Water let’s bank it
Released 16 Feb 2010
Speech to the Fresh Water Management Forum by Lachlan McKenzie, Federated Farmers associate spokesperson for water, Duxton Hotel, Wellington
Today I stand before you - some of our nation's top business leaders - to put forward the farmers' case for more water storage.
In particular, I wish to extol the economic, social and environmental benefits of storing water in a country that is drought-prone but has more than its fair share of water.
The problem you see is that we have an abundance of water in comparison to other country's, including Australia.
And although the rain doesn't always fall in the right place at the right time, water storage would ensure steady, reliable supply.
So what better place than the Fresh Water Management Forum to dive head first into a discussion about the country's key economic driver - a driver which could future proof agriculture and our entire economy.
After all, if the rain stops falling in parts of the country, it certainly pays to have some water stored away for those inevitable dry periods.
And just this month, the Prime Minister made strong statements in support of water storage and irrigation.
I am pleased that after years of intense lobbying, the Government has finally taken notice of the important role of rural water infrastructure in growing our economy, catching up with Australia, improving the living standards of all New Zealanders.
Context
New Zealand has an increasing population that is competing for the use of resources such as land and water.
It is a population that is generally interested in environmental issues associated with the use of resources - particularly when it comes to water.
What's more, they demand access to the recreational opportunities associated with land and water - and, I say, fair enough.
But what everyone needs to realise is that, running parallel to this, is the substantial overseas demand for New Zealand's agricultural and horticultural produce.
Water storage is a key ingredient in the wise and effective use of New Zealand's water resources, but it's also a key ingredient in meeting the demands of our global consumers.
It is important to remember that water can sustain a high level of primary production while also providing a community's water supply, electricity generation and positive environmental outcomes.
Economic Benefits of Water Storage
The development of water storage has significant economic, community and environmental benefits that have been clearly demonstrated by the Opuha Dam.
In particular, the flow-on irrigation developments in South Canterbury have been an all round success.
Irrigation from the Opuha Dam was estimated to have increased farm output by $124 million per year and to have created 480 full-time jobs in the local community.
Reliable irrigation enables a two to three-fold increase in gross farm income (over dryland farming), by enabling greater productivity from existing farming systems.
The economic benefits of irrigation to both individual farmers and the wider rural community are substantial and can be achieved along with environmental outcomes.
Environmental Benefits
There is no doubt that water storage projects will have an impact on the environment, both directly and indirectly.
But, with careful design, planning and management, these impacts can be successfully remedied or mitigated with favourable environmental outcomes can be achieved.
For example, in the case of Central Plains, all water-users will be required to adopt good management practices.
A monitoring and reporting system will be used to measure the environmental performance of individual farms as well as the scheme as a whole.
And the establishment of environment funds will be used to support and encourage various environmental enhancement measures, such as riparian plantings and wetland restoration.
In addition to this, the primary sector is investing heavily in science, research and technology around the impacts of land use intensification.
Practical on-farm research, such as that which occurs at the Lincoln University Dairy Unit, has clearly shown that desired environmental outcomes can be achieved.
We also proactively collaborate with other stakeholders, including both government and non-government organisations and the community, through avenues such as the Primary Sector Water Partnership and the Land and Water Forum.
Potential for water storage development
There is great potential to increase the area of land under irrigation in New Zealand.
In Canterbury, for example, it is estimated that approximately one million hectares of land could be irrigated. Yet, currently, just 640,000 hectares have consent to irrigate.
Without the development of significant water storage, however, irrigation development in Canterbury is expected to fall well short of that potential area.
Much of those 640,000 hectares currently consented are in fact not even irrigated at the moment. That's the case for a variety of reasons including inadequate reliability of the consented water takes.
It is estimated that new water storage projects, currently under consideration in Canterbury, Otago, Hawke's Bay, Wairarapa and Marlborough/Nelson would, if developed, increase the area of irrigated land in New Zealand by over 400,000 hectares.
This is 25 times the area of the Opuha scheme. It is reasonable to believe that similar benefits associated with the Opuha scheme would flow from water storage projects elsewhere in New Zealand.
Financial constraints
A major constraint on the development of large water storage projects is the initial funding of these projects and the preservation of inter-generational equity.
These projects provide very good financial returns in the medium and long term, as demonstrated by the economic study on the Opuha Dam, but the initial capital cost is generally too great to be borne by one generation of farmers.
Given the large and very clear social and economic benefits, there is a compelling case for a private-public partnership approach to funding water infrastructure projects. This would ensure that they proceed in a way that delivers maximum benefit to New Zealanders.
Regulatory framework
New Zealanders are becoming increasingly aware of potential environmental effects associated with the increased use of water resources and the development of rural water infrastructure.
Because of these environmental concerns, water use is becoming increasingly constrained by regulation.
I welcome the Government's recent commitment ensuring that water storage and irrigation projects that meet environmental standards - and are good economic propositions - can happen in a decent timeframe.
Yet we need to ensure that any regulation reflects an appropriate balance between social and economic benefits and environmental values.
We must also ensure the rigid application of protection to one area does not result in disproportionate adverse effects in another.
Conclusion
Water infrastructure, including storage, is the only way to tap the productive potential of land while ensuring environmentally favourable outcomes.
Water storage projects will allow more land to be irrigated more reliably, effectively and efficiently.
It also allows water to be managed for multiple purposes in order to achieve environmental, community and economic objectives.
The flow-on economic, social and environmental benefits from water storage projects are huge, as demonstrated by the economic study on the Opuha Dam in South Canterbury.
A major constraint on the development of large scale water infrastructure/storage projects is the large initial capital costs that are generally too great to be borne by one generation of farmers.
To preserve inter-generational equity, private-public partnerships are needed to ensure that these projects proceed in a way that maximises the benefits for all New Zealanders.
Water storage is a key ingredient in the wise and effective use of New Zealand's water resources. Then water can be used to sustain a high level of primary production, along with other uses such as community water supply and electricity generation, while achieving good environmental outcomes.
For further information contact:
Lachlan McKenzie, Federated Farmers Dairy chairperson, 021 382 442
