Irrigation could boost regional economy by millions; study

A newly-released scoping study has shown investing in major irrigation projects in the Kaipara and mid-North could create hundreds of jobs and boost the regional economy by tens of millions annually.

Despite relatively high average annual rainfall, a lack of suitable storage means much of this water can’t be harvested for use at other times, including summer and during droughts; the latter repeatedly plaguing parts of the region in recent years.

Authorities keen to see the region’s water used more sustainably have been investigating the potential of establishing further irrigation schemes, which would not only ease future drought impacts, but potentially deliver economic and environmental benefits.

Only about 8500 hectares of Northland is currently irrigated (most of it for horticulture) and the region is home to just two 1980s-built irrigation schemes; one near Kerikeri and the other at Maungatapere, near Whangarei.

Penny Smart, who represents the Northland Regional Council’s Kaipara constituency, says like the existing Kerikeri scheme, any new irrigation ventures would likely have a predominantly horticultural focus, rather than enabling the conversion of land to dairy.

She says Kaipara and the mid-North have already been identified as potentially viable locations for larger scale irrigation initiatives and the new study looks in more detail at the availability of water and likely viability of community water storage facilities there.

The $300,000-plus cost of the study – dubbed ‘Scoping of Irrigation Scheme Options in Northland’ – had been jointly met by the regional council and central government.  It is available on the council’s website at www.nrc.govt.nz/economicdevelopment

Carried out by a consortium of consultants (led by Opus) over the past nine months, the report found the demand for water was significantly more on a per hectare basis – but varied less seasonally – in the Kaipara than the mid-North.  “Water in the mid-North will be utilised over a longer period of each irrigation season.”

Councillor Smart says a suggested, larger-scale Kaipara water storage option would encourage diversification of existing land use, as well as provide a reliable water supply within Dargaville and the wider community.

“The study estimates around 6300ha – much of it on the Pouto Peninsula – could be irrigated for about $115 million, predicting this could lead to employment for another 950 people and contribute about $85M to the region’s GDP annually.”

She says its rainfall, geography and likely demand meant three cheaper and smaller options had been suggested for the mid-North.  For example, one dubbed ‘Mid-North A’ could cost about $22M and enable irrigation of about 1600ha south of Kaikohe.

Despite its smaller size, securing a reliable water supply would enable higher value use of local land and provide ‘significant opportunities’ within the town/wider community, for example generating about 500 extra jobs and boosting regional GDP by about $70M.

However, building the schemes would not come cheap; roughly $17,000 per ha capital costs for the Kaipara option and more than $11,000 per ha for Mid-North A.

“If the focus is placed solely on the ability of farm gate returns to pay for the schemes they are unlikely to proceed,” the report notes.

Councillor Smart says while growers couldn’t afford to build the schemes alone, given the likely flow-on economic, environmental and other benefits they would offer the wider community, there was a potential case for wider investment, including by both central and local government.

“The study acknowledges the potential costs to develop all four schemes in the scoping report – as much as $300M – would be considerable for Northland alone.  With that in mind, it suggests one possible solution could be to establish a special funding body to enable a mix of public, private and iwi investment.”

Initially, that entity could be as simple as a community steering group with participation from all three groups, but it would need to be able to adapt to a more formal structure as and when the development process advanced.

Also recommended are much more comprehensive pre-feasibility studies (ie down to individual farm level) which would likely cost $1M to $2M and take another year to complete.  These would also include development of an investment case and benefits model and would need to encompass detailed environmental impact assessments.

Councillor Smart says regional economic development agency Northland Inc had already recognised the massive difference improved irrigation could make to the region’s future fortunes, ensuring it had been listed as a key project in last year’s Tai Tokerau Northland Economic Action Plan.

She says regional councillors had yet to come to a firm collective position on the irrigation issue and over the coming weeks would review the new information contained in the latest study in more detail.

The council also planned to share the report’s findings with its district council counterparts and liaise with both them and central government to see what appetite there was, if any, to progress things. 

However, even if support was forthcoming, it could still take several more years – and many millions of dollars of design and engineering work – before construction of any irrigation schemes finally began.