Abundant fresh water has long been part of New Zealand's agriculture competitive advantage. Now there are plans to better manage our water resources to grow the economy. The Government's goal is for exports to increase from 30 to 40 per cent of GDP by 2025. With the primary sector pencilled in to do the heavy lifting, water management will play an important role.
The blueprint is a 2010 New Zealand Institute of Economic Research (NZIER) report. It says government investment in regional water projects could mean 340,000 hectares of new irrigation. That is enough to boost exports by $1.4 billion a year by 2018, rising to $4 billion a year by 2026. Dairy, livestock, crops, dairy support and horticulture are all part of the mix.
In the 2013 Budget, the Government allocated $80 million to fund regional irrigation projects. At the time Primary Industries Minister Nathan Guy announced plans to invest up to a further $400 million in irrigation schemes with the goal of encouraging further third-party investments.
Guy Ensor, who manages BNZ's rural water infrastructure business, says water infrastructure is expensive to build. He points to irrigation projects in Canterbury where, over the years, farmers have spent $2 billion.
Though that's a large sum, the return on investment is significant. Ensor says irrigation schemes can increase farm output by as much as two or two and a half times. And delivering water means getting four to four and a half times as much production out of each kilogram of nitrogen used - a huge saving for farmers.
The aim with most irrigation projects is to harvest water during spring peak flows and store it for dry periods. It's not quite that simple: Ensor says there needs to be a balance between social, environmental and economic factors. For the social component, planners need to get local communities on-side before embarking on large scale water projects. That task is made easier when storage lakes can be used for recreation.
The environmental angle isn't just piety; New Zealand's agricultural exports trade off the back of our nation's clean, green image. Storing water helps ecosystems by reducing stress when there are lower levels of rainfall.
It also takes pressure off aquifers and lowland rivers. And importantly, more efficient water use means less nutrients are leached from the land into nearby waterways.
Guy says work is under way on a national policy statement to deal with the wider issues of water infrastructure projects.
Making better use of water isn't just about building storage. Guy says technology has an important role to play as farmers embrace precision agricultural techniques.
Until the early 1990s, New Zealand farmers mainly used simple flood irrigation. Each farmer would have a turn at taking water from a river. They would take as much as they could - partly because they didn't know if there would be any left the next time their turn came.
Ensor says they would use far more than they needed and that could pull nutrients from the soil.
Now farmers map the soil profile on paddocks and fields to understand how the land holds moisture, then use variable rate irrigation to deliver the right amount.
They use sophisticated software which knows how much needs to fall on each square metre. This generally means spraying from large centre pivots. Water use is metered to maximise efficiency.
The precision agricultural approach uses considerably less water, or as they say in international food circles, the goal is to get "more crop per drop".
More recent irrigation projects use water piped under pressure. This means power isn't needed to turn the spray arms on the pivots - which is good for the environment. It also means less water is lost through leaks. More importantly, it means water can be spread over a greater area driving more production.
Ensor says one development he'd like to see is a new approach to longer-term resource consents so the cost of water infrastructure projects can be spread over the life of the asset. He says it is difficult to make some projects pay over, say, 30 years. This has led to scaling-down and less efficient projects.
Ensor says a longer time horizon, over say more than one generation, would lead to even greater benefits for the New Zealand economy.