Debate on 2014/15 Annual Review - Primary Sector

Tuesday, May 3, 2016

STUART SMITH (Deputy-Chairperson of the Primary Production Committee): I would like to move that the report for the Primary Sector be noted. I think it is a fantastic report card, which we can spend some time to explore.

We have an aspirational goal of growing exports to $64 billion by 2025 for the primary sector, and the question is how do we get there if we accept that goal? I think it is great to have a stretch target; it is something that we can aspire to.

We have such great performance now that is starting to come through in other sectors like the horticultural sector, like the wine industry, that is really driving exports. In fact, although the dairy sector is going through a difficult time, we have increased exports, and that is underpinned by those other sectors.

It is a pretty good story, but what I want to focus on today are some of the areas in irrigation that the Ministry for Primary Industries, through Crown Irrigation Investments and the Irrigation Acceleration Fund, has helped to drive some irrigation schemes on.

In particular, Crown Irrigation Investments has a fund of $400 million available for direct capital investment for regional-scale irrigation schemes. What does that mean, and how does that help? There is often talk about how irrigation schemes should be able to stand on their own two feet, and they will in time, but the issue is that there are so many moving parts to get an irrigation scheme up and running.

There is a funding hump to get over, and, in particular, the Flaxbourne Community Irrigation Scheme comes to mind. It is a scheme in which individual farmers would have to fund a 15-kilometre pipe to storage, and an individual farmer could not afford to put that in—even two farmers would struggle to make it past the feasibility stage.

So the council funding has helped in that particular scheme by providing a mechanism for the farmers to get together and get their scheme over that hump. But there has been some great help with the Irrigation Acceleration Fund, and the Minister made a very good announcement on that not so long ago.

But to demonstrate the benefit of that irrigation scheme, you really only have to look at the example from a farmer like John Hickman from Taimate, which is in the Flaxbourne region. Three percent of their property, a sheep and beef property, is irrigated and growing grapes. That 3 percent of the area provides 40 percent of the revenue of that property, and if you look at it on the basis of profit, it is an even greater advantage to have irrigation there—it is closer to 50 percent of the overall profit, from just 3 percent of that area.

Viticulture, as we know, is a very environmentally friendly industry, and it goes on to have great value-add through the wine-making process, where all that value is added to the grapes that leaves this shore in a bottle of wine with New Zealand on the bottle.

It is actually a great advantage to New Zealand in other industries, because it really gives us a reputation overseas as a producer of high-quality, world-class products, and I think that is a wonderful example of what can happen through an irrigation scheme. That scheme still has to go through the process and get final tick-off by the farmers, but I really look forward to that growing, by many millions of dollars, the export potential from that region.

In fact, the Marlborough region has just done a labour market survey and, based on surveying all its members, 7,000 hectares are proposed to be planted by 2020 in the Marlborough region. That adds up to more than Hawke’s Bay and Central Otago combined, so it is a phenomenal vote of confidence in that industry.

If we go further south to the Hurunui water project, the Hawarden-Waikari area, which is the main command area for the Hurunui water project—some fantastic soils there. Anyone who is a cricket fan will have heard of Waikari pitches—the soil for a Waikari cricket pitch comes from Waikari, around the Hawarden area, and that is in the Hurunui water project command area.

Fantastic soils, but that is a very dry area. It is drier now than it has been in the last couple of years. It has been 2 years of drought, and it is really getting worse as every day goes by. That area just wants an irrigation scheme. Thank you, Mr Chair.