Talks with farmers on water use

Press, 23 March 1985, Page 2

Talks with farmers on water use

Farm editor The Ministry of Agriculture in North Canterbury will discuss with fanners in the Waiau and Balmoral Irrigation schemes ways of making their water use more profitable.

This comes after notification by the Minister of Works and Development, Mr Colman, that water charges for the two schemes will rise to $136 a hectare, a 10-fold increase on what farmers are paying now.

Mr Maurice Batey, senior farm adviser in the Ministry at Rangiora, said yesterday that advisers would meet fanners in Waiau and Balmoral to discuss what could be done to put them in a better position. The Ministry would also have to discuss with all irrigation committees in Canterbury the methods of financing schemes and how farmers could repay the onfarm and off-farm costs of development. “The community is agreed that the farming future of Canterbury is tied up with irrigation development, and so the costs and ways of financing such development are a wider problem than just Waiau and Balmoral,” said Mr Ba-

tey. A study by another Rangiora Ministry adviser, Mr Philip Everest, who has since left the Ministry, showed that water charges of $l4O a hectare would result in farmers carrying debts (for on-farm and offfarm costs) of $l7 a stock unit annually. This would be completely uneconomic for intensive sheep producing but is the main farming type either practised or proposed by irrigators in the Waiau scheme in particular.

Soils on about two-thirds of the 17,000 ha Waiau scheme area are suited to pastoral activities, not cropping. This means that further diversification must be to dairying, deer or other livestock species.

More farmers near the Balmoral scheme area would be able to use their water over crops, because of better soils and flatter land, but about one-third of that area is also confined to pastoral activities. Canterbury Ministry officers have suggested much longer repayment terms for loans raised for irrigation development, arguing that the life of such schemes might be 100 to 200 years. One practical suggestion has been to repay on-

farm debt (borrowings for irrigation channelling, border-dyking, pasture reestablishment, spray irrigators) plus operations and maintenance fees during the first 20 years while capitalising water charges. A second 20-year period could be used to repay water charges, which the Government is proposing be set high enough to recoup much of the public expenditure on off-farm works. In the case of Waiau this might result in debt loadings of about $lO a stock unit annually over 40 years, rather than the $l7 facing farmers under the present policies. Such a restructuring of repayments could satisfy the twin aims of minimising the subsidy component of irrigation development while making it economic for farmers to go ahead, Ministry officers believe. Agreement in principle to such an arrangement, particularly by the Government, could lift the black cloud which has hung over irrigation development in Canterbury since increased water charges on all schemes were first mooted and the 1984 Budget halved the subsidy input to the offfarm costs of future irrigation schemes.