Speech to Crown Irrigation Investment Ltd & StakeholdersPrimary Industries
It was a great honour to be re-elected for a third term in Government, and to be reappointed as Primary Industries Minister.
Over the last two years as Minister I’ve strongly advocated irrigation and I see the election result as a mandate for our approach.
The need for new irrigation and water storage has been highlighted by severe droughts over the previous two summers.
In fact it is wasteful that we only capture around 2 per cent of rainfall in New Zealand, with the rest roaring out to sea.
Just look at Martinborough; it can be bone dry in the summer and gets 780 mls of rain per year on average - yet the nearby Tararua Ranges receive over 5 metres of rain annually.
I’ve seen for myself what a difference irrigation makes to rural communities, revitalising schools and entire towns, creating jobs for locals.
There is potential for an extra 420,000 hectares of land across New Zealand to be irrigated by 2025, creating thousands of new jobs and boosting exports by $4 billion a year.
Already we have around 720,000 hectares of land under irrigation which at the farm gate contributes around $2.7 billion to our GDP. This helps pay for things like schools, hospitals and roads.
And as we know, the water storage infrastructure associated with irrigation developments often has real environmental benefits, with more consistent river flows in summer and reduced pressure on ground water sources.
Central Plains Water, where I visited today is a good example. 75-80 percent of the current groundwater takes in the scheme area will be replaced by surface and stored water once it is operating in September 2015.
Replacing groundwater with river and stored water will improve water flows into Lake Ellesmere Te Waihora by an estimated 15-20 percent.
This will help the long-term process of improving its water quality and recreational values.
I want to make a couple of important points about the environmental impacts of irrigation that are often overlooked by critics.
The first is that the dairy industry has set strict standards for new dairy farms.
The Sustainable Dairying: Water Accord was signed last year and requires new dairy farms to establish and comply with an agreed set of standards before milk collection starts.
They must have systems in place to manage all sources of effluent and be compliant with regulatory obligations 365 days a year.
Animals must be excluded from waterways and every farm must have a nutrient management plan.
From 31 May next year, all new dairy farm conversions must have a riparian management plan in place before milk collection commences.
It’s also worth stressing that irrigation is not simply about dairy expansion.
Irrigation offers opportunities for a variety of other industries, such as horticulture and small seed production.
Not many people know New Zealand produces 50% of the world’s radish seeds and 30% of the world’s carrot seeds.
Today I visited Agri Optics which provides precision agricultural products and services such as moisture sensors and field mapping technology.
It’s a great example of how innovation is helping use water and other resources better, to be more efficient and more sustainable.
But I don’t need to convince people in this room of the benefits of irrigation. The challenge for all of us – industry and Government – is to communicate this to the wider public.
The term “social license” is becoming increasingly important to our primary industries, which refers to the community’s acceptance of our activities.
We can’t ignore public opinion; we need to engage with the community and tell the full story.
Central Plains Water
So far the Government has allocated $120 million to Crown Irrigation Investments Limited out of a potential $400 million in funding.
The first investment is underway with terms agreed for a $6.5m investment into the Central Plains Water scheme on the Canterbury Plains.
Today I saw for myself the work being done on the headrace for this scheme, which at $409 million will be one of the biggest construction projects ever in Canterbury.
Stage 1 of the CPWL scheme will irrigate 20,000ha, 15,000ha of which is currently irrigated from deep groundwater.
Water will be sourced from the Rakaia and Waimakariri Rivers, and from storage in Lake Coleridge.
The concept of the Central Plains Water Scheme dates to the early 1900s, and farmers actively began promoting the scheme in the late 1990s.
When fully completed the scheme will irrigate about 60,000ha in the central Canterbury area.
It’s estimated there will be additional economic activity of between $1-1.4 billion created, an export boost of at least $300 million per year, and around 1,100 new fulltime equivalent jobs.
The construction phase so far has created over 200 jobs and been a real boost to the local economy.
A recent study by Lincoln University shows that 10% of Christchurch’s total gross economic output comes from direct expenditure on farms in Selwyn and neighbouring Waimakariri District.
Over the next three years I’m looking forward to seeing more investments like this announced and progressing.
Crown Irrigation has a clear mandate and the funding to invest in irrigation schemes that will deliver economic benefits to New Zealand.
The company’s aim is to be a bridging investor. This means kick starting projects that wouldn’t otherwise happen.
All the investment decisions are made by a highly qualified, independent board. Crown Irrigation has an important role to play, not just as an investor but also in providing advice and expertise through the development stages.
We know the average age of a farmer is around 58 and this can affect investment decisions.
We also know the potential of irrigation can only be achieved if development proposals are technically, environmentally, socially and commercially viable. These are complex proposals that take time, expertise and dedication.
The Irrigation Acceleration Fund, (IAF) and the Community Irrigation Fund before it, have an important role in getting proposals to the investment-ready stage.
The IAF is currently supporting proposals that involve a potential for a further 260,000 ha of newly irrigated area.
It’s not just new developments either – many existing irrigation projects are upgrading, expanding and becoming more efficient.
There are also a number of smaller development projects in the very early stages of investigation and development.
Not all of these will turn out to be viable, because the IAF sets high standards. Whether proposals proceed depends on proving demand from irrigators and other users to support the financing required.
The current IAF appropriation is almost fully committed, with $27.75 m allocated to 15 projects throughout the country, predominantly in Canterbury but also in Hawke’s Bay, Otago, Wairarapa, and Manawatu and Marlborough.
It’s an exciting time to be involved in irrigation that will play an important part in achieving the Government’s ambitious goal of doubling the value of primary sector exports by 2025.
You have a great story to tell of technological innovation, of boosting our economy, of revitalising the regions and setting high environmental standards.
It’s up to all of us to keep selling that story and delivering real benefits to New Zealanders from irrigation.