Insight
APRIL 2015 //
FROM THE GROUP CEO
Irrigation to sustain communities and consumers This summer has proven something of a wake-up call to everyone in Canterbury who relies directly or indirectly upon the primary sector for their livelihood. News that the Opuha irrigation scheme has had to be shut down on grounds of low water flow and unprecedented use is a sobering reminder that even the most apparently robust, well constructed scheme has its limitations in the face of that most simplest of need—more rain. This scheme in particular has been held up for the past decade as an example of what a community owned irrigation scheme can achieve in every sense – meeting the needs of farm businesses, and recreational rate payer users. The fact it has been restricted for the first time in over a decade indicates how robust it has proven to be. We have a government that has made it clear there is a desire to expand irrigation projects, with the $400 million Crown Irrigation Fund clearly labelled with that purpose. However irrigation groups have a point when they say while the fund is welcome, it is a somewhat clumsy means to fund such projects. Federated Farmers spokesman Ian MacKenzie recently pointed out the Fund is lending only upon commercially viable projects, and if a scheme qualifies then it is quite likely it will also qualify for
a loan from a commercial bank, sometimes on better terms. The government has been urged to take a broader view beyond simple “commercial viability” when assessing schemes, considering the wider social, recreational and even environmental benefits projects like Opuha bring alongside the economic value having water for irrigation delivers. Flipping the “commercial return first” requirement on its head, take a moment to consider Lake Ruataniwha at Twizel. Its creation as a world class rowing venue alongside its hydro purpose, and subsequent popularity of that sport, has injected vitality and business into the previously sleepy hydro village, with thousands coming each year for national school and club events. But no “cost:benefit” analysis dictated its creation. Ruataniwha is an example of a project that would struggle to even get off the drawing board today, and indeed required some creative funds transfers by its creator Max Smith to bring about even 30 years ago. But no one would today deny what it has meant for a region once just a view from windows of passing cars to established tourist venues of Christchurch or Queenstown. Similarly, it is a known fact irrigation schemes are notoriously hard to get launched with a velocity that delivers a realistic commercial return from the get go.
billions to massive schemes, it should not be unreasonable for New Zealanders to expect a level of government investment to kickstart projects paling in comparison to the scale of these international proposals. Nor should it be too much to expect the government to forgo the expectation of a commercial rate of return, at least in the early “start up” stages. As more and more irrigation users come on board with their own capital and skills to intensify their farming operations, an expectation of a return kicking in could be expected. Like Opuha or even Ruataniwha, the community and tourism benefits start to deliver as local businesses grow, and a more diverse economy thrives on the banks of such schemes. Government initiated irrigation schemes would not be without expectations, many already enforced through the resource management process. That alone should be an endorsement compared to other governments’ “mega schemes” that involve wholesale drowning of valleys, shifting of populations, and degradation of downstream environment. As consumers become more sophisticated and questioning about where their food comes from and how it is grown, NZ is well placed to meet those expectations with sensitive, sustainable irrigation projects that deliver to the local community, and the global consumer.
In a global environment where overseas governments often wholeheartedly commit
Ruralco Card—All purchases plus fuel This is the charge card for every business, offering great discounts for all your business and family needs and gives you: • 12¢* per litre off the fuel pump price at any Mobil Service Station nationwide; • Plus access to an ever increasing network of local and national suppliers;
• Pin security; • All purchases listed on one monthly account.
Don’t have a Ruralco Card? Contact us on 0800 RURALNZ (787 256) to order now. RURALCO NZ LTD
PO Box 433 Ashburton 7740
Tel 0800 787 256 Fax 03 307 6721
ruralco@ruralco.co.nz www.ruralco.co.nz
*Terms and conditions apply.
Your partner in business growth