Plaudits for irrigation policy
The Government's decision to become a minority investor in irrigation schemes will ensure those projects get off the ground, say farmers with close ties to irrigation schemes in South Canterbury.
The Government announced last week that it would establish a company to act as a bridging investor for regional water infrastructure development.
The yet-to-be-named company would take minority stakes in water projects with a long-term goal of getting out and leaving the projects to the private sector.
About $80 million of funding would be available for the first year for the company.
The Crown-owned company would remove the uncertainty farmers and the community faced when trying to start up an irrigation scheme, Hunter Downs Irrigation Trust chairman Don McFarlane said.
The government contribution would allow irrigation schemes to become commercially viable and give schemes certainty.
The Hunter Downs scheme was now at the commercialisation stage and this latest announcement would give them another option on the table.
"That's why this announcement is very important and timely as it would be able to be taken into account in developing the appropriate commercial framework for the scheme."
It was not a subsidy as the government expected the money to be repaid.
Irrigation schemes would still require huge support and buy-in from the local community and farmers, regardless of any government shareholding, he said.
"This is not long term government support. It's start-up funding. It will be re-paid and is common with any infrastructure investments."
Rangitata South Irrigation chairman Ian Morten said the first stage was the hardest part of getting an irrigation scheme off the ground. That was why this funding was so important.
"It's really hard to start schemes up. It takes a lot of work and you need someone to back you. If there is anything that can help get these schemes off the ground, that must be good."
Waitaki Irrigators Collective policy manager Elizabeth Soal said there were strict criteria around the availability of funding.
"Irrigation projects will have to demonstrate that the project will be self-sufficient in the long term, will deliver benefits to the community and have robust environmental management processes in place."
The collective's chairman Fraser McKenzie said it was too soon to know whether any of the irrigation schemes within the Collective would be seeking co-funding from the Crown-owned company.
IrrigationNZ chairman John Donkers said the Government's announcement would take the pressure off small communities to find the capital to fund irrigation projects.
"For many years farmers have personally carried the cost of water infrastructure, which can run into the millions of dollars, yet which benefit regional economies enormously."
The $80 million injection would get many regional water projects over the line, he said.
However, the funding has not impressed the Green Party.
It was a subsidy for intensive farming that would increase the pollution of New Zealand's rivers, lakes and aquifers, Green Party water spokeswoman Eugenie Sage said.
"More irrigation and more intensive agriculture with increased stocking, and more fertiliser will result in greater water pollution."
- Fairfax Media