Figure 6.1 Interviewees, by category,
out of a total of 29.
The categories of interviewees are summarised in Figure 6.1. Most were farmers, the majority of them irrigators.
Figure 6.1 Interviewees, by category,
out of a total of 29.
Most interviews were one-on-one, but in some cases business or family partners participated in the process. Over the 29 interviews, 37 people took part, 34 of whom were male, reflecting the male-dominated nature of farming in the district and the overwhelming involvement of men in the water allocation process.
In keeping with the confidentiality agreement with interviewees, names
are not revealed in this chapter, and every attempt has been made to avoid
giving details that might reveal the identity of an interviewee.
“Irrigation will mean farmers can guarantee supply.
In North Otago now, we can’t guarantee anything. The only thing
we can guarantee is that there is going to be another drought.” – a dryland
farmer.
The interviews took place towards the end of an extended dry period extending over more than three years. Dryland farmers cope with drought by a combination of destocking, cultivating drought tolerant grasses, storing feed during good growing years, and buying in feed when supplies run low. At such times, many consider irrigation. In the Kakanui Catchment there are three potential sources of water for irrigation: the Kakanui River and its branches, groundwater, and the Waitaki River. The Waitaki River is commonly and rightly regarded as the only one the water of which is not over-allocated. Many interviewees are involved in a proposal to bring water from the Waitaki River to the Kakanui and Waireka valleys for irrigation. The scheme would cover around 14,000 hectares and is estimated to cost around $2,500 per hectare for reticulation alone. Four farmers indicated that they would sell up if such a scheme eventuated because they could not afford the setting up cost of irrigation. Once capital expenditures have been covered, an irrigation scheme would likely be a user-pays system based on units of water consumed.
Most farmers spoken to realised that high installation costs would exclude
normal sheep and beef farming from the project, and that has long been
the staple income earner in dryland North Otago. Of the existing
irrigators, the more successful are those who operate dairy farms or are
diversifying away from the former line of sheep and beef. Irrigators
operating sheep and beef farms said that irrigation offered them
and their markets certainty, yet irrigation may not be especially profitable
due to the high cost of pumping and debt servicing. The irrigators
who reported doing well were dairy farmers or arable farmers branching
out into speciality crops. Many farmers and in-stream users
saw great potential in crops that require small precisely targeted amounts
of irrigation water and which do well in North Otago’s climate and soils.
Interviewees were asked whether they were satisfied with the current
system of allocating water for irrigation. Many did not know
enough about the topic to comment, particularly dryland farmers who had
little direct knowledge of and experience with the system, and these interviewees
are shown as “undecided/did not answer” in Figure 6.2. Interviewees who
listed significant problems with the current system were classed as “unsatisfied”
for the purposes of this analysis. Those who liked the current
system, but would like to see one or two minor changes made, were classed
as “satisfied” albeit with some reservations. Interviewees
who responded positively to questions about the current system were classed
as “satisfied.”
Levels of satisfaction are shown in Figure 6.2. None of
the in-stream users were entirely satisfied with the current system, and
few irrigator farmers were satisfied. The water administrators,
on the other hand, endorsed the current system.
Figure 6.2. User response to the current
system of water allocation.
One irrigator said that he liked the status quo because “it is all
politics. I prefer it because I can use the politics… I have
to, to survive.” However an in-stream user complained about
the political nature of the current system saying “farmers will gang up
at meetings. A lot are very strong debaters and are a very
strong lobby.”
Two irrigator farmers liked the current system because of the local Water Allocation Committee, meaning “farmers are effectively running it themselves, which is good.” In-stream users lack input to this committee, a source of considerable dissatisfaction to them.
Water administrators, more than a third of farmers and in-stream users,
responded favourably to the recent allocation of secondary water rights:
available when flow in the Kakanui reaches 800ls-1. To use
a secondary water right effectively, an irrigator would have to store water
for the summer period, which the water administrators feel would encourage
more efficient use of water in the entire catchment.
Dissatisfaction with the current system centered on cost, lack of
predictability, minimum flows, not enough monitoring and Regional Council
bias. Each of those matters is discussed in the following sections.
In-stream users and farmers complained about the cost of obtaining
a water permit and participating in the resource consent process.
One farmer said he had “wasted $20,000 through resource consent hearings.”
On top of that was the adverse impact on farm production caused by Environment
Court proceedings and the stalling activities of objectors.
He estimated a six figure loss in earnings through production being lost
due to delays in the water allocation process.
Another farmer spoke of having to give up his consent application due to mounting costs. This farmer had to seek a notified hearing, and said that “getting through a notified hearing is a matter of luck, depending on who reads the [news]paper that week.” One farmer experienced what he termed “jealous opposition from the existing water holders who thought their rights should be held in perpetuity for themselves.” A simple objection is sufficient for a notified resource consent hearing, which “opens up the field to everyone to object,” according to that farmer.
An in-stream user who did not want water taken from the river said “The cost of not abstracting water should not be solely borne by the farmers. That cost should also be met in part by the objectors.” Another farmer said, “Environmentalists have admitted to objecting for the sake of objecting. There is no need for that; you can sit around a table and talk about it. The applicant has to pay for the cost of the objections, including their lavish afternoon tea, as well as the consultants, which were very costly.”
Interviewees who had opposed an application for resource consent also
complained about the costs they incurred during proceedings.
Lawyers’ bills were cited as a critical hurdle for objectors, who seldom
have ample financial resources, challenging a water consent application
through to the Environment Court. Some irrigators and in-stream
users said that many in-stream users are angry because they have not been
listened to for years. They often oppose water right applications
on principle.
As one irrigator put it “[I am] a bit concerned about the renewal
process, I’ve invested [a certain amount of money] in this farm, ultimately
you are relying on [Regional] Council goodwill.” None of those
interviewed could foresee major problems with obtaining water right renewal,
however there was concern that the situation might change with a local
or national governmental change of personnel or policy.
In-stream users’ main concern with the current process was the effect
of water withdrawal on minimum stream flows in the Kakanui River.
The Proposed Water Plan for Otago (2000) sets the minimum flow of the Kakanui
at 250ls-1. Irrigators experience restrictions when flows approach
this level. Three in-stream users indicated that a minimum
flow of 800ls-1 would be more appropriate for fish, preserving the life
or mauri of the river and providing a valued resource for recreational
users.
There was also concern that current water permits involve far more water than is available in the catchment. Nobody disputed this claim. A recreational fisherman summed up the widely held sentiment; “To be able to allocate far more water than the river is capable of handling is a ludicrous situation.”
As more farmers use their full water allocation, in-stream users are becoming increasingly concerned that minimum flows will be reached more often. Higher rates of extraction lead in-stream users to the belief that the river is at minimum flow more often than in the past.
Changes in high-country land use lead one in-stream user to call for regulation of landuse to prevent altering flows in the Kakanui River. The water administrators said that it is unlikely.
Concern was expressed by one in-stream user that minimum flows have to be challenged when each water right is considered or comes up for renewal. Anger was expressed by one in-stream user that few consents are notified, so potential objectors don’t get the chance to object to an application because they do not find out about it until too late.
The water administrators responded by pointing out that the Otago Water
Plan will include comprehensive guidelines for the management of water
supplies in the Kakanui Catchment, including such matters as minimum flows.
The Proposed Water Plan was released midway through the period of the interviews
so few interviewees were able to comment on it. None of the
in-stream users were happy with the unaltered minimum flow in the proposed
plan.
Without being asked, 12 interviewees stated that there was not enough
monitoring and policing of water abstraction from the Kakanui Catchment.
Only one irrigator farmer described additional monitoring as unnecessary.
To him, the local Water Allocation Committee was doing a perfectly good
job of monitoring. A number of farmers accused others of taking
more than their water right allowed, and two farmers admitted to that.
Very few pumps have meters, and some farmers couldn’t be sure how much
water they were pumping at any given time.
Many of the dryland farmers, irrigator farmers, and in-stream users
interviewed were unhappy about wastage of water through borderdyking, using
water during times of high evaporative stress, and letting groundwater
run down streams.
The majority of interviewees dissatisfied with the current system
believed the Regional Council was biased towards favoured groups.
Irrigator farmers tended to see too much emphasis placed on in-stream users,
particularly Maori. In their turn, in-stream users thought
that too much emphasis was placed on the needs of irrigator farmers.
One in-stream user accused a person in authority of manipulating the system
to allow more water abstraction from the catchment. A dryland
farmer, who wanted to irrigate his land thought the Council was biased
towards existing water right holders, especially when little was done to
announce the availability of secondary water rights.
The water administrators believed that they were not biased, but follow
guidelines for balancing opinions as set out in the Resource Management
Act (1991).
One farmer complained about leachates from a dairy farm polluting
a drinking water bore, while in-stream users complained about water quality
in the river, where pollution and low flow rates cause difficulty.
Interviewees were asked to indicate their preferred water allocation
system from the three models outlined in Appendix C. Some interviewees
preferred two of the systems, so they were recorded as “half persons” in
the diagrams (Figures 6.3, 6.4, 6.5). Twelve interviewees prefer
the status quo, 11 preferred Tradeable Water Permits, 3 preferred the Fully
Privatised Catchment, and 3 indicated no preference. Irrigator
farmers tended to prefer Tradeable Water Permits, while dryland farmers
and in-stream users favoured status quo.
Figure 6.3. Preferred system of water
allocation, by group in the Kakanui Catchment.
Interviewees were asked about their vision for North Otago as an
indication of their level of optimism. This was done to allow
a test of the hypothesis that people who support a free-market approach
to water allocation are opportunistic and see potential for development
and growth in their region. Those who only gave grounds for
pessimism - such as further farm amalgamation, population decline, and
declining farm income - were rated 1, while those who only indicated unconstrained
optimism - such as farms becoming more profitable - were given a rating
of 5. Figure 6.4 shows people who prefer the current process
are less optimistic about the district than those who prefer Tradeable
Water Permits or a Fully Privatised Catchment.
Figure 6.4. Optimism about the North Otago District
and preferred system of water allocation. The bars are divided
proportionally, and numbers of interviewees are given. Halves
indicate where interviewees have selected two water allocation systems.
Interviewees were then rated for their strategic thinking: conservative,
if they had no obvious plans for ways to proceed in business or life; and
progressive, if they employed a wide array of information sources, were
actively exploring new technologies, and were able to “think outside the
square.” This question was developed to test the hypothesis
that people who support free-market allocation of water are innovators
who look for opportunities to expand and diversify their operations.
Figure 6.5 shows relatively more Current Process supporters are conservative
in their strategic thinking than interviewees who prefer the Tradeable
Water Permit or the Fully Privatised Catchment systems.
Figure 6.5. Interviewee’s strategic thinking
compared with their preferred system of water allocation. The bars are
divided proportionally and totals are given. Halves indicate
where an interviewee has selected two water allocation systems.
A system of Tradeable Water Permits was the second most preferred
system of water allocation, after the Current Process. What
were positive aspects to some interviewees were seen as negative aspects
by others.
Four interviewees approved of the Tradeable Water Permits system
because it gave users greater control over how the process is run, with
less government intervention once the resource is allocated.
However, one concern of interviewees who disliked the proposed system
of Tradeable Water Permits was the notion of an inevitable power shift:
“You could see someone with lots of money buying up all of the water, I
could see that causing a few problems.”
Five interviewees said that water permits would never be traded
because no farmer would be silly enough to trade away his or her water,
a resource that is valuable during drought and to the farm’s value.
“You spend all that money setting up your farm for irrigation, you can’t
just get [irrigation water] cut off, so you wouldn’t want to trade it away.”
However, another interviewee said that a water right has value separate from the land. If tradeable it would give farmers more options. “You could sell, rent [or] borrow one. Even on a daily basis it would be good for a dairy farmer to sell an unneeded water right to a crop farmer for a day.”
One farmer allowed that he had sold water to a neighbour when it wasn’t needed on his farm, and another said that he had been approached by his neighbours who wanted to buy unused water from him. He declined because it was not legal to do so.
The water administrators said that while Regional Council publications do not explicitly allow trade in water, “if someone surrenders a consent, and someone else applies for it and money changes hands, then so be it. [However] the Regional Council needs to be in control so they know who has the water permits, and so they know that people are not exceeding their allocation.”
The farmer who had informally traded water from his right said that
to go through the Regional Council “would be too much hassle.”
Both farmers agreed with the deal, money changed hands, and the total abstraction
of water did not exceed the amount allocated.
Interviewees who preferred the system of Tradeable Water Permits
said that it would encourage water efficiency. According to
one proponent, “A lot of farmers out there who do not use their water rights
efficiently. Tradeable Water Permits would allow those rights
to be taken off them for some money and transferred to someone who can
better use them. Everyone’s happy.”
One farmer spoke of the time when the now defunct Catchment Board charged a $200 fee on water right holders. Holders who did not use their rights gave them up to avoid paying the fee, which released water rights to the people who needed them. The Regional Council made the political decision not to use the economic tool of administrative fees as a means to encouraging efficiency. The water administrators said that the “proposed water plan has a series of measures to encourage water efficiency. The best one is the minimum flow where users know that they will face restrictions sometimes, so they will replace their leaking race with a new pipe.”
While there was debate over minimum flow, the fact that Tradeable Water
Permits involve minimum flows was appreciated by many interviewees.
“[You are] controlling [the] resource, with minimums and maximums, but
at the same time you have got the ability to distribute that water to wherever
it is needed, because if you don’t need the water, maybe someone else can
use it.” None-the-less several interviewees had reservations
about Tradeable Water Permits because it was thought they would encourage
greater water use. As one in-stream user put it: “They will
use a hell of a lot more water because it will mean people will buy up
water rights not being used. I would say that is fine if you
raise the minimum flows, but to accept this without a minimum flow change
will only mean less water in the catchment.”
Eight interviewees thought that farmers should not be able sell
water from their rights. “Why should people be able to sell
something that they never paid for?” was a commonly voiced question.
There was concern that two or three people across the catchment would end
up owning all the water. Concern was also expressed about overseas
interests or large national companies buying water in the catchment and
controlling its use.
Most interviewees reacted angrily to the proposal of a Fully Privatised
Catchment, but two supported the idea, and two favoured a hybrid
of it and the system of Tradeable Water Permits.
Five interviewees said the Fully Privatised Catchment placed too
much emphasis on money, echoing sentiments expressed over the Tradeable
Water Permits: water should be free. The free-market was described
by two interviewees as responsible for “sending people to the wall” and
privatisation had “resulted in raised prices elsewhere, especially in electricity.”
Four interviewees had a mixed response to the Fully Privatised Catchment by saying “While it should encourage efficiency, it will also encourage greed.”
Four interviewees thought that the Fully Privatised Catchment would
raise prices so much that it would become economically prohibitive to irrigate.
Many farmers were struggling to make irrigation cover running costs without
having to pay for the water as well.
One interviewee said that it was “wrong to take water off existing
users” when a Fully Privatised Catchment was implemented. There
was concern that the company, cooperative or individual that owned the
water would be given too much power, although one interviewee thought that
would be better than the situation currently in place with the Otago Regional
Council, as long as the ownership stayed in local hands. Many
interviewees did not see foreigners and company farms as desirable owners
of water. One interviewee thought North Otago would end up
back where it started, where “you’ll end up like [serfs] and have the old
large estate system.”
There was concern that a pure economic model does not balance differing, especially environmental, views. Twelve interviewees did not think in-stream users could or should have to pay to keep water in river channels. One interviewee did not see the purchase of water by conservation groups as adequate because conservation groups would be tempted to sell if the price got too high. There was general doubt that a conservation group could represent the aspirations and wishes of wider society.
One farmer believed that the Fully Privatised Catchment would be bad
because “fishermen have enormous wealth from license sales and will buy
up all the water.” However, a fisherman retorted by saying
that there was no way fishermen could ever afford to buy water.
Some interviewees saw practical difficulties in charging small users for
the use of the water. Four interviewees thought the system
would be impractical because nobody would ever want to sell their water.
In-stream users, water administrators and many farmers wanted to
keep guarantees on minimum flows. As one in-stream user put
it: “How can recreational users possibly buy water rights, when the water
rights under a privatised system are going to be so valuable that only
those getting an economic benefit will be able to afford them, unless the
government would buy them on your behalf.” One in-stream user
thought that in-stream users should own the water, and not have to pay
for it. “Basically we’ll need to get together a bookstall so
we can get some money to buy the water back.”
Water efficiency and finding the most economic value for the water
were seen as positive outcomes of the Fully Privatised Catchment.
“The cost of the water would go up during peak demand, which would stop
people using the water uneconomically.” One interviewee thought
that the Fully Privatised Catchment was fair because it “provides a system
whereby the cost of not abstracting water is not borne solely by the farmers.”
Several interviewees were able to cite other successful irrigation schemes
that effectively operate as private schemes where a user pays system would
operate.
The right to own the water lead some people to think that Maori would
then claim the water, as they are the original owners. One
interviewee thought this would be a good, and two interviewees thought
that it would be a bad, thing.
The Fully Privatised Catchment also raised the issue of water ownership.
Two farmers were not happy that water stored naturally or running through
their properties is not theirs to use. One farmer has a significant
amount of snow on the farm over winter. “For three months of
the year we would have snow on the backblocks that we couldn’t graze at
all. When that melts [the meltwater] comes through our farm
and we are not allowed to use it, yet the guys [on] the Kakanui are allowed
to use it.” Another farmer is unhappy that he is unable to
harvest water that falls and runs off his farm without a water permit.
And a permit is unlikely to be issued by the Regional Council.