Drought catastrophe stalks Australia's food bowl

By Rob Taylor

MOULAMEIN, Australia (Reuters) - A thin winter green carpets Australia's southeast hills and plains, camouflaging the onset of a drought catastrophe in the nation's food bowl.

Sheep and cattle farmer Ian Shippen stands in a dying ankle-high oat crop under a mobile irrigation boom stretching nearly half-a-kilometer, but now useless without water.

"I honestly think we're stuffed," he says grimly.

"It's on a knife edge and if it doesn't rain in the next couple of weeks it's going to be very ugly. People will be walking off the land, going broke."

Shippen's property "Chah Singh" sits in the heart of Australia's Murray-Darling river basin, a vast plain bigger than France and Germany, home to 2 million people and in good times the source of almost half the nation's fruit and cereal crop.

But years of drought, which some blame on global warming, have savagely depleted the huge dams built 60 years ago to hold the snow melt from the Australian alps and push it hundreds of kilometers inland to the parched west for farm irrigation.

The Murray-Darling normally provides 90 percent of Australia's irrigated crops and A$22 billion ($18.1 billion) worth of agricultural exports to Asia and the Middle East.

But with some crops now just 10 days from failure, farmers are to receive no water at all for irrigation through the summer, while others will get a fraction of their regular entitlement to keep alive vital plantings like citrus trees and grapevines.

The massive Hume Weir, which can hold enough water to fill seven Sydney Harbours, is so dry that a lakeside holiday village is now half-a-kilometer from the depleted shore and rods to measure water depth stand on bare rock far from the waters' edge.

"It's grim. The water is not there," says Wendy Craik, the head of the Murray-Darling Basin Commission which oversees storage in the country's longest river and dam system.

DANGEROUS DROUGHT

Australia's Prime Minister John Howard warned of an "unprecedentedly dangerous" drought in April and advised the nation to pray for rain as economists warned the dry would wipe one percent off the A$940 billion economy in 2006-07.

Those prayers were answered briefly in May and June after winter storms lashed the east coast and major cities, bringing localized flooding and seemingly the end of a dry spell which has lasted near a decade in some areas of the country.

But by bringing hope, the rains ironically may have also worsened the drought's impact on battling farmers through the hot months ahead.

"We thought it was just going to keep on raining. When you go into drought people normally just lock up and don't spend, but after that rain everyone just went out and spent money to plant crops and climb out of the hole they were in," says Shippen.