Agriculture minister Damien O'Connor says the Waimea Dam project needs to go ahead because "they need the water".
The Tasman District Council last week voted against the project, a decision met with widespread disappointment from the rural sector.
O'Connor told The Country's Jamie Mackay today: "Yes there is a cost of course to ratepayers, but actually the irrigators are bearing a big part of the cost."
"I think the process hasn't been handled well for probably the last 10 or 15 years to be honest. It's a bit unfortunate. It's a sad outcome," O'Connor said.
Mackay asked why the Government didn't contribute to the project through Regional Economic Development Minister Shane Jones' Provincial Growth Fund.
O'Connor insisted there was "considerable commitment" from the Government through Crown Irrigation Investments but that ultimately it was up to the Tasman District Council and irrigators to "work through this."
"I don't think they did well to get the community on side or understanding actually the need for the water and it's been a whole lot of different factors that have lead to this outcome."
Mackay suggested the Government was "plainly anti-farming" when it came to issues such as irrigation. O'Connor said this was a "ridiculous statement."
"Of course we support water and water storage, we've just got to take a more sensible approach to this."
"Smart irrigation. Choose where you're going to put it, choose how to fund it and of course it'll go ahead."
Also in today's interview: Damien O'Connor says reducing methane emissions doesn't necessarily mean fewer cows, gives a brief Mycoplasma bovis update and defends the business acumen of the current Cabinet.