Hon Jim Sutton
Speech Notes
19 September 2001
NZ Irrigation Association launch, Ashburton

Chairman Barry Englebrecht, ladies and gentlemen: thank you for inviting me to speak tonight.

Water management is an important issue, and it is one that I believe is only going to be more important in the future.

The rate of irrigation expansion has been spectacular and it is continuing. MAF have calculated from local authority records that the irrigated area in New Zealand has been increasing by nearly 50 per cent each decade since the 1970s. Currently the rate of expansion would be even greater.

Local authority records as at 1999 indicated that water had been allocated for approximately 600,000 hecatares, though it is believed the area actually irrigated was nearer to 500,000 hectares.

As land usage changes, particularly in Canterbury and Otago, the pressure on water supply is increasing. More and larger irrigation schemes are planned.

Water is a vital part of agriculture - "nothing grows without it" - and other commercial and recreational activities in rural areas.

Analysis suggests New Zealand has enough water for its needs, but sometimes that water is not in the right places at the right times. Water management policy is going to be increasingly crucial.

Currently, about $5 million is being spent on water resource investigations and feasibility studies largely for irrigation development, through the Contestable Water Fund and the Sustainable Farming Fund.

In addition to that, the Government is contributing the lion's share of funding for an investigation of appropriate corporate structures for irrigation schemes.

The Economic Development Ministry is paying $50,000 and irrigation companies $25,000 to fund the project.

The project, designed by Agriculture and Forestry ministry officials in consultation with MED and Treasury, is assessing the community benefits and funding opportunities for investment in new irrigation projects. It will feed into policy work being done to help decide Government policy on backing proposed schemes.

The project team is expected to report by the end of next month.

That's part A.

As they say on TV: "but wait! There's more!'

Part B is another project broadens out the consideration of the Government's policy position on its role in the implementation of large-scale, community-initiated water enhancement developments, where there is a significant irrigation component. It will also involve the consideration of long-term water needs for significant communities.

It will help define a strategic policy position that contributes to regional development plans and long-range water allocation policies.

As part of that work, five studies are to be commissioned. The scope of these is still being worked on, as is where the funding will come from. MED might step in again.

Those studies will look at reviewing international models and experiences, reviewing equity investment options, determining the role of central government and the role of local government, and determining economic issues related to previous irrigation investments.

It is hoped that these studies will be completed by the end of November.

Further Government work will follow on from those projects, with decisions taken by the end of April next year.

Increasing land use changes and pressure on water means that it is more and more important for central and local government to have adequate policies on water usage.

I welcome the formation of the Irrigation Association. I hope members will work constructively to encourage debate and analysis and the development of water use policies that will improve the economic, social, and environmental sustainability of our country.

Irrigation underpins rural communities in summer-dry areas of both North and South Islands.

As a former farmer who has experienced many South Canterbury droughts, I am well aware of the security irrigation can bring to farm families in these areas.

Today, however, irrigation does much more than that. The recent expansion in irrigation has again illustrated how it allows land use changes as product price relativities alter. Choices in land use are important for the ongoing viability of rural communities.

Our market places are becoming increasingly fussy about product specifications. In both horticulture and agriculture, the greater control of farm systems which irrigation brings, plays an important part in meeting these changing consumer needs.

Water, however, has values for all New Zealanders, and irrigators, like other water users, have responsibilities to ensure water is effectively and efficiently used.

We can continue to make progress in this area and I am very pleased that efficient water use and the development of standards and training opportunities are prominent amongst the objectives of the New Zealand Irrigation Association.

Irrigation schemes don't just enable farmers to use their land in particular ways. Irrigation schemes also have impacts on entire rural communities.

Information gained from analysis of a survey of Canterbury farmers MAF carried out in 1999 shows that small towns near irrigation scemes gain from the extra income farmers with access to those schemes earn and then spend.

Arable and sheep and beef farmers have very similar expenditure patterns in percentage terms, with approximately 75 per cent of their spending happening in small towns or Ashburton or Timaru. Dairy farms have a different spending pattern, with only 28 per cent of their spending happening in small towns.

However, the impact of the larger amount of dairy farm spending in total expenditure means that dairy farms put twice as much money through the economy of small towns as arable farms. Arable farms themselves put 2.5 times the amount of income through small towns as sheep and beef properties do.

The big winners from dairy farm expenditure are the medium-sized towns of Ashburton and Timaru, with 55 per cent of spending going through them ? about $1120 a hectare.

Farmers in general seem to purchase the majority of their direct inputs or goods as close to their farms as possible.

The results of this study suggest that there are complex interrelationships between location, land use, profitabilty, and in terms of the contribution that farming makes to the local economy. They are important for planners, rural businesses, and local and central government to take into account when making decisions about irrigation.

Ladies and Gentlemen: it is my belief that New Zealand has ample supplies of water.

What we don't have is enough planning and management. I hope this organisation can help remedy that.

Thank you.

ENDS

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