Q: What is the per unit cost of water expected to be under the proposed scheme and how does this compare with water schemes elsewhere?
A: Irrigation New Zealand has run the Waimea Community Dam’s proposed capital (share) and operational costs through the spreadsheet it uses to calculate the cost of irrigation scheme water supply to farm gate survey – this is done on a biennial basis. The report (that contains the assumptions used to normalise the data) is on the INZ website, click here to view the report. The Waimea Community Dam Scheme comes out at 26 cents cost per m3 which is at the upper end of the schemes surveyed – however it is comparable with other modern irrigation schemes like North Otago Irrigation Company (same price) and Barrhill Chertsey Irrigation and the Opuha Dam Kakahu scheme (3 cents more). It is cheaper than the Southern Valley Scheme in Marlborough on a per cubic metre basis – this is an important comparison given the high value production associated with the dam.
Q: How much are the shares?
A: The expected price for each share is $5500 at the time of the initial offer. This is a one-off cost per share that does not have to be paid every year. However, each share will also incur an annual water charge. Current modelling suggests that the annual water charge in the first year of operations will be around $550-$600 per share. Shareholders will also be required to pay an annual operating charge per share over the Dam construction period, to support WIL’s operating costs during that time.
Q: How much water does one share entitle me to?
A: Each share will convert to an equivalent of 30mm of water per hectare per week. However, the Tasman Resource Management Plan may restrict the volume of water that can be applied to less than this amount on the basis of crop and soil type.
Q: What if I’m on light soils that need more than 30mm per hectare per week?
A: You can take up more shares than your total irrigable area. As an example, for 10 hectares at 35 mm per hectare per week, you might wish to purchase 12 shares to enable you to access the full amount of water you need.
Q: How much is 30 mm/ hectare/ week as a volume?
A: 300 cubic metres per week
Q: I grow grapes and they don’t need much, if any, water. How many shares should I buy?
A: Analysis of water meter data for a number of grape blocks on the Waimea Plains shows that water usage varies between 22 – 75% of a block’s total water allocation. The analysis also shows that water use in the same block can vary considerably from one season to another – presumably this is a reflection of the season itself (i.e. how dry it is) and other vineyard management practices (such as watering newly planted vines). Grape growers need to ensure they have adequate security of supply for all scenarios.
Q: When will I need to pay some money?
A: You won’t pay anything until Waimea Irrigators Limited issues a Product Disclosure Statement (PDS) and you formally commit to the purchase of Shares. The PDS is anticipated to be open in February 2018. Money is likely to be requested in three tranches. At this stage its anticipated that the first call for money will be with the return of the PDS. We will provide more information on the timing of the PDS release in our regular newsletter.
Q: Why don’t I just buy the shares later?
A: The expected capital price of the shares at the time of the initial offering (i.e. when the PDS is released) is $5500 per share. After the initial offering the capital price is highly likely to increase. More details on this will be provided in the PDS.
Q: Why did I get sent the survey? I only have a couple of hectares. Isn’t this just for large irrigators?
A: We sent the survey to every property over one hectare in the Waimea Community Dam scheme area. Redwood Valley residents were also sent the survey because the Redwood water scheme draws water from the Waimea Community Dam scheme area. Shares are on offer to everyone in the Scheme area, not just the large irrigators. This is because the new rationing steps outlined in the Tasman Resource Management Plan, which will come into effect in 2018-19, will affect everyone who does not affiliate their water consent – regardless of property size or the amount of water used.
Q: Can I access an unaffiliated volume of water and an affiliated volume of water from the same bore?
A: No. Policy 30.2.3.12 E of the Tasman Resource Management Plan states “…the Council will require that only one permit subject to the relevant affiliated or unaffiliated allocation limit is consented for any one point of take and monitored through one water meter”.
In other words, your consent will have a total weekly volume (in cubic metres) on it that will reflect either your bone fide allocation volume (if you have chosen not to affiliate your consent) or the number of shares you have purchased multiplied by 300 m3.
Q: I’m a member of a water scheme already. Does this affect me?
A: It certainly does. Think of it this way - the scheme you are a member of (e.g. Waimea East, Redwood Valley) provides the infrastructure to get the water to your property, and manages the water permit on your behalf. Purchasing shares in Waimea Irrigators Limited will provide the security of supply; to ensure you can access the volume of water your shares entitle you to, when you need it. If you don’t purchase shares you will be subject to the same rationing steps that are applicable to an unaffiliated permit holder.
Q: Why are irrigators paying for all of this? What about the rest of the community?
A: The proposed funding model for the dam is that irrigators will pick up $40m of the cost, with a contribution of $25m from Tasman District Council to cover urban users and environmental flows, and a contribution of $5m from Nelson City Council. An application for $7m, made to the Ministry for the Environment for grant funding through the Freshwater Improvement Fund, has been successful.
Q: Won’t more irrigation just cause more nitrate-nitrogen leaching?
A: Nitrate-nitrogen leaching is more sensitive to soil type than to whether a crop is irrigated or not (Fenemor et al, 2015). Therefore, there is little difference in leaching rates for the ‘no rationing’ vs ‘with rationing’ scenarios. For some irrigated crops, leaching is lower than for the dryland equivalent because of the efficiency of plant nutrient uptake in a fully watered situation. Leaching rates from highest to lowest are dairy, outdoor vegetables, grapes then apples.
Nutrient losses from livestock farms and horticultural and arable farms can be mitigated through the adoption of farm management options, especially once the causes of N leaching are identified. These nutrient mitigation options could range from management changes to large capital investments and significant system changes.
For example, N leaching in vegetable growing operations might occur due to:
- High use of applied N as a result of sparse root systems for the crops (particularly when they are immature)
- Poor N use efficiency
- Short growth periods and therefore (in some cases) multiple crops in one year
- Grown over winter when leaching rates are high due to high rainfall and saturated soils
- Large amounts of crop residue left in the paddock after harvest, which is worked into the soil.
In this example, the mitigation options would be mainly focused around fertiliser management and crop rotation.