Money from Future Investment Fund ready to flow to irrigation projects to support big rural output targets

Money from Future Investment Fund ready to flow to irrigation projects to support big rural output targets

Content supplied in media release

Primary Industries Minister Nathan Guy has announced today that Crown Irrigation Investments Limited is now established and ready to work with backers of new irrigation schemes.

“The company will act as a bridging investor for regional water infrastructure projects, helping kick-start projects that would not otherwise get off the ground. The Government has set aside $80 million in Budget 2013 for this purpose,” says Mr Guy.

All members of the establishment board have been appointed to the new Board of Crown Irrigation Investments Limited.

The Board will be chaired by Alison Paterson, with members Don Huse (Deputy Chair), Debbie Birch, Lindsay Crossen, Chris Kelly, Graeme Sutton, and Michael Webb.

“Crown Irrigation will invest where it is considered necessary to get a project underway. It will be a minority and targeted investor."

“This is another important step towards unlocking the massive opportunities that water storage and irrigation can create for New Zealand."

“There is potential for another 420,000 hectares of irrigated land to be available for a variety of uses over time. Research from NZIER suggests exports could be boosted by $4 billion a year by 2026, which would support thousands of new jobs."

“More consistent river flows in summer will also have real benefits for the environment, with improved habitats for fish and birdlife."

“After the extreme drought that most of the country suffered earlier this year, the need for better water storage is obvious,” says Mr Guy.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

22 Comments

Comment Filter

Highlight new comments in the last hr(s).

Picking losers. And it'll go the same way as Crown Fibre Holdings Limited;
 
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10725868
 
"You can keep adding costs, but at some point someone has to pay for the investment... Telecom chief executive Paul Reynolds echoed this sentiment last month, saying the industry had gone from the "darling to the dogs" of the technology world."

With the meatworks freezers full of meat and them now having to limit kill, just what we need is even more meat.
 Something has gone horribly wrong, just don't know what yet.

It is simple. Demand is dying - certainly for high cost product with cheaper alternatives.

CR What are the local N levels before/after in the HB scheme plans?
 
http://www.beeflambnz.com/Documents/Farm/The%20science%20needs%20of%20a%...
& c the youtube...

Is a cap on stock urine, essentially a cap on stockingrate/production

A production cap is an income cap underexisting commodity regimes

To remove 20% of manageable N we have covenanted 35,000ha for 999 years

 

To add to your comments, round layers of cost.....

Cost of water (capex and opex), cap on N, and production prices in relatiev terms \/ \/ \/.

 

We don't see export markets dealing in bulk paying up for NZ waterways....

Where is the room for new debt, and how are existing equity values holding...

 

 

Sorry Henry, but I am struggling to grasp the context behind your question.
 
Your beef and lamb link I have trouble accepting as coherent.

On the assumption that the HB scheme goes ahead, has the assumed wave of conversions to dairy acounted for any cap on N leaching.... i.e. does a N Cap cut across assumed production levels....
 
see if this page helps, second video/power point down.
http://beeflambnz.com/news-events/News/2013/june/multimedia-farmer-scien...
 

Thanks Henry.
 
I like the imagery - a full length truck and trailor unit needed to carry the deadweight of Beef and Lamb.
 
In terms of Ruataniwha (HB is intended to have more than one scheme) the farm economic modelling underlying the project assumes no N limits. The modelling also assumes unrealistic levels of dry matter production (but only with irrigation).
 
The Regional Council is in the process of raising nutrient limits for surface flows by 2-3 times to accommodate the increased nutrient leaching.
 
Existing nutrient levels for both ground and surface water in the Tukituki catchment are I believe at times already excessive - dogs dying from cyanobacteria etc. But hey, if you can argue that it is only periphyton growth that matters, and that can be controlled by limiting Phosphate, then Nitrate levels don't matter.

To remove 20% of manageable N we have covenanted 35,000ha for 999 years This land was covenanted via a $81m government 'compensation payment, according to Mike Barton at SIDE.  This payment was made because the govt were the ones who had developed the land for farming - and then balloted them in the 80's.  As only one generation of farmers had got to farm the land the govt accepted? some responsibility and paid the compensation.  The covenanted land is now covered in plantation forest, which the local Trust owns.  This Trust was formed for this purpose.
 
Henry, are you involved in farming in Otago?  ORC caps were frequently mentioned at SIDE as being the equivalent of 'being plucked out of the air' - not based on any science.  Consequently it was said they will prove to be impossible to meet and the expectation seemed to be that they will in time be changed to something more workable.
The Hurunui rules also seemed to considered unworkable for farming to be continued long term.
 
The elephant in the room for dairy IMO is not local N caps or even peak oil, it is the demands of the ingredients buyers, like Unilever setting requirements that have to meet if you want to sell them product.  This is taken from Unilever's Supplier Code:
Unilever's direct suppliers will take responsibility to require adherence to the principles of this Supplier Code from their direct suppliers and exercise diligence in verifying that these principles are being adhered to in their supply chains.
http://www.unilever.com/aboutus/purposeandprinciples/supplier-code/
 

This mornings herald seems the start of a PR plan round Fonterra's plan, as noted earlier we'd thought the weight for production would keep life going.
http://www.nzherald.co.nz/trade/news/article.cfm?c_id=96&objectid=10894266
"Because the multi-council approach is going to kill us and it's going to kill growth because you have different debates all over the country and you need national ownership here."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1089...
http://www.nzherald.co.nz/agriculture/news/article.cfm?c_id=16&objectid=...
as we say issues management
Agree about the supplier codes we have seen Marks and Spencer operatives at such work 20 odd years ago. However those types stll keep an e eye on cost. And use best practise and lowest cost as a criteria for all.
We are Cantab T&T.
 

Henry, I hope the NZ dairy industry has more going for it than your three links suggest.
 
Regards Barnett and his $1 billion in formula exports and/or $70 per can/Kg:
 
Can anyone point me to export stats supporting his assertion? I have looked, and can find about $150 million over the last 12 months. At about $19 per Kg. Mostly to Hongkong, much less to China and then at around $14 per Kg.
 
It appears NZ has very little export impact with formula beyond Hongkong, China, Taiwan, Australia and Pacific Islands.
 
Formula export values for the last 12 months are though up 5-6 times over those for the prior 12 months.

Andrew please explain the limiting kill bit, I was under the impression everything was ticketyboo.

Hi Belle
  I was too but talked to some friends in the 'industry' today and they were telling me that freezers are full again,thankfully the kill is low ,but still looking at restrictions. Love confirmation from others.
 The sheep meat industry must have collapsed, I don't have any other explanation for whats going on. I dont know what the situation with beef is, or if its included.
 Sheep meat is now dependent on China and they don't eat leg roasts, french rack etc, so Im thinking they will buy but only if the price is right ,which looks to be around the $4 a kg fob, so not much joy for farmers there. 

Hmm ok. Somewhere I saw a prediction of $100 a lamb for this christmas, so hopefully this meat will clear and things will pick up.  Interesting note. Been hearing some stuff about Landcorp and their Wairakei Pastoral business over Taupo way. Where they are converting the pumice to dairy still. I hear they overspent on new hiluxes and a million dollar toilet block. Now they cant stick to their tenders for fencing and trenching and the like. They have gone back to their contractors and demanded they lower their prices. This is despite having gone through the tender process and awarded those tenders. Some pretty angry contractors. I understand the whole Wairakei Pastoral thing is a shimozzle. Taxpayer money down the tube.

I see one Chris Kelly is a director of  Crown Irrigation Investments Limited.

Wasnt Wairakei Pastoral suspiciously in like flynn when the water rights for the Waikato came up? Yet all the long time farmers in the district missed out... Funny how all the same names keep cropping up.

the water looked like an inside job, someone gave them the inside running.

Another funny thing I heard. Fonterra were heading out to Taharua block Taupo (I think that was the one). To check out the newly fenced off streams and waterways. To give Landcorp an award for fencing off the streams and waterways. Meanwhile down Benneydale, the newly fenced off waterways on another Chinese/landcorp block were currently being grazed off by a substantial herd of cows. They were behind hot wires and forced into the waterways. Ah the hypocrisy.  

Unfortunately Belle, I suspect David's policy on comments limits this discussion from progressing its natural course.
 
It is probably still O.K. to say I agree with you.

While Landcorp aka our govt continues to exist and be in competition to us farmers I will gleefully point out their shortcomings. If I end up edited at least I gave it a go. But Landcorp is unlikely to bother Interest. They will suck it up and carry on, cos nothing can stop them. They have it made. The big salaries, and no responsibility. All the power.

Whoops Colin, I just reread your comment. You are concerned 'you' may run foul of management.  I was too busy watching Prime, The Quick and The Dead. Classic Western... Russell Crowe, Leonardo, Sharon Stone, and a few others that names dont come to mind.

If I had started looking a little more deeply into the 'connections' and 'appointments' through NZ agriculture and beyond I don't think it would have taken long before I ran foul of management's 'rules'.

“Crown Irrigation will invest where it is considered necessary to get a project underway. It will be a minority and targeted investor."
 
Is this a slush fund to to implement projects that government wants to proceed but would not on their merits otherwise?
 
Where is Treasury overview of the crown's expenditure?
 
Do directors still have responsibilities under the Companies Act, or are they to be quietly ignored?

Your access to our unique content is free - always has been. But ad revenues are diving so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.