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Duncan MacLeod (centre), Hawkes Bay Regional Council at a field day.
Central Hawkes Bay has good potential for dairy with irrigation, says Duncan MacLeod, commercial manager, Hawkes Bay Regional Investment Company.
The Hawkes Bay Regional Council-controlled company is managing the Ruataniwha water storage scheme through the consent phase.
“A few farms in Central Hawkes Bay are the largest of any in New Zealand so there’s opportunity for some scale,” MacLeod told Dairy News. “There’s plenty of access to grazing land for young stockand it has good potential as a dairying area. It just needs reliable irrigation; it is a dryland environment.”
Land values in Central Hawkes Bay for flat land with some infrastructure are about $20,000/ha. “That’s a pretty good buy – good flat land in not too remote a location, and as long as the scheme comes about there will be a reliable source of irrigation water.”
MacLeod does not think many existing land owners will convert to dairy, so initially any dairy expansion from the irrigation scheme will be by those already dairying. “Where dairy might play a bigger part is as the scheme comes online and water is available; then it will be an opportunity for conversion by new owners.”
More people interested in irrigated farm systems will come into the community as properties are sold. That will be a mix of dairy and arable type farming systems, he says.
MacLeod says the expectation of those who would sign up for water use under the Ruataniwha scheme was about one third dairy, one third sheep and beef and one third cropping. “So far we’re staying pretty true to that, so over one third of the water has gone to dairy and dairy support,” he says.
This year’s payout is no doubt having some impact on farmers’ outlook, he says. But it is just another glitch in the commodity cycle and most people would expect a better medium-to-long term outlook.
For the scheme to go ahead, 40 million m3 water of the total storage of 96m m3 needs to be signed up to a contract. The company already has 20m m3 signed up. They have another 14m m3 in contracts out with farmers but not yet returned.
“Of the people who have said they will take water, we’ve got 34 out of 40, a pretty high result. But of the 34, in total only 20 have signed and sent it back.”
They have contacted 414 farming properties; some farmers own more than one of those. “In some cases, where people have two farms they are looking to irrigate one of them, certainly in the first instance.”
He is not surprised a reporter can find six farmers who say they can make the numbers work. “Out of 414 you would expect to find a certain percentage who won’t be looking to take water from the scheme. We need about 140 farmers signed up to reach the 40m m3 and currently we have 104. We are looking pretty good I would have thought.”
He points out there is no requirement for farmers to invest capital in the scheme, though people can invest if they want to or have an “arms length” contract.
Strict limits have been imposed on N leaching in the catchment area. But while farming within limits was a “bit scary for everyone”, plan changes would affect the region whether they had a water storage scheme or not, he says. However farmers wanted to have certainty about the limits so they could see how it affected their businesses.
The deadline for any appeals to the N limit was last Friday (July 17). If there were no appeals the investment company would hope to have full financial details on the scheme finalised about November.
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