Keith Woodford says messy water laws impede efficient use of our key resource. It is a resource that has the potential to make us "an extremely wealthy society"

Keith Woodford says messy water laws impede efficient use of our key resource. It is a resource that has the potential to make us "an extremely wealthy society"

By Keith Woodford*

Current controversies about exporting water, be that in bottles or in bulk tankers, draw attention to New Zealand’s key resource. Yes, that resource is indeed water. In a world that is chronically short of water, we in New Zealand are greatly blessed.

It is because we are so blessed that until recently we have taken the presence of water for granted. Essentially it has been a free resource.  As a consequence, water law in New Zealand is real messy. And that leads to major impediments to water being used efficiently, and in ways which the different groups in society can agree on as being ‘fair’. 

Water that falls as rain on private land has de facto use rights. But once that water runs off into a stream, or permeates below the level where plants can extract it, then it belongs to the Crown – in effect the people of New Zealand. 

Throughout our farming history, the right to abstract water for irrigation has been on a first-in first-served basis, more recently legitimised by formal water abstraction consents. These consents are typically for periods of about 35 years. Throughout the 20th century, obtaining a water right and subsequent renewal thereof was almost automatic. 

It is only in the last 15 years that there was been widespread recognition that water use rights have been over-allocated in some parts of New Zealand, particularly the Canterbury Plains. Submersible-pump technology now allows water to be lifted from depths of 200 metres and beyond. Those aquifers do recharge via the porous braided rivers draining from the mountains, but abstraction rates have gone well beyond these renewable volumes to create non-sustainable water mining. 

It is this recognition of non-sustainability that has led to the current development of big storage facilities such as extensions to Lake Coleridge in Mid Canterbury and large down-country storage south of the Rangitata. In the South Island, the rivers peak in early and mid-spring when the mountain snow melts, but the peak irrigation demand is not until late spring and summer.  Hence, the role of storage.

The cost of water for irrigation includes the costs of storage and the costs of distribution, but not a cost for the water itself. The water itself is a non-priced resource. Nevertheless, the cost of irrigation is very substantial.

In Canterbury, the newer irrigation schemes typically have annual charges to farmers of about $800 per hectare. This includes the cost of servicing the capital to build the off-farm facilities.  Even where existing pumping costs from aquifers are less than this, such as Stage 1 of the Central Plains scheme, most farmers have been willing to invest in the new storage schemes. This is because they provide a secure long-term source of water for which the ongoing cost has effectively been fixed in nominal terms; i.e. the debt-servicing cost will go down in real inflation-adjusted terms over time.

The economics of irrigation schemes are always controversial in advance. I recall one Mid Canterbury farm consultant saying to me several years ago that he had never seen a scheme that seemed cheap at the time of investment, but that they had all been worthwhile in retrospect. In part, that has been because the investing farmers figured out better ways to use the water than the economists had assumed in advance.

Those debates about economics are going to continue over the coming years in relation to future schemes. My own perspective is that, without more irrigation along the east coasts of both the South and North island, we are going to be constrained in terms of the increased wealth that we can draw from our land. And with an economy that depends on agri-food exports, and the need to spread that wealth across a population that is rapidly increasing, driven by immigration, then we need to do some hard thinking.

That does not mean that we should ignore the environment. Indeed, environmental issues have to be paramount. But the beauty of irrigation is that it does give us a lot of control over nature, and the capacity to manage nutrient issues within a managed system. 

Late last year I was invited to a workshop which posed the question: ‘what would our agriculture look like if we had been colonised from Asia?’ That ‘source of colonisation’ question stirred some good debate about the impact of our cultural heritage, both in relation to farming systems and market perspectives. Arising from that, I am now part of the steering committee for a ‘future foods’ project.

Only time will tell where that project leads, but an underlying driver is that irrigation is expensive and struggles to be economic when used to produce commodities. It needs to be used for value-add activities. Along with this, if properly managed, it creates capacity to manage nutrient flows. It also allows us to build soil carbon levels and soil fertility, which are themselves environmental benefits.

Whether or not our ‘future foods’ project will address the issue of water itself as a consumer product I do not know. It may be outside our remit. But it is certainly something that I often think about.

When I travel overseas, one of the most important issues for me is obtaining quality drinking water. Even for cleaning my teeth, I prefer the bottled stuff to what comes out of the tap. And so I pay whatever the vendor asks, as long as it is an established brand, preferably imported from a developed country.

Even here in New Zealand, bottled water sells for at least $1.20 per litre and often up to $5 per litre. The premium brands, even when locally sourced, are more than the price of milk.

By my calculations, milk produced on an irrigated farm requires about 330 litres of irrigation water per litre of milk (or about 5 million litres per hectare to produce about 15,000 litres of milk).  Rainfall is additional. One can argue over the fine details but the big picture is irrefutable. The potential export returns from bottled water relative to milk from a  given quantity of irrigation water, are huge.

If we sold one litre of water per day to 10% of the Chinese population at an export value of $1 per litre, then we would be an extremely wealthy society. The annual export income returns would be $55 billion per year.  The amount of water required (55 billion litres) is trivial – about 1% of the water we use on irrigated agriculture.

The problem in New Zealand is that we do not have the institutional systems in place to capture these benefits, and to share those benefits across the people of New Zealand as the fundamental owners of that resource. Instead, we get into debates about whether individual groups are exploiting our fundamental birth-rights.

If I could wave a magic want to move things forward, it would be a legislative system where the Government could sell pristine drinking water at a good healthy price from designated sources on behalf of all New Zealanders. Private firms could tender for the abstraction right, with the minimum price set by Government. I would legislate that all such water could only be exported from New Zealand in consumer-ready form – none of this export in bulk tankers, as one group is currently proposing.

I have no specific view on the best source thereof, but pumping from deep water aquifers at say 200 metres has lots of appeal. The soil that the water has passed through on its journey to ‘deep down under’ acts as a marvellous filter of any bugs, and the water is even more pristine than from mountain streams. Why can it not happen?


*Keith Woodford is an independent consultant who holds honorary positions as Professor of Agri-Food Systems at Lincoln University and Senior Research Fellow at the Contemporary China Research Centre at Victoria University.  His articles are archived at http://keithwoodford.wordpress.com

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60 Comments

We would need to be a whole lot more collaborative and also clear about the benefits we want NZ Inc to accrue through the enterprise. It could also be applied to Tourism and Immigration...... gets one thinking. It is already in place for the Super Fund, ACC etc.

One reason this is a third-rail political issue is, of course, iwi presumptive rights to clip the ticket once the resource is monetised. An adult conversation is required, but by definition this excludes anyone in an elected or politically appointed position.

So here we stand, letting 95%+ of the best water in the world flow unimpeded out to sea, for want of an overarching view of our economic future.

Sure if we can collect it at its source, but once it reaches the sea through our river system I don think you can call it the "best water in the world" .

...."letting" 95% flow unimpeded. Are you suggesting that is a waste? Educate yourelf about what the farming corporates are stealing off the public..and the damage it will do. .

"In reality there is no such thing as 'wasted water'. The natural full flows are what shaped the river valleys, the morphology of the rivers and streams, and everything about them, including the life in them. The rivers and lakes evolved together with their biology over millenniums with full natural flows. Every drop taken has an effect and the other unmentioned impact is that the water that is taken makes its way back into waterways in a much poorer state"

http://www.stuff.co.nz/environment/88264980/mike-joy-agency-capture-shif...

"Unimpeded" is not "wasted".

Many rivers (West Coast of South Island) are short, steeply graded, are subject to very high differentials between mean and peak flows, and have (because of that short path) little in the way of point source contamination.

The large East Coast braided South Island rivers also have flood peaks 10+ times mean flows: a glance at the gauges will confirm. Waimak: http://previous.ecan.govt.nz/services/online-services/monitoring/river-f... peak is 1200, average in the 100's. Rakaia: http://previous.ecan.govt.nz/services/online-services/monitoring/river-f... peak is 1832, average in the 200's. Use a one-year Y-axis to capture the real variability.

Harvesting flood flows is what most of the East Coast SI debate is about.

And your comment applies to every human activity - everything affects everything else. The question is how much, and at what end. After all, "makes its way back into waterways in a much poorer state" applies to villages, towns and cities: try drinking from a stormwater outlet.

And I notice, with amusement, that the main point of my original comment - the thorny question of iwi rights over water, has been met with crickets......

Yes it seems the iwi ownership issue is being kicked down the road. But its not just iwi. The more water taken from a river/acquafer/lake, the less available. So how to decide who gets it? Mighty River Power, dairy, horticulture, anglers, rafters or the overseas bottling co? Seems it might needs a $ value to ration it.

It's 6 years since David Sakur's Hard Talk John Key interview about 100% Pure Clean Green

The waters of New Zealand have not improved in the intervening period

Nothing has been done - They must be going to fix themselves - magic

By all means state that in your opinion not enough has been done, but to state that nothing has been done, which is just not true, simply shows that you have made no effort to find out any facts at all.

So the laws on water are 'messy'. A tidy up will always help, but maybe it's a very complex thing, with lots of factors and conflicting objectives. Complexity will still be required.

".........And with an economy that depends on agri-food exports, and the need to spread that wealth across a population that is rapidly increasing, driven by immigration, then we need to do some hard thinking........"

Clearly then the immigrants are not generating enough income to support themselves and the relatively few real wealth producers (farms and tourism) are having to support even more residents. Yet another cost to our nation from all the immigration. Polluted waterways (and a lot of other costs also)

Spot on Chris.
Michael Riddell (general link: https://croakingcassandra.com/) has crunched the numbers on our immigration, looks like the net result of this immigration boom is a net no gain to our per person income and a dilution of our wealth. The (unwitting?) admission from Mr. Woodford you mention (along with huge compromises to our environment, culture and independance) confirms what many of us suspect; excessive immigration has been a big mistake. Perhaps more dairying in marginal climates, more plundering of our precious marine life more waste and destruction to feed a growing population we neither need nor want would be a good idea as well.
Pouring millions of low skilled immigrants into our cities was supposed to improve our country how exactly?

some of the best water in our part of the world used to come out of a spring down the road from us,there is now a huge windowless shed there with a machine that makes the plastic bottles and fills them.there is no signage to indicate who owns it.the plant was installed by chinese workers 5 years ago.

We are mad.

1 litre per day at $1 per litre to 10% of Chinese population... Dude what have you been on... Are the Chinese, as a whole, made of gold nowadays? Try Saudis or the UAE see if you can achieve that rate.

exactly what i was thinking. Keith appears completely oblivious to where "wealth" in the system comes from ... ie energy surplus. If you aint got energy surplus, you sure as hell wont be freighting heavy water across the world for starters ...
The Chinese are out of it and consuming debt, the Saudis are burning through their US reserve (energy tokens) to keep a bloated population fed and watered ... and new energy fields are nowhere to be seen.
Pretty soon the world will struggle to feed 1 billion, let alone 10.

This headline irritates me ....Keith Woodford says messy water laws impede efficient use of our key resource. It is a resource that has the potential to make us "an extremely wealthy society"

What is wealth? NZ is (was) wealthy and could have continued to be with a low population and unspoilt landscapes with high price tourism and high brand value enviro products. But it seems some can't see real wealth when it is already right in front of them.... swapping the image for dead rivers and polluted lakes.

very true. Wealth could be defined as (energy) resources per capita ... so in that respect we are rapidly getting poorer

Yes, the wealth IS the water. We shouldn't be selling it, and we should definitely clean up our act how we use it currently, and how we allow big agri to use it.
.

To me, real wealth is being able to catch a wild trout in a pristine, unconstrained river. Is concreting over everything the path to real wealth? Water belongs to us all, not just agro-industrialists.

Pedantic I know but by definition your river is not going to be pristine with that imported trout in it.

big move away from sheep to intensive beef and dairy operations, sheep are very low polluters.
Now we have a lot of debt associated with those intensive operations, if you know of an easy fix I would love to hear it.
http://nzdotstat.stats.govt.nz/wbos/Index.aspx?DataSetCode=TABLECODE7423

Important acknowledgement

quote .... "the need to spread that wealth across a rapidly increasing population that is driven by immigration, then we need to do some hard thinking".

By inference, we better start water-mining to obtain the $55 billion wind-fall in order to sustain the immigration inflow

that ' wealth' has already been committed to interest and debt repayment

What is the plan here, is it more plastic bottles? If so, forget it till you come up with a better way for this. The world is plastic-ed out.

Bottled water now? What happened to China's insatiable desire for New Zealand dairy products? That was the last get-rich-for-sure scheme.

But maybe it's merely a variation on the old theme. Bottled water shares one characteristic with our approach to intensive and expanded dairying - its immense and totally unfactored environmental costs. Does this ever feature in any of these grandiose national schemes?

In a minute of looking I find it takes three times the water to make the bottle than it does to fill it. The plastic, the transport, etc, is dependent on millions of gallons of oil. Around 80% of these bottles in the US (but of course China will be much better) end up in landfill. About 10% of plastic manufactured worldwide ends up in the ocean. PET bottles don't biodegrade - they photodegrade into fragments. This sounds like just the thing New Zealand should be getting into. Who needs a decent national environmental reputation?

Finally, if we're really concerned about providing people in other countries with safe water, there are other ways to go about this. Ways that really do the world - and our consciences - some good.

Who'd have thunk it, yet another valuable irreplaceable resource thrown away for nothing.

'Irreplaceable'?

It's replaced every time it rains, shurely? WATERCYCLE101.

Tell that to California. If you're taking it out of the aquifers faster than it can be replaced. it doesn't quite work out that neatly.

Not quite.
Indonesia/jakarta is sinking because they're pumping out too much water, too quickly.

Waymad,

You are not even close. Go and do some research on what is happening to aquifers like the Ogallala in the US,where it is being depleted far faster than nature can replace it. It's not hard to see why;more people,more agriculture,greater water use.
Look at the almond industry in California. Almonds require huge amounts of water and the industry didn't exist there until recently and that's before you factor in a long-term drought. For moreinformation,I can recommend Elixir, A Human History of Water by Brian Fagan.

Nope.
"using readings generated by NASA's twin GRACE satellites. GRACE measures dips and bumps in Earth's gravity, which are affected by the mass of water. In the first paper, researchers found that 13 of the planet's 37 largest aquifers studied between 2003 and 2013 were being depleted while receiving little to no recharge.."

Imagine the civil unrest as this unfolds? The depleting acquafiers and the retreating glaciers (feeding the rivers) supply the major world food bowls.

Water cycle 102 is looking interesting. "Earth’s mantle may contain many oceans’ worth of water – with the deepest 1000 kilometres down.

“If it wasn’t down there, we would all be submerged,” says Steve Jacobsen at Northwestern University in Evanston, Illinois, whose team made the discovery. “This implies a bigger reservoir of water on the planet than previously thought.”

“This is the deepest evidence for water recycling on the planet,” he says. “The big take-home message is that the water cycle on Earth is bigger than we ever thought, extending into the deep mantle.”

The article, chaps and chapesses, in case you missed the context, was about NZ, NZ water, and my comments were confined to South Island rivers which differ in core respects to that other islands'..

It's a neat debating trick to go and compared short, fast, steeply graded rivers like the Rakaia and Waimak, to vast continental confined aquifers like the Great Artesian Basin in Queensland.

And I just introduced another by referring to another non-comparable aquifer that y'all didn't.

But none of this debating sophistry (opinions on That may vary) affects the core point: we are not talking about tapping aquifers, we are discussing surface water of (primarily) South Island rivers.

Which, as I have outlined in other comments, have simply massive peak-to-average flow ratios, which provides at least part if not most of the opportunity Keith Woodford is talking about. At flood peaks, checkable from the gauges thoughfully provided by regional governments, north of 90% of those surface flows goes straight to sea.

Free water was always going to get abused eventually. The problem is that no one wants to go near the water ownership nightmare with iwi. Tradeable water rights should have been standard years ago.
So now we need to de stock on some marginal country but who will go first, will the market do it or will it require regulation and what about all those vested interests on the other side of the fence?

Didn't the farmers 'own' the water rights on the farms 'we' sold them 50 to 100+ years ago?

Crops can feed the world and have heaps of protein, especially legumes such as Lupins......they can be stored and exported. NZ could replace dairy cows with growing legume crops

If we’re genuinely talking about ‘future foods’, future business opportunities, then we genuinely need to consider the future.

For the future isn’t going to look like the past. Future-focused business will no longer be a matter of reaching out into our environment and grabbing, exploiting, extracting, using up, whatever we can find there. Or, if we are to take from our environment, there must be strategies to re-balance, repair, restore, replenish, or recycle back into the environment – of which we are both custodians and dependent on its well-being.

The plundering of aquifers is one thing. And it's plain from experience in Canterbury, Hawkes Bay and perhaps elsewhere that these aren't well understood. But there are other, critical questions.

What would be the carbon footprint of this bottled water spree? Has this been considered? If it has, how would the business address its carbon impacts? What would be the effects on New Zealand’s adherence to global climate accords? Or are these just problems to avoid, to hand on, to ignore?

The world is fast approaching pivots of no return. We can choose to hasten these pivots. Or we can choose to consider what kind of future environment, future world, future opportunities, we hand on to the next generation. That is future thinking. And this is what we need, not continuation of 20th century laziness, irresponsibility and indifference.

Way too late for future thinking im afraid. The reality is that fossil fuels have allowed the human population to extend past overshoot & lift standards of living to Kings of old. The only pivot of return from here is collapse - All our consumption relies on non sustainable extraction in some form ... and no one will willingly choose to massively decrease what we consider now "normal" (ie independent travel, travel beyond 10km, an electrical grid, food that appears magically at a supermarket, supply chains, healthcare, energy intensive cities & infrastructure..). The reality is these were never normal standards of living and wont be in the future.
The choice now is which we collapse first .. the environment or the economy. And collapsing the economy is always going to be a hard sell ...

.... To give some sort of idea about what we consider normal, I've read somewhere that the average person today "consumes" as much energy in a month as their great grandparents did in their lifetime.

Powerful points, ham n eggs. It's a way of life that we expect the future to pay for. We have an economy, as it's called, expecting extraordinary privilege - one that should make us, as it's asserted above, 'an extremely wealthy society'.

It's an economy afloat on debt, passing its mounting costs ever onwards to the young, and outwards onto the balance sheet of the good old earth. With neither is there any agreement to pay.

Absolutely - there can be no repaying. Simply put - the (easy) energy is not there to do so - it was nice while it lasted... We are stuck with adding debt at a staggering pace just to keep (more difficult) energy up to the machine ... but this cant last

What the article doesn't address is that use of the water leads to industrial pollution of waterways in New Zealand by the dairy industry (amongst others). More water = more dairy pollution now polluting said water. Also dairy puts out a large amount of methane increasing carbon emissions, another form of pollution.
Hardly fair or sustainable. Can anyone suggest a better system?

So what happens when said dairy polluters finish fencing off all waterways and we still have a water pollution problem, then who do we blame next?

Don't forget the urbanites. "Water quality state in the pastoral class was not statistically different from that of the urban class, and water quality state in the plantation forest class was not statistically different from that of the native forest class."
http://www.tandfonline.com/doi/abs/10.1080/00288330.2004.9517243?src=recsys

"Ten-year trends (2004–2013) indicated recent improvements in ammoniacal nitrogen, dissolved reactive phosphorus and total phosphorus in the pastoral and urban classes, possibly reflecting improved land management."

http://www.tandfonline.com/doi/full/10.1080/00288330.2016.1150309

We don't want to know sorry - we prefer to blame farmers - especially dairy farmers

if a million for a house is acceptable maybe a couple of thousand for a water tank,pump and filters would be an advantage and add to the value.even if you just use it for the washing machine and garden hose.get the tank delivered and do the rest yourself,you can get a domestic water pump etc; from bunnings or mitre10.

Dairy is by far the largest polluter of NZ waterways. It is not comparable to cities or forestry...perhaps sedimentation but not nitrates and sh1t. Ruataniwha dam was stopped as the additional dairy intensification it would lead to would unacceptable nitrate levels which were already at max levels.
A large amount of damage has already been done to NZ waterways, lakes and ecosystems. But we can't turn the clock back and fix it. The farmers have had a free license to pollute because of the lack of regulation, some made an effort not to and e.g. fenced waterways which had some benefit and should be non negotiable as a first step.
We need regulation, standards and to make polluters (farming or industrial/forestry/ residential/whoever) conform to a sustainable, improving over time water standards at the polluters cost and with some state assistance...should be achievable within 10 years? But not under a national government and the current status quo.

Ruataniwha dam will happen - the current majority HBRC Councillors may stop it for three years if the Government doesn't intervene, so hard to say time frames.

Too much has been invested so far, and the CHBDC are desperate for it for various reasons.

There are signed agreements in place so it's not if but when.

I'm not against steps to mitigate all pollution of waterways, and all farm owners I know don't want to pollute their own back yard anyway.

You talk about "we can't turn the clock back and fix it", but have a look at the rivers in HB at the moment - something needs to be attempted surely. I hear the Tuki tuki is almost not 'wadeable' any time of the year....

The facts are, unless we have ten more Rod Drury's, and a few more Peter Jackson's, double our tourism (what would that look like?)..., we need all agriculture - the question is, as a nation, what are we all going to do to help improve our waterways over time?

Leaving water in our waterways is one prime way to help them.

the Ruataniwha dam had issues with flow data in the catchment. Without being able to rely on snow falls to increase spring flows the catchment simply wasn't getting enough rain. Then the costs were frightening and everything was inflation indexed. This season the dam would have run dry just when you really needed the water.

30 years ago we didn't have these water problems so they must be caused by intensification of a few large scale operation which may get wound back but in the process it costs us all. Fencing creeks won't solve the issue but makes it look like the council is doing something.

Hear, hear.
.
The Ruataniwha dam is a extremely bad idea.

Yes, we need to grow more food.
But we shouldn't only focus on irrigation, we should also focus on new ways of farming and looking after the land.
The current large scale method of relying on herbicides and pesticides and 'free water' is not sustainable.
Change is required.

Its not as simple as blaming farmers / dairy. The problem is PEOPLE and share numbers consuming stuff....
ie Urbanites here consume and effectively outsource their pollution in various forms (a huge proportion to China) ... and in return our dairy farmers pollute our waterways to provide product to China ...
A generalisation but it gives the idea ...
Most of the townies view points comes down to wanting their lattes and lifestyles and no pollution in their backyard... with no appreciation of what their lifestyle is dependent on, especially the burning of fossil fuels ...

It is perfectly possible to 'turn the clock back'.

Read a little history, folks: I'd suggest Peter Ackroyd's 'Thames - Sacred River' https://www.amazon.com/Thames-Sacred-River-Ackroyd-2007-09-06/dp/B01N0DFV5I

The Thames (and it's feeders like the Fleet, Wandle, Westbourne etc) were open sewers for the thick end of a millennium. The recovery is academically documented here: https://dge.carnegiescience.edu/SCOPE/SCOPE_22/SCOPE_22_2.2_Andrews_195-...

Now home to salmon., trout and the occasional dolphin. And that's the Beeb saying this: hardly fake news...http://www.bbc.com/news/science-environment-33996020

So enough with the histrionics, It is feasible to recover from the current state (which at its worst in NZ terms is most likely far less gone than was the Thames - which had been declared 'biologically extinct' just 50 years ago). Efforts in this precise direction are being made, and the Zone Committees of Ecan, which bring together iwi, farmers, irrigaters, fisherfolk, hunters and ordinary citoyen, are leading the charge. https://ecan.govt.nz/your-region/your-environment/water/whats-happening-...

Education complete, common taters.

Now home to salmon., trout and the occasional dolphin. And that's the Beeb saying this: hardly fake news...http://www.bbc.com/news/science-environment-33996020

Interesting you felt compelled to qualify the veracity of BBC news. Is it still an independent organ of record or a state owned propaganda unit?

I would equally feel more comfortable with ECAN and the veracity of it's actions once democratic control is re-established without question.

Given that the Thames (last time I checked) runs past the eyes of perhaps 5 million Londoners, I think the BBC would have been called out on this item if it were wildly astray. The political reporting apparatchiks at the Beeb - a lottery.

The Zone Committees of Ecan are in fact grass-roots democracy at work: organised by the redoubtable Dame Bazley during her time there. The 'democratic' ECAN before the appointed Council, was exactly evenly split rural-urban, with a 20-year perfect stasis the result. No water plan, FIFO extraction consents. and a baleful legacy of environmental inaction.

The appointed Commissioners and the formidable Dame changed all that within a couple of years.

Nice party line ... but this is simply a case of pollution shifted elsewhere. All those humans need stuff and food and energy and produce waste which goes somewhere - just now no longer straight into the Thames.
Do you really think we could theoretically bring back all our "required" manufacturing from China without harming the environment here further? As for relying on Ecan zone committees...

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