There are no real ideas at the moment on how to fix this problem. 20,000 to 40,000 hectares of vines have to come out of production.

The Government says it is an industry problem not theirs. To do nothing will only make maters worse in a rapidly compounding way.

The price of grapes, especially quality grapes, is unviable and unsustainable.

Bottom feeding wineries are able to get good grapes at very low cost (or $0 in some cases). They are able to sell wine bulk for very low prices.

This is reflected right up through all price points.

Some solutions have been suggested – and all have huge negative connotations.

q Subsidised Vine Pull could work, but the Government would not be interested - so the whole costs would have to be borne by the industry.

q Market forces to weed out “inefficient growers” do not work. Not being able to sell your grapes and being inefficient are not the same thing. Market forces got us into this mess in the first place.

q The best the industry can come up with is to subsidise growers to drop excess grapes on the ground.

The Government may come to the party on this. However the negative image to the industry is huge.

q Turn the Wine Lake into ethanol. Ethanol is not a useful fuel and it would be quite expensive to do – the wine would have to be bought to start with.

However a new approach to this problem of over supply is needed.

This is to turn excess grapes into BioDiesel using algae ponds to convert the biomass of grapes into usable bio diesel and glycerine.

This would also be used to process winery waste.

The process could be done on a local level, eliminating transport costs and providing local employment opportunities.

The process is being used to turn fish waste and other wastes into bio fuels on the Eyre Peninsular.

I would like to thank Stephen Bedford Clark of Fishace Ecological Engineering for his assistance and ideas in the preparation of this report

This would be very attractive to the Federal and State Governments and the Clare and Gilbert Valleys Council - alternative fuels and carbon credits are all flavour of the month.

All levels of Government would most likely agree to help subsidise this process. With spin this could be turned into a big positive for the wine industry.

An example of how this proposal would work:

Assuming 200,000 tonnes of excess grapes. This would be subsidised at $400 a tonne and would cost $80 million.

If the Government(s) paid half, the wine industry would be able to fund the other half by a levy of 20 cents a case of wine for the 200 million cases of wine that are sold.

This would eliminate the over supply of grapes for this year. To put this another way – all grapes would be sold!

Grape pricing would now have a base price of $400 a tonne and not the $0 a tonne at present.

Bulk wines below $2 a litre would dry up, as it would become uneconomical to produce. Wineries would be able to concentrate on higher price points in the market and grape prices would follow.

Obviously this is simplified. It is possible infrastructure costs would be more than recuperated from the 20 million litres of bio fuel produced. The whole of the wine industry could become carbon-neutral

This would act as a circuit breaker to the problems of the industry and could bring back some semblance of balance.

The process is viable for handling winery waste. An interesting by-product is clean water for irrigation. If this could be taken up it would be a win-win situation for everyone.

Stephen Bedford Clark, of Fishace Ecological Engneering, will be able to give a talk on BioFuels from waste See www.fishace.com.au

He is able to give a talk to our growers on Friday, January 29, 2010 in the afternoon. I will give more details on this later on.

Please contact Roy Crabb via rcrabb@capri.net.au for more information.

* Roy Crabb is a grapegrower and wine producer at Stanley Flat, under the Phoenix Estate label.