Jim Sutton Speech On Water Management

Speech Notes

23 July 2002
Water Management meeting, Wellington

Ladies and Gentlemen: international pundits say the next big international war will not be fought over oil, but over water.

Hopefully, that next big war won't be here in New Zealand. But I believe that saying has an important resonance: water management is a hot potato. Questions about water allocation bring people's emotions to the boil, especially if they think someone else's set of values are going to impinge on their way of operating.

We all regard water as a public good, and we jealously guard our right of access to it. The more polarised our views become, the more difficult it is to identify wise counsel and agree on compromise.

This conference is important, I think, as part of the process of informing the debate.

This conference is about the policy framework, and the material informing the policy process. It is not about topical issues such as "dirty dairying" or the place of water conservation orders.

This conference is an opportunity to focus on the technical basis for water allocation and to engage in debate about where the technical information is leading us. Speakers from different points of view ? including central government, local government, consultants, scientists, and farmers ? have been invited to question progress and offer direction to this technical debate.

Water has been instrumental in shaping New Zealand ? rural and urban. It's dictated our settlement patterns, our land use, and our farming systems. The natural stream pattern was a key determinant of farm size, and subsequently the subdivision of family farms from the big estates of early settlers. Streams and watercourses determined the paddock subdivision and management options for those farms.

We value water in different ways today.

The real change is that we now have the techical ability and sometimes the economic capability to move water around and make choices about where it will be used and how it can be used. We have also all become much more aware of the range of environmental, recreational, and cultural perspectives on water and of the potential for competition between these interests. Everyone in New Zealand has an interest in water and how it is used.

Agriculture is by far the dominant user of allocated water in New Zealand. Seventy-seven per cent of all water allocated by regional councils in New Zealand is used by agriculture. The vast majority of that is used in irrigation.

This high proportionate water use in agriculture and horticulture is not unique to New Zealand. And it is not reflecting wasteful rural uses, but rather the continual evapo-transpiration requirements of actively growing plants.

Such a high proportion of New Zealand's water being used in agriculture inevitably results in close public scrutiny of how we manage and allocate water and how effectively we use it.

The economic contributions from irrigation are considerable. MAF has calculated on 2002 values that the approximately 500,000 hectares of irrigated land in New Zealand are returning $1 billion a year on a net gross margin basis over and above the net return from that same land if it were in dryland farming systems.

But equally, irrigation in seasonally dry areas is allowing farmers to change land uses and giving them the control to produce to quite tight specifications for product quality. Irrigation has become integral to rural change and community development in those areas.

During the past 10 years, there has been an increasing public interest in the adequacy and the quality of water supplies in New Zealand.

On this point, I have been assured that the absence of any papers on water quality in this particular conference is not an oversight, and is not because of any lack of awareness of the considerable level of public interest in water quality. These issues will be the subject of a separate conference later in the year. That conference will report on water quality investigations which are underway at present.

The 1998 drought focused rural and urban people in both islands on questions such as whether we had enough water and whether future generations are going to run out.

This conference is going to discuss those questions.

The Contestable Water Fund and now the water projects in the Sustainable Farming Fund grew directly out of those public concerns. The Government abd AGMARDT funds have been highly effective in stimulating water resource assessments and plannning by local community gropus. To date, the combined investment of these funds in local water projects is $6.8 million in 55 projects.

Projects funded are: 15 studies aimed at improving knowledge and providing information on water resources; 12 studies for the development of regional strategies for water supply projects that improve the allocation and reallocation of water resources; and 28 feasibility studies for irrgation and rural water supply schemes.

These water studies encompass an area of nearly 1 million hectares. They have implications for the 500,000 hectares of existing irrigation, and over the next 10 years, may result in a further 300,000 hectares of new community-funded irrigation developments, from southern Hawkes Bay down to Southland.

Perhaps more importantly, the funds have stimulated the development of manuals into best management practices for irrigation development that will be available to all irrigators. This will improve efficiency of use and provide information on how much water to apply and when, storage and distribution techniques, and underground water assessment.

Ladies and Gentlemen: as I said earlier, there are many questions surrounding water management.

We have had the Resource Management Act operating for 11 years now. Is it delivering the balance of outcomes we need for water? Are the processes and outcomes as appropriate in 2002 as they were in 1991?

What about our strategic overview ? or lack of it ? for water in New Zealand, and the risks of foreclosing future options through "first in time, first in right" water consent processes?

Are our water allocation processes adequate in encouraging efficient use? Or in encouraging uses that maximise returns?

The Ministry of Agriculture and Forestry and Ministry for the Environment research projects that are being reported on at this conference touch on these questions and contribute to the debate and the evaluation of water allocation policy. Most of these reports originate from policy research investigations in the past two years in areas such as strategic planning for water, economic and physical efficiency of water use, irrigation development issues, defining and managing in-stream values, planning tools for water, and so on.

I want to encourage your debate on these things during this conference and afterwards.

The issues are complex, and there's no single correct answer ? unfortunately. There never is when we are dealing with a wide range of personal values.

To further complicate the matter, we've chosen to treat the ownership and management of water somewhat differently from other resources. Water is treated as a Crown resource, a public good, and the vast majority of it is retained in our lakes, streams, and aquifers.

The majority of water allocated for abstraction is used for rural economic gain in circumstances where there is a poor understanding of the property rights and responsibilities which are associated with that water. This is at the core of many of the tensions which arise between interest groups.

I'd like to challenge you to think outside the square about these matters and to contribute your views, both here and subsequently to MAF or MfE staff or to my office.

Don't be constrained in your ideas by our current statutory processes or by discussion only with the conventional list of water interest groups.

I wish you all the best, and I look forward to hearing what you come up with.

Office of Hon Jim Sutton

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