Rather than chucking money at any and every irrigation scheme, it is a case of approaching each proposal with an understanding there are likely to be barriers to investment which need to be addressed.
What are these barriers and why can't prospective irrigators just get the cobwebs out of their pockets and get on with it?
Irrigation doesn't result in 'super profit' farm gate returns. It is often used as drought insurance for a portion of the farm, rather than being used to ramp up production.
For farmers in particular that means taking a large gamble they will be able to change farming systems to make the new investment pay for itself, a concern underpinned by farm return variability.
This variability impacts both the decisions of irrigation investors and also the decisions of banks and other financial institutions. This feeds into issues of scale and co-ordination.
Achieving critical mass for investment requires coordinating farmers, banks and third party investors to agree to participate and provide large amounts of funding.
Some farmers have put so much effort into getting firm commitments to a scheme, a sheepdog would be impressed.
Who but the potential irrigators should care if these schemes don't proceed? In terms of economic returns, irrigation can provide significant public or indirect benefits.
A Ministry for Primary Industries-commissioned report from NZIER and AgFirst estimated that, based on 2011/12 figures New Zealand's real GDP would be 2.4 per cent lower (or $4.8 billion less) without irrigation.
This is not just farm earnings.
Better farm gate returns lead to greater demand for farm services and processing of primary product. In other words, downstream economic benefit.
Investment in irrigation can allow a community to have this economic cake and eat the ecological one too. More water means less pressure on resources, better stream and river flows, and better resourced aquifers.
Augmenting flows through irrigation gives us the economic benefits without the environmental costs, provided the subsequent production does not breach environmental standards.
These barriers are addressed in part through central government's Irrigation Acceleration Fund, which aims to support the development of irrigation infrastructure proposals to the 'investment-ready' prospectus stage.
A step beyond this, Crown Irrigation acts as a bridging investor to make "targeted investments into schemes, alongside other partners, that would not otherwise be developed" using established investment criteria.
District and regional councils also have some discretion to fund irrigation development where there is a clear community benefit. Generally public sector support takes the form of seed funding for capital development with the requirement for a commercial return to the lender, rather than committing public money to fund operating costs.
Addressing these barriers to investment in irrigation unlocks economic and ecological benefits for communities and irrigators alike.
