WATER has become liquid gold for those livestock producers reliant on SA Water supplies.
Prices have quadrupled in the past six years, leaving many producers in the Mid North, Eyre Peninsula and Upper South East without access to good quality underground water or dams - and dependent on mains - forced to make decisions on their future in the industry.
An inquiry into drinking water and sewerage retail pricing was referred to the Essential Services Commission of SA by the Treasurer in September, 2012.
The draft report was released in July. There are hopes that reductions may be possible with the report suggesting introduction of a cost-reflective usage charge.
Rural consumers believe the present pricing system bears no relationship to the real cost of supplying water.
ESCOSA has suggested the charge may be as low as 62 cents a kilolitre - significantly better than existing prices up to $3.23/kL.
It has received 34 public submissions from across the state to the draft report, including from Primary Producers SA, Livestock SA, the Coorong District Council, Lower Eyre Peninsula Council and a number of landholders. All have all urged state government to re-think water prices.
Livestock SA president Richard Halliday says the organisation has identified reducing the cost of livestock water as one of its top 10 priorities.
It would like to see a differentiation between water used from SA Water for livestock consumption and that for domestic usage, and a cheaper rate for livestock in recognition of the sector's production value and contribution to the state's economy.
"If the price of water is not reduced to a more realistic level, not only will this lead to reduced livestock numbers, but it will start to mean that less efficient management procedures will occur," Mr Halliday said.
"In times of drought, producers started keeping animals in drought lots as part of effective natural resource management on their properties, but as water prices increase this will not be a feasible measure."
Mr Halliday says Livestock SA supports ESCOSA's first recommendation: to enhance economic efficiency, a single usage charge, based on the long-run marginal cost of water supply, should be adopted.
This has been calculated by the commission for Greater Adelaide at 62c/kL.
Livestock SA is hopeful reticulated water to regional areas of the state would be similar.
"If the price for water was set at 62c/kL, Livestock SA believes there could be an increase in livestock production and hence an increase in water usage," Mr Halliday said.
"If water prices continued to be artificially increased there will be a need for an adjustment package for those producers who rely on SA Water."
* Full report in Stock Journal, October 2, 2014 issue.