Thursday, 24 January 2013 11:49

Irrigation boost gets thumbs up

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A host of high-profile organisations have welcome the announcement of $80 million in funding this year for water storage and irrigation.

The funding means four New Zealand regions may see water storage proposals progress this year – creating new jobs, making farming, viticulture and horticulture more viable, and ensuring more sustainable use of water, says IrrigationNZ.

The announcement of an $80million investment in a Crown-owned company to act as a bridging investor for regional water infrastructure is "well deserved", says IrrigationNZ Chairman John Donkers.

"For many years farmers have personally carried the cost of water infrastructure, which can run into the millions of dollars, yet benefits regional economies enormously," he says.

Water projects in the Hawke's Bay, Tasman, Canterbury and Otago are likely to be considered this year, says Donkers.

"All of these regions have well-developed water storage proposals which have already attracted Government support in the investigation phases, but now need additional capital to proceed," says Donkers. Other regions, including the Wairarapa, are likely to benefit down the track.

An $80million injection will get many regional water projects over the line. The community outcomes are not limited to irrigation development either, as funding will help address water over-allocation which is consistent with the Government's Freshwater National Policy Statement as well as improve community water supplies, says Donkers.

Water New Zealand chief executive, Murray Gibb says New Zealand is extraordinarily water rich, but only captures about 2% of annual water runoff, which is miniscule by international standards.

"Large scale off-farm harvesting, storage and distribution water infrastructure for irrigation comes with a hefty price tag. The funding announced today is likely to be a deal maker, bringing planned schemes to fruition. This has to be good news for the New Zealand economy," Gibb says.

"Close to half a million hectares of dryland farmland in drier eastern parts of New Zealand could be irrigated. Across the globe the rule of thumb for irrigated land is a 300% increase in production over its dryland equivalent. And, more reliable watering means better quality production and a doubling again of the value of output. Having more of that going on in New Zealand is just makes plain common sense."

Federated Farmers is applauding the Government moving to set up a company to act as a bridge investor for regional water storage projects.
"What the Government is doing here should be applauded by environmentalists as much as it will be by farmers," says Bruce Wills, president of Federated Farmers, speaking from his farm in the Hawke's Bay.

"It was over 30C outside and the pasture I was looking at is brown. The last significant rainfall we had here was before Christmas but I am not complaining, this is farming on the East Coast. In saying that it highlights the big two opportunities we have with water storage, the economic and the environmental.

"The best way to keep nutrients and soil on our farms and out of water is green living grass. It is really that simple. Farms like mine have dams but they can only last so long. In winter, when you see our rivers over capacity, you ask why this cannot be stored for use when we hit a dry spell like now.

"Take the Hawke's Bay Regional Council's Ruataniwha Plains Water Storage Project as one example. If it comes off, it will not only be big for the Hawke's Bay but big for New Zealand.

"The resulting reservoir will cover an area of some 372ha; only slightly smaller than Sydney's central business district but around double the size of Wellington's.

"Farmers will have to pay a water distribution price so this is not a hand out, but a hand up. The government will exit to bring in further private sector investment. We only need look to the performance of Fonterra's units on the NZX to see what could be possible.

"It also speaks volumes that the poster project for water storage remains Canterbury's Opuha Dam. This exercise in perseverance took years highlighting why short-term government involvement is needed to deliver economic infrastructure.

"What we know from Opuha is that since it opened there has been numerous environmental and recreational spin-offs, in addition to benefiting farmers of course.

"The Ruataniwha Plains Water Storage Project in my area will lift the area of land influenced by irrigation from 6,000ha to some 42,000ha. Economic analysis indicates farm output in the Hawke's Bay will rise by $160 million each year with farm value add increasing by $70 million. That last amount includes additional household income worth $24 million each year.

"An additional 632 full-time equivalent jobs will be created and we are just talking about one project. These are real green jobs because that is the colour of the grass it will grow.

"This will greatly aid the development of not only pastoral agriculture and horticulture, but value-added manufacturing too. In early 2012, Heinz announced closure of their Australian plants in favour of the Hawke's Bay.

"Politicians from the left and the right agree Canterbury's Opuha Dam works, so why not speed similar projects along? This is what the Government is doing here and it will be as good for jobs as it will the environment," Wills says.

DairyNZ Chairman, John Luxton, says the decision bodes well for the future of dairy farming and its contribution to the economy.

"The dairy industry is committed to sustainable use of water and will be releasing a new Sustainable Dairying Water Accord as well as a wider sustainable farming strategy. But, for continued development of the industry, we need to have confidence that the necessary big regional investments will happen.

"Investment in water infrastructure will have regional benefits stretching across generations. Farmers are already investing millions of dollars in irrigation systems and upgrading them to ensure efficient water use," he says.

Luxton says this kind of government support is necessary because of the scale, complexity and capital requirements of regional scale irrigation and it will ultimately speed up the delivery of these schemes that will bring a range of community and economic benefits.

Fonterra managing director cooperative affairs, Todd Muller, says the investment announcement, coupled with the establishment of a Crown vehicle to co-invest in water schemes, was an important step towards boosting agricultural productivity and exports.

"Water is fundamental to dairying and agricultural productivity. Enabling a mix of public and private funding will give investors the necessary confidence to push ahead with schemes at the regional level.

"We will see benefits flow through in increased production and export earnings and we will also see the environmental benefits which will come from improved water flows.

"This investment will not only benefit the agricultural sector, but the economy as a whole."

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