The irrigation pioneer and 2013 Lincoln Bledisloe Medal winner believes the problems around NZ’s irrigation funding are heightened in a global environment where hedge funds are seeking investment in a world requiring about $3.7 trillion a year in infrastructure investment.
That amount is about the equivalent of Germany’s annual GDP and the hundreds of millions irrigation projects here are seeking represent small change for infrastructure investment funds.
“Those funds would love to get stuck into a modest return, stable sort of infrastructure investment like these but that’s just not happening.”
He puts the lack of investment first and foremost down to the complications, cost and uncertainty the Resource Management Act brings.
“They are nervous about it. It is just too uncertain.”
Add in a coalition government with assorted compromises around environmental standards and regional investment the investment environment becomes even more fraught, he said.
“This situation we have is one we have created wholly on our own.
“We have no cross-border conflicts or demands with other countries yet we seem to have worked out a way to develop things so we don’t do anything.
“We spend years in environment courts and it’s farmers who end up paying for that.”
The controversial Crown Irrigation Investment Fund was no lolly scramble for irrigators with tight terms more onerous than banks’ conditions in some areas.
“But what it did do was it gave those banks confidence. It was a surrogate shareholder and provided that security.”
It also reduced the risk perception of the scheme in potential farmer shareholders’ minds.
“So when the CII was dropped that tacit approval and support was removed.”
He believes it has affected farmers’ views in all the affected schemes (see Farmers Weekly August 20 issue).
“And why would it not? This is a long-term investment that needed some certainty.”
Irrigation has also fallen foul of highly organised and now unified environmental groups that threaten the social blessing to continue farming using irrigated water.
“And we are now seeing farmers and farmer co-operatives like Fonterra start to move to protect themselves and their shareholders. The example is the MacKenzie dairy operation (see Newsmaker on page XX) that Fonterra moved to distance itself from – they just don’t want any more trouble and it’s the same for existing irrigation companies.”
The result is a growing haves and have-nots split in the farming community – farmers who have water and are intent on keeping it and those who would dearly love it but can’t get it.
The positive environmental benefits of irrigation should play well with the broader public but even so schemes are still struggling.
“If you take the Hunter Downs scheme, the Wainono Lagoon was to be augmented by it and the only people paying for that were farmers but they have had so much opposition.”
But the Central Plains scheme has amply demonstrated the positive environmental benefits the projects deliver, including better flow into Lake Ellesmere and the Selwyn River catchment and a reduction in aquifer take from deep bore pumps.
“Irrigation has been a strong enabler for these schemes. It brings in some hard cash but delivers public good. It’s something the community is interested in and benefits from.”
Heiler said NZ lacks a multi-objective, multi-use approach to water use.
“We have lost that centralised capacity to plan for a multi-objective outcome of resource use.”
Nothing highlights that more than the Hunter Downs struggle.
“Hunter Downs had the most reliable water supply scheme in the Waitaki and even then that scheme can’t get going. If we can’t do it there we can’t do it anywhere.
“It’s hands off from central government. There is no base for water resource management. And with RMA case law all we have done is drift somewhere no one wanted to be. It’s expensive and there are no positives for the environment or anyone else except the legal profession.”
The opposition came despite United States experts assessing NZ’s irrigation technology as world leading in terms of efficiency.
Heiler is calling for a bi-partisan government initiative rather than devolving control to 13 regional governments.
He has spent a lot of time out of NZ working with water authorities in countries significantly less endowed with it.
“They cannot believe we are in the situation we are in today.”
