9 The national interest in community irrigation scheme development

In some locations, irrigation can be developed by individual investment. For example, in most cases groundwater extraction is best done by individuals obtaining the necessary water consents and drilling a well within their property boundary to extract water. However, in many locations, for a combination of reasons group development is the only feasible option.  In most cases this reflects the nature of the available water resource and the fact that the ability to access it is beyond the resources of individuals. Most of the easily accessible water for individuals has already been taken up.

Over time individual developments, whether from ground or surface water, can impact negatively on other values and in total can be an inefficient way to supply irrigation compared to community based schemes. The Canterbury Strategic Water Study provides data that shows that conceptually, storage of excess flood flows from major rivers in Canterbury would be preferable to the current situation of a myriad of groundwater and direct takes that are collectively putting pressure on many of the region’s smaller rivers, streams and shallow aquifers.

Market pull can be left to determine the timing of development of individual irrigation opportunities, but the process becomes very much more complicated where collective development is the best option. The need to get everyone involved thinking, acting and committing together to get the scheme built is a very daunting prospect. Only two community schemes have been commissioned in the last 20 years, in part because of these issues. Several sources of market failure have been identified regarding community irrigation scheme development[1], including uncertainty at initial investigation stage, inadequate information on potential benefits and higher than necessary transaction costs. In respect of the national interest, the economic benefits calculated in section 5.3 will not occur without the community schemes proceeding, as individual development possibilities are limited. Therefore the question becomes one of what level and form of public investment is appropriate to ensure these community schemes are built.

Collective development can improve capital and water use efficiencies. Environmental impacts would require careful consideration on a case by case basis, but some of the major concerns about small stream depletion are likely to be reduced by community development instead of individual abstractions.

Development of collective irrigation schemes falters in the area of obtaining collective agreement and commitment from the beneficiaries due to several factors e.g., different individual values, stages of life and risk profiles.

There appears to be a national interest in addressing these failures to facilitate some community irrigation scheme development where the alternative is either no development or a myriad of individual abstractions over time. This is particularly so when it can be shown that such piecemeal development would be inefficient or have a more negative effect on those values that New Zealanders wish to protect in the long term. For example, the collective abstraction and associated energy and stream flow depletion costs from individual groundwater development may be more efficiently served by a community irrigation scheme based on storage of excess flows in rivers under very little abstraction pressure.