, a processing site for rice cakes, following lower than usual output due to a lack of rice.

SunRice will match the funding with a $15 million contribution of its own.

“I can confirm that we have advised SunRice that we are prepared to co-invest with them in new investment in a rice processing plant,” Water Minister Murray Watt told ABC on Aug. 24.

“SunRice has indicated that investment, as well as their own, would protect their jobs as well as potentially creating more.”

The Epoch Times contacted his office for additional comment.

Prime Minister Anthony Albanese said he was working with SunRice.

“I was water shadow 20 odd years ago. So, I’m conscious of the work that farmers do and we want to work with them.”

The Epoch Times understands Watt has invited SunRice to submit a formal proposal for upgrading the Leeton processing facility, and funding for any future value-adding capabilities. It is unlikely the any redundancies will be stopped.

Water Issues a Key Concern

The rice company’s predicament has reignited debate around Australia’s water allocation policy and its impact on farmers, particularly the Murray-Darling Basin plan.

“We have been highlighting the need for water policy reform that balances socio-economic and environmental outcomes, and greater regional manufacturing support in the Riverina, for several years,” a SunRice spokesperson told The Epoch Times.  

“To truly ensure a viable Australian rice industry, we need a multi-faceted plan that supports more balanced water allocations and value-added manufacturing to help promote skilled regional jobs.”

The Ricegrowers’ Association of Australia (RGA) warns that while country has the potential to produce enough rice to feed 50 million people a year, but warned about policy failings.

“When it comes to rice, in a good year we can produce enough domestically to feed 50 million people worldwide. But if we get the policy settings wrong, that Australian rice disappears from the supermarket shelves very quickly,” said RGA Executive Director Perin Davey, a former senator, in a statement.

“You can’t ask Australian farmers to maintain high productivity while simultaneously making long-term decisions that reduce their access to the water they need to produce it.”

The conservative-leaning One Nation’s Barnaby Joyce was critical of how water was allocated.

“Well, let’s make it very clear that SunRice didn’t have a problem before we had this sort of ‘jihad’ about collecting more water and putting it in the Commonwealth Environmental Water Holder, and then holding it there not quite sure what we’d do with it,” Joyce told News Corp’s 2026 Bush Summit in Dubbo.

“There’d never been a proper order on exactly (what) the biggest water licence in Australia, which is the Commonwealth Government, does with that water.”

David Farley, who’s electorate of Farrer sits within the Murray Darling Basin, said the Basin Plan was too restrictive.

“There’s plenty of water available at the moment as the rivers have been flooding,” he told ABC News Breakfast.

“It’s just the rules of the Murray Darling Basin program restricting it, which seems to be nonsense.”

Pros and Cons of Government Bailouts

Graham Young, executive director of the Australian Institute of Progress, commented on the prospective $15 million grant, saying that while they were sometimes necessary, businesses still needed to be resilient.

“The money is not, as far as I can tell, an ‘investment.’ It is actually a grant, and is meant as compensation for the government taking water in the Murray Darling Basin from industry and giving it to the environment,” he told The Epoch Times.

“Murray Watt, the environment minister, is responsible as a result.”

In recent months, the Australian government has also spent billions trying to save domestic manufacturers and producers from a flood of cheap overseas goods and material.

This includes $2 billion to rescue the Boyne Aluminium Smelter, $600 million to Glencore’s Mount Isa Copper Smelter and Townsville Refinery, $2.4 billion to the Whyalla Steelworks, $135 million to the lead and zync Nyrstar Smelters, and most recently, $2.5 billion for the Tomago Aluminium refinery.

“Government has deliberately made a resource scarce—electricity [lack of support for coal-fired power] in the case of the smelters, and water here—and created problems for local industries,” Young warned.

“Instead of expecting the industries to adjust, which is what would happen in a normal market economy, they effectively bribe them to keep going rather than admit that they have made the business uneconomic.”

Young also questioned why a bail-out was necessary given the size of SunRice, which exports globally.

“SunRice has equity of $657.8 million earning about $73 million after tax, with substantial borrowing capacity,” Young said.

“It increased its dividend to 70 cents this year—a record. If investing the $30 million made sense, they could do it without government assistance.

“And it doesn’t really solve the underlying problem because eventually the government’s money will run out and the water still won’t be there,” he said.