Annex 1: Irrigator Stakeholder Group Meetings
Dunsandel
Group profile
The Dunsandel focus group was invited from a catchment of irrigators sourcing water from groundwater on the upper Canterbury plains between the Selwyn and Rakaia rivers. Some irrigators also had properties closer to the coast utilising shallow groundwater. One irrigator was entirely reliant on run of river supply while two incorporated run of river supply into their irrigation system.
Number attending: 11
| Farm type | Number |
|---|---|
|
Dairy |
6 |
|
Other livestock |
4 |
|
Crop |
2 |
|
Horticulture |
|
|
Viticulture |
|
|
Lifestyle block |
* Numbers may not reconcile due to multiple land use.
Water source
Some irrigators were utilising multiple water sources. The majority of attendees (8) were sourcing their water from deep groundwater. There were three river takes and two shallow groundwater takes.
Irrigation experience
| Years of experience | Number |
|---|---|
|
<5 |
5 |
|
5-15 |
3 |
|
16-25 |
2 |
|
>25 |
1 |
Key issues
- Certainty of supply
- Consent life (x 2)
- Consent to drill and take should be linked
- Water allocation to new entrants
- Knowledge of the resource
- Consent renewal (x 2)
- Water harvesting (x 2).
Summary
The group was dominated by relatively new irrigators who were irrigating dairy farms from deep groundwater sources. The majority of experienced irrigators had further developed their irrigation capability in the last few years so all participants were well aware of the consent conditions and rules and regulations being used and proposed by Environment Canterbury.
The nature of the property right
The status of the planning regime in ECan's area is that the region is still operating under a Transitional Regional Plan while the Natural Resources Regional Plan - Water (NRRP) is still in a pre draft form. Expectations are that it will be notified in early 2004. Many of the water resources are still under investigation as to their appropriate allocation regimes as part of that process. In the meantime resource consents are being allocated on a first come first served basis with conditions that will bring them under any allocation or rules regime that eventuates in the NRRP. For many of the resources the potential restrictions or rules are publicly available in the pre draft documents.
Duration
Most new consents and renewals are granted for a thirty-five year period. Renewal of the consent at the end of this period is discretionary and is treated as if it were a new application. The consenting authority has the right to review conditions annually to deal with any adverse effect on the environment.
Flexibility
Consents are tightly specified as to the:
- abstraction rate.
- depth at which water is to be taken.
- stream depletion effect.
- interference effect on adjacent bores.
- risk of contamination due to abstraction.
- method and location of measuring devices to be used.
- appropriateness of the backflow protection system.
- provision of information to the monitoring authority at specified times.
- review of conditions of consent in the timing and purpose of the review.
- financial contributions.
In some instances, on vulnerable soils, the land use is specified.
Conditions on monitoring of water use and reporting them to the council.
Exclusivity
Where appropriate, the consent refers to conditions in the NRRP as regards to the nature of any flow and allocation regime for water sharing or rationing regime in the water resource.
Quality
Consent conditions are subject to annual review and any changes in the planning regime. No guarantee of existing reliability or availability is given although reliability targets are proposed in the pre draft plan and ECan are required not to over allocate the resource. In some cases investigations may prove that the resource is already over allocated once the proposed rules come into being.
Transferability
The transfer of a permit to take or use surface water is a permitted activity. However the water take may only be transferred to an alternative site within a transfer zone. For any surface water take the transfer must be downstream of the original take and must be registered with Environment Canterbury.
Divisibility
Consents are not divisible.
Consent holder understanding of the nature of the property right
Duration
Consent holders were well aware of the duration and renewal conditions of their consents. There was a general feeling that renewal should be virtually automatic if they had conformed to the conditions of the consent.
Flexibility
Consent holders understood the restrictive nature of the specification of the consent. It was felt that this was quite limiting on the nature of the property right. It was felt that connecting land use to the consent was very restrictive and would have long term impacts on land value.
Exclusivity
Real concerns as to the exclusivity of property right were expressed in relation to the lack of certainty about the nature and capacity of the resource. There was a general expectation that as resource knowledge improved that further sharing and rationing rules would be adopted. There was a feeling that as new irrigators were granted access to the resource that there was a potential for over allocation or a decrease in resource reliability for all.
There was some discussion about the impact on early developers of the resource and that they should be afforded some priority over later adopters who had the potential to negatively impact on the reliability of the resource.
"Further allocation is likely to impact on recharge levels and may well have cumulative effects on the exercising of our rights. We don't understand these risks properly."
There was a lot of discussion around the lack of certainty because of lack of knowledge of the resource.
"Because of the lack of knowledge and information about the resource, there is a lot of uncertainty about the resource now and in the future."
Quality
There was a general awareness and expectation that the consent conditions that specify the quality of the right are likely to change over time with the potential to negatively impact on the nature of the right. The exact impact of those changes was not well described or thought through.
"We are a bit naive as to the terms and conditions of our consents."
The expectation was that other stakeholder interests will increasingly impinge on these conditions through changes to the planning rules and allocation regimes.
There was an expectation which was advocated and welcomed that efficiency of use conditions should continue to drive water allocation and those inefficient users should be required to improve efficiency so that all users could benefit from the resultant improvement in access to the resource. It was felt that a more strategic view of water allocation and efficiency of use would strengthen their property rights. It was even suggested that "it is not unrealistic to expose use to market efficiency tests".
Transferability
Transferability of consents is not available in groundwater resources however it was felt that some form of group resource management should allow for tradability of entitlements during periods of shortage of supply.
Divisibility
The issue of divisibility was not felt to be important for groundwater users.
Expectations and behaviour
Consent holders were operating and investing within the terms of their consents on relatively short time frames of certainty as to the nature of the right. However there was an expectation that any changes in the nature of the right would not be sufficient to greatly alter any investment or operational decisions. This would lead to the conclusion that they expected that they would be able to react to any change and minimise its impact on business performance or management by making changes to their operation or business structure.
"I won't change unless my conditions change."
In other words they were managing their business as if there was a high level of certainty as to the nature of their property right and would react appropriately at the time of any possible changes.
There was a great deal of discussion around the potential for changes in the nature of the right to impact on the asset value of their business. There was a high level of recognition that possession of a water right drove development and investment and the ability to access and use water was the core of their business inputs. Therefore the potential land use and income streams were determined by the nature of the right. Any diminution of that right was felt to most likely impact on the asset value of their farming properties. This meant that there was a strong imperative to efficiently use the resource under the present conditions and fight to protect their property rights through the allocation system.
There was some comment that the present nature of the right was having a negative impact on their investment decisions in the short term and limiting potential land use options if tied to a specific land use. This impacted on the degree of flexibility they had in system choice.
There was some discussion that present conditions did not necessarily encourage maximising efficiency of use. It was felt that a more flexible trading / transfer regime would encourage both application and economic efficiency of use.
Attenuation
Consent holders believed that attenuation of the property rights was most likely to occur in the future as a result of increased knowledge and understanding of the resource and from external pressures from other stakeholders. It was expected that this would result in a further negative impact on certainty and reliability of access to the water resource. As has previously been discussed it was expected that this would impact negatively on the nature of the property right and this would be reflected in the asset value of their farming business. Farmers expressed real concern that this was most likely to occur at the time of renewal of their consents and were concerned that it could be a big problem in the future with impacts on property values towards the end of the consent period and would impact on possible succession options for their farming businesses.
The nature of the proposed allocation regime will mean that attenuation of the property right can occur at any time during the exercise of the right as a result of changes to the planning regime.
Summary
- Consent holders were well aware of the nature of their property rights.
- Uncertainty around any future changes to their property rights centred on increased knowledge of the resource which would be reflected in a change to the planning regime and the influence of other stakeholders.
- Consent holders were prepared to invest as if the property right would exist in its present form but were prepared to adjust to any potential changes in the future.
- It was expected that any attenuation of their property rights would ultimately be reflected in loss of asset value of their businesses.
Tasman
Group profile
The Tasman focus group was invited from a cross section of irrigators in the District. This meant that they represented a combination of land use types, water sources and irrigation experience.
Number attending: 9
| Farm type | Number |
|---|---|
|
Dairy |
5 |
|
Other livestock |
1 |
|
Crop |
1 |
|
Horticulture |
2 |
|
Viticulture |
|
|
Lifestyle block |
1 |
* Numbers may not reconcile due to multiple land use.
Water source
The majority of attendees (7) were sourcing their water from shallow groundwater. There was one river take and one person sourcing water from a community scheme that was based on river supply.
Irrigation experience
| Years of experience | Number |
|---|---|
|
<5 |
1 |
|
5-15 |
1 |
|
16-25 |
0 |
|
>25 |
7 |
Key issues
- Tradability
- Reliability of supply (x 3)
- Strict consent conditions, lack of flexibility
- Consent renewal (x 2)
- "Use it or lose it" (x 3)
- Over allocation of the resource.
Summary
The majority of group attendees were familiar with the water issues in the Tasman region through involvement in water user groups for the various water zones identified in the Tasman District. They had a good understanding of existing resource consent conditions, the status of the resource and the future direction of water policy in the District.
The nature of the property right
The Tasman District Council has two operative plans; the first is the Tasman Resource Management Plan with a subsequent notified variation to the plan. The proposed variation has significant changes to the water management regime. This has been brought about by the development of a considerable amount of increased knowledge of the water resources of the District which has highlighted that many of the water zones are over allocated. Therefore there is a need to alter the water allocation and management regime to address the over allocation issue through claw back of existing allocations and the encouragement of water augmentation and efficiency of use options to ease potential pressure on the resource. At the same time there is a desire to protect the security of supply of existing users as much as possible.
Duration
The council is moving to bring all consents into line with common expiry dates on a catchment or water zone basis. This means that consents tend to be given for a 10 to 15 year period. Consent renewal is a controlled activity which means that there is a requirement to grant renewal which is only subject to changes to conditions and discretions in the consent. It is expected that the majority of renewals will bring conditions into line with the proposed allocation regime.
Consents are subject to a "use it or lose it" condition which means that the right can be withdrawn if use cannot be proven over a certain time period.
Flexibility
Consents are tightly specified as to the location and means of use but are not tied to a particular land use.
Exclusivity
As the majority of water zones are over allocated there is a moratorium on further abstractions. The council manages waiting lists for water on a "first in time" basis. Most zones have sharing or rationing regimes that operate at times of triggering of low flow regimes or sustainable water yields. These sharing regimes offer a common reliability of supply to all users in a catchment at each rationing step.
Quality
Water volumes are allocated on the basis of calculated maximum soil type requirements for the area of land stipulated regardless of land use. This allocation level is based on offering a security of supply whereby a reduction in 35 percent of the allocated amount is expected during a ten-year drought period. Conditions are stated which allows for review of the consent if the allocation is not fully needed or exercised. Consent descriptions are tightly defined and monitored for compliance. Council retains the right to review permits to reflect actual usage.
Transferability
The Council encourages permanent transfer of lease of permits in order to encourage efficiency of use. This is subject to any restrictions that there may be on the allocation limit of a zone.
Divisibility
Consents are not divisible.
Consent holder understanding of the nature of the property right
The attendees at the focus group had a sound knowledge and understanding of the water allocation and management regime in the Tasman District. This was primarily as a result of their involvement in wide scale communication about water resource issues in the District and the formation and involvement in water user groups within each of the allocation zones.
Duration
Most consent holders accepted the need to bring renewal periods into line on a catchment or zone basis. This was driven by the fact that they were confident about the renewal provisions of their consents and the certainty of their ability to renew albeit with revised conditions.
Flexibility
It was generally felt that the tight restrictions around the description of the consent was limiting in terms of farmers ability to manage their consent properly. This was particularly in relation to what was perceived to be a fairly tight compliance monitoring regime. It was also felt that the issue of everyone achieving a maximum allocation of water according to location and soil type had a detrimental impact on the potential efficient use of water and lead to over allocation of the resource.
Exclusivity
Consent holders were relatively comfortable with the exclusivity of their property right because of the moratorium on further allocation of water in most zones and the implementation of common sharing and rationing regimes.
Quality
Generally consent holders were comfortable with the quality of their property right. Concerns were expressed around the issues of the potential claw back provisions in the rules which promoted the "use it or lose it" concept or a review of water allocation to reflect actual usage. It was felt that these conditions promoted inefficient use of water by people who wished to retain their rights. In some instances it was felt that this promoted use of water purely for the purpose of retaining the right and that this practice was impacting on the reliability of supply of other users.
Transferability
It was felt that the conditions around the tradability or transferability of water were limiting in their ability to achieve significant transfer of water. Some members of the group felt very strongly that a water right should be strongly connected to the land itself and that should then go back into the common pool if it was not required. This was particularly in the case of zones where there were significant waiting lists for water.
Divisibility
Divisibility of water consents was not considered to be an issue. In fact the opposite was the case, several of the group members prefer the concept of amalgamation of a number of different take and use rights on a single landholding to allow them the flexibility to take and use water where they required at certain times on their property.
Expectations and behaviour
Consent holders had a high level of confidence in the security of the property right in water due to the automatic renewal status. Their biggest concern was the reliability of supply of the water as the majority of water sources are over allocated and will come under increased pressure of use which will accelerated the triggering of rationing and sharing regimes.
"Reliability is the biggest issue here rather than duration."
As a result they are adopting conservative farming operations to buffer themselves from reduced reliability of water or examining options to overcome reduced reliability.
"With better reliability I could milk an additional 20-30 cows."
"I could put up an additional glasshouse."
"My operation mix means that I can divert water from early apple varieties across to later varieties so the restrictions don't hurt me."
They are seeking to invest in system improvements that would improve the efficiency of use of their water, including augmentation and damming for water storage. Many of the augmentation options require community schemes which pose the difficulty of achieving collective action and investment. They welcome the District Councils willingness to facilitate community development.
The biggest concern was the impact on property values as the nature of the right changed.
"The biggest decision I have is when is the right time to sell out before my property reduces in value too much."
Generally the behaviour was to work within the system to minimise impacts. Part of that was a healthy involvement in water user groups to help the council achieve their aims of claw back and efficiency of use provisions to bring the allocation regimes back into an equilibrium where rationing is less likely to occur.
However there was divided opinion on the importance of transferability / tradability in helping that aim. Some thought that the water right should be connected to the land and not moved while others saw the merit in transfer to achieve efficiency gains.
Attenuation
It was felt that attenuation pressure would increasingly come from the rapid development of the District creating more demands on the water resources in the future. There was concern that increasing demands from domestic supply would further exacerbate their reliability issues due to priority of domestic use.
Concern was expressed that tight policing of compliance to relatively restrictive right definitions would make the exercise of their right more difficult in the future or even result in loss of water.
The loss of asset value of their businesses was seen to be the greatest impact from further erosion of their property rights in water.
Summary
- Consent holders were well aware of the nature of their property right and potential changes to it.
- The planning regime gives security over duration of the right but considerable uncertainty over reliability of supply.
- Rules and conditions implemented to address over allocation of the resource have the potential to reduce present rights significantly through loss of water.
- Uncertainty over reduced reliability of supply is causing under investment in productive capacity or creating additional investment in mitigation.
- It was expected that any attenuation of their property rights would ultimately be reflected in loss of asset value of their businesses.
Blenheim
Group profile
The Blenheim focus group was invited from consent holders on the Awatere River these were all surface water takes that are subject to run of river rules.
Number attending: 9
| Farm type | Number |
|---|---|
|
Dairy |
0 |
|
Other livestock |
7 |
|
Crop |
2 |
|
Horticulture |
0 |
|
Viticulture |
6 |
|
Lifestyle block |
0 |
* Numbers may not reconcile due to multiple land use.
Water source
All irrigators were using the river as a water source with four incorporating water storage on farm as part of the system.
Irrigation experience
| Years of experience | Number |
|---|---|
|
<5 |
8 |
|
5-15 |
|
|
16-25 |
1 |
|
>25 |
Key issues
- Variability of council decisions
- Security of right
- Resource information
- Ability to transfer right
- Illegal activity
- Compliance conditions.
Summary
Attendees were dominated by relatively new irrigators who were well aware of the issues around consent conditions and the allocation and planning framework as a result of recent interaction with the Council during the consent application and approval process.
The nature of the property right
The Marlborough District Council has a Proposed Wairau / Awatere Resource Management Plan. This is presently under a review which is expected to be completed in 12 months' time. The review is in response to the rapid increase in demand on water resources for abstractive uses which is primarily driven by the rapid expansion of the wine growing industry. In the meantime council staff have had to develop consent conditions that are designed to control the allocation and use of water.
The Council is confident that it has adopted conservative minimum flow regimes on the Awatere River and have allocated water under blocks with different levels of reliability.
Duration
Duration of most consents is 10 years with renewal being a discretionary activity which is treated like a new application. The Council has the right to review consent conditions on an annual basis and invokes a "use it or lose it policy" to prevent hoarding of water rights.
Flexibility
Consents are tightly described in order to calculate the volume of water that can be allocated. This is driven by the land use mix chosen as there are different allocation levels for pastoral, cropping and viticultural allocation. The consent also defines the application system and area to be irrigated. Any alteration to any of the description items requires a new consent application. This means that there is very little flexibility in the consented use.
Exclusivity
Exclusivity is protected by an A, B and C permit system. A and B permits are offered at different levels of reliability with A permits having a higher level of reliability. B permits are not allocated until all A permits are taken up. C permits allow the take of water for out of river storage only. Many of the consent holders have a combination of permits. A permits are fully allocated while B permits are not fully taken up.
Quality
Class A water permits have a degree of reliability that is likely to be restricted on average for only one week every five years. Class B water permits will be fully available 80 percent of the time, partially available 18 percent of the time and completely unavailable 2 percent of the time. This level of reliability is not sufficient for most land uses and therefore class B permits are usually used in conjunction with class C permits and storage of water in on farm dams.
All permit holders share the percentage reduction in water availability equally.
Consents can be reviewed as a result of a change in the water management plan or on an annual basis as a result of monitoring and compliance reviews.
Transferability
Transfer of a water permit is a discretionary activity and must be transferred within the same aquifer or catchment area.
Divisibility
Consents are not divisible.
Consent holder understanding of the nature of the property right
Duration
Consent holders expressed concern about the ten-year duration of consents. Most irrigators investing large sums of money in viticultural development, which is dependant on irrigation water, will not have paid back their investment within the lifetime of the consent. Loss of the consent, or diminution of the water right, could have significant impacts on the income streams and capital value of their investment.
"I am concerned about the ten-year consent period and the impact on land values in the future if it is lost."
However the majority of consent holders were comfortable that consent renewal will be a reasonably straightforward process if they have conformed to the conditions of the consent. This is partly based on the understanding that the resource has been conservatively managed and is not over allocated. Therefore there should be no need for claw back or reductions in the volume of water allocated in the future.
Flexibility
Concerns were expressed about the lack of flexibility of the water right as a result of the tight specifications required in terms of crop mix, irrigation system and land area. The major concern was that if any of these were to be changed it would require a new consent application and possibly a change in the volume of water allocated. It was felt that this was too restrictive in terms of irrigators making strategic choices of crop and livestock mixes as well as improvements to the irrigation system.
Exclusivity
Although irrigators were happy with the water management regime in terms of its ability to protect reliability of supply at a known level, there were real concerns about the equity of the allocation process. The class A permits were obviously a valuable and sought-after item which were fully allocated. However there is no agreed system for reallocating class A permits as they become available. It appears that they are allocated on a first in first served basis at the time when they become available. It was felt that people who had already invested in development and use class B and C permits should have some form of priority in the allocation of class a permits.
Quality
Consent holders were generally comfortable with the quality of the conditions on their consents. This was partly due to the fact that there was a recognition that the allocation regime was relatively conservative and was able to protect reliability of supply within known parameters. This afforded them a level of certainty that they could use to plan their operations and investments around. There was an expectation that the consent conditions were not like to alter very much in the future. In fact expectations were that reliability for B permit holders could possibly improved in the future.
"We have the confidence to carry on investing and diversifying."
Transferability
Although consent holders accepted the value of the ability to transfer water there was a certain level of feeling that because A permits were a scarce resource that they should be offered back into the existing irrigator pool rather than transferred to a new development.
Divisibility
Divisibility did not appear to be an issue of concern.
Expectations and behaviour
It was interesting that the Awatere irrigators have a strong sense of community which is based around their geographic location around the Awatere River. They saw the river as a community resource ("our river") and as a means for the community to meet its further development. To a certain extent their definition of community was the farming families that had lived there for generations. There was some suspicion of "corporates" that had recently entered the valley and their treatment of the resource as a commercial good with little feel for the local community. This created an interesting conflict between what was best for them as individual business people and what may be best from a community point of view.
There was an expectation that the resource would continue to be managed in a conservative way and that there was a great deal of certainty about their rights to use it. Their investment decisions and property management supported this strong feeling of certainty around the nature of their right.
The major expectation that they were unsure about was the future allocation system of unused or surrendered rights. The hope was that an equitable system which favoured existing right holders would be put in place but recognised that they may have to take part in competitive behaviour to strengthen their property right. This would mean competing with friends and neighbours which was felt to be an unattractive option.
Attenuation
Confidence in the security of the property right meant that there was very little consideration of the possibility of attenuation of the rights in the future. The possibility considered was that of the potential for other stakeholders having an impact on the flow and allocation regimes as part of the planning process in the future.
Summary
- Consent holders have a high level of understanding of the nature and security of their property right. This was partly brought about by the fact that many were relatively new to irrigation and had recently gone through the consent application or renewal process.
- Irrigators have a high level of confidence in the security and reliability of their property rights and have invested heavily as a result.
- Future expectations were for a strengthening of their property right as a result of improved management of the water allocation regime.
