Wednesday, July 6, 2022

Government investment welcomed

An $80 million Government investment in a company it will own to move irrigation projects forward will speed up plans for future schemes, according to IrrigationNZ. Chair John Donkers said the announcement by Ministry for Primary Industries (MPI) Minister, David Carter came much sooner than expected. Farmers had previously carried the costs of irrigation schemes which whole regions had benefitted from “Having a Government-owned company invest in the initial stages takes the pressure off small communities to find that kind of capital up-front,” Donkers said. “This investment signals that the Government understands the significant contribution irrigation makes to the country.”

Water projects in the Hawke’s Bay, Tasman, Canterbury and Otago were likely to be considered this year, with other regions, such as the Wairarapa, likely to benefit down the track.

DairyNZ chair John Luxton said the dairy industry needed to have confidence that the necessary big regional investments will happen for its continued development. The Government’s decision would allow the dairy industry to plan for the long term in a comprehensive and considered manner which would give others the confidence to invest too.

“The Government is investing in national economic growth through infrastructure, as it does on other fronts like transport, in a comprehensive and considered manner which will give others the confidence to invest too.

“Investment in water infrastructure will have regional benefits stretching across generations.”

Fonterra’s managing director, cooperative affairs, Todd Muller, said the announcement was an important step towards boosting agricultural productivity and exports.
“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.”
In December Cabinet indicated that an as-yet-unnamed Crown-owned company would be established with funding for its first year set aside in the 2013 Budget. The Government would act as an enabler for other investors to participate in new water infrastructure development. It saw benefits in well-run schemes, such as increased water storage which takes pressure off lowland streams and aquifers, and believed that playing a bridging role would get the right projects underway.

The new Crown-owned company will assess proposals presented to it against a list of criteria including whether it is technically feasible, able to achieve resource consents, has a wide, would be affordable for potential water users and had the potential to provide returns to investors over the long-term.  

The Government will be a minority investor in each project, generally just for the short term.

Donkers said it would be good the funding is overseen by high-level Crown support, complementing the work programmes IrrigationNZ is already focused on.

The organisation was rolling out a new irrigator operator training course across NZ this year to make sure all irrigators had the skills to irrigate efficiently and sustainably.
“It should reassure the public that we have the systems in place to manage further land intensification.”

Federated Farmers’ president Bruce Wills said the move highlighted the big two opportunities 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,” he said.

“It is really that simple.”

While dams on farms could store small quantities of water the Hawke’s Bay Regional Council’s Ruataniwha Plains Water Storage Project would see a reservoir covering an area of 372ha.

“Farmers will have to pay a water distribution price so this is not a hand out, but a hand up,” he said. “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.”

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