Panel presentation - Murray Taggart
Good afternoon ladies and gentlemen.
I would like to start by discussing the changes irrigation has meant for our business, and then discuss some of the issues that have arisen in developing the Waimakariri irrigation scheme.
Background
I farm 407ha with my family in the Waimakariri district of North Canterbury. 4 years ago we were a dryland sheep property also growing a small area of commodity feed barley. Production was highly variable and often devastated by drought. Farming practices were conservative with low stocking rates and minimal crop inputs. Making conserved feed and then feeding it all out again were major activities on the farming calendar. Even when favourable seasons did come we had neither the stock numbers nor crop types to exploit the rain.
Finally irrigation water arrived in spring 1999. Since then we have diversified significantly, multiplying canola seed (non GE of course) for Canada and radish seed for France and Korea. We've produced pea seed and silver beet seed for Italy, and onions for Japan. Borage for oil extraction is grown for export to Scotland. In addition our yields of traditional crops such as wheat and barley have doubled and we have been able to move into higher value contracts. None of these opportunities were available without irrigation - the seed companies didn't want to know us then.
Sheep remain our main operation. Sure they don't sound as sexy as the high value crops, but make no mistake, sheep production is a high tech industry targeting high value niche markets. With irrigation we can produce lambs to specification, just as required by wealthy markets like Germany, France, Britain and the US. What's more, our lamb production has tripled and is still rising.
It all sounds great, doesn't it? But it could be better. The Waimakariri scheme is susceptible to low river flows combining with the minimum flow limits to stop irrigation abstraction. This combination has stopped irrigation for varying lengths of time in each year of the scheme's operation. The impact in the 2000/2001 season was particularly dramatic, with water cut off for some 21/2 months through the late summer and autumn, a lengthy period of severe drought conditions.
Losing the irrigation water that year cost us a bundle. We had to sell lambs at light weights and lost the opportunity to buy in and finish more lambs. Ewe numbers were down and they went to the ram at lighter weights, impacting on lambing percentages. Some autumn crops did not establish and were a write-off.
The uncertainty surrounding water availability has an ongoing impact for our farming operation. We would prefer to contract for lamb and beef weaner supply, but continue to buy on the spot market in case we lose irrigation water. Our ability to contract for some high value crops is markedly reduced for the same reason. In time I believe the option to intensify into fresh vegetables will be greatly restricted unless we can guarantee access to irrigation water.
Irrigation Development Issues
108 years after irrigation was first proposed in our district, water flowed in the Waimakariri irrigation scheme. The initial scheme capacity of 11,000 ha has subsequently been increased in 2 stages to 17,000 ha. Working through the Waimakariri irrigation scheme development and looking at the wider irrigation picture, several issues stand out:
1. The benefits from irrigation are huge, so why is so much of the potentially irrigable area of New Zealand still dryland? Even in our district, only 17,000ha out of a potential 50,000ha has been irrigated.
If you have access to water, irrigation in Canterbury is an excellent investment. Irrigated land attracts a premium, communities prosper, and the nation prospers. Against this background you would expect the corporates and the entrepreneurs would be falling over themselves to get involved in supplying water. But they're not! Those same individuals and companies that will happily invest in extreme risk technology whether in the computer industry, drilling for oil, or in biotechnology shy away from what should be a low risk investment - water supply.
Clearly irrigation supply development is seen as being at the extreme end of the risk scale. So where is the risk? The engineering knowledge has been around for years - no risk there. There is plenty of water and a ready market for it - no risk there. Capital is readily available from the equity markets. The only area of significant risk is in negotiating the Resource Management Act. How much is it going to cost? How long is it going to take? Will they get the answer right at the end?
The RMA risk is so great that only those who have a long-term perspective will contemplate negotiating its minefields in pursuit of irrigation. They are the farmers, but they can't manage it without the support of their local Council.
It has always astounded me that Councils fight to retain the right to deliver water to houses and once it's been used, to take it away again. Yet farmers have to plead and beg Councils to pursue irrigation development.
2. Delays in gaining resource consents are costly. Total time elapsed from application to granting of the resource consents for the scheme has been 46 months. In addition, nearly 3 years was lost on consultation required by the RMA prior to the initial application being lodged. While the irrigation company approached this consultation as a genuine attempt to obtain consensus amongst interested parties, most of those parties used the exercise as a delaying opportunity while they attempted to drum up opposition to the scheme. Their goal was simple; stop the scheme at all costs! The consultation was a fruitless exercise with no obvious benefit.
The delay arising from the consent process amounted to more than 6 years. Research has shown that the economic benefit to the district from the scheme amounts to some $40 million pa. Nationally the benefit has conservatively been calculated at $120 million pa. Effectively the 6 year delay has cost this country more than 3/4 billion dollars. The question is; did NZ receive a 3/4 billion dollar benefit from the exercise?
3. Negotiating the RMA is costly. The cost of obtaining resource consents for the Waimakariri irrigation scheme was more than $850,000, or roughly 10% of the total cost of the scheme. This is a huge expense for a relatively small business. On top of this a further $930,000 has been spent meeting environmental requirements demanded by the consents. Effectively more than 20% of the scheme cost can be attributed to the RMA.
4. Water is not short. Enough water flowed down the Waimakariri on one day last spring to operate our scheme for the entire season. Why is water storage not being pursued with more vigour when all the major Canterbury irrigation schemes have been shut down for lengthy periods by low river flows? We have employed consultants to investigate storage options for our scheme. The most cost effective and reliable storage options were rejected thanks to a factor they called "consentability". These were the in-stream storage options or dams as they used to be called. To compound the problem we have the Canterbury Regional Council proposing a management plan for the Waimakariri that prohibits dams above the gorge bridge, when above the bridge is the most logical place to site them.
Sure, there is no technical reason why we can't dig a hole big enough meet the scheme's storage needs. However the cost of buying the land, digging the hole, pumping the water in (and then pumping it back out again) is beyond the resources of the irrigators alone. While the wider community would benefit from such a facility recreationally and economically, there is no sign of any enthusiasm by our local Council to make a significant contribution.
The net effect is that there is no likelihood of water storage for our scheme in the foreseeable future. Hopefully we won't have to wait another 108 years for water storage to be developed.
Irrigation is susceptible to old age. An ageing farming population is an impediment to irrigation development as often the time horizon for irrigation benefits to be realised is beyond the farming time horizon of the farmer. Retirement goals do not often coincide with the need for an increased workload and higher debt that comes with irrigation.
Despite the benefits of irrigation and/or water storage being available for generations to come the decision to proceed is made by the current generation of landowners, based on their individual circumstance. This vulnerability to the aspirations of the current landowners can be mitigated by a more proactive approach by the wider community through local and central government. Generally though, efforts to date have amounted to little more than the proverbial "toe in the water".
Conclusion
- There are vast areas of New Zealand screaming out for irrigation.
- Water is plentiful, but often not in the right place at the right time.
- The RMA, as currently operated and interpreted, is very effective at stalling irrigation development.
- Without community support or more business friendly bureaucracy, water storage is likely to remain a nice idea.
Thank you
Murray Taggart
Contact for Enquiries
MAF Information Services
Pastoral House
25 The Terrace
PO Box 2526
Wellington, NEW ZEALAND
Fax: +64 4 894 0721
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