Rivers of gold

By Rebecca Macfie In Ecologic

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Photo/John Cowpland

This article was first published on May 22, 2014.

Recipe for prosperity: take flat land, skilled farmers, fertiliser and cows. Add cheap water. Fold in new tech­nology, lashings of debt and permissive environmental rules. Voila! In a decade or two you have a thriving district with next-to-no unemployment, a rising population and a rate of economic growth almost twice the national average.

The district is Ashburton, sandwiched between two great braided alpine rivers, the Rakaia and the Rangitata, and serviced by a town bristling with farm accountants and consultants, agricultural-machinery and irrigation-equipment suppliers, and soon to be graced with a smart new art gallery and state-of-the-art sports centre.

The scorched greys and browns evoked by Bill Sutton in his famous Canterbury landscapes have been washed away by water delivered from the 66km Rangitata Diversion Race – an enormous canal built during the 30s Depression and sold by the Crown to local farmers in 1990 for $1 – and distributed through myriad irrigation schemes to 64,000ha of farmland. Sutton would scarcely recognise this land, now cultivated to a vivid green and populated by giant centre-pivot irrigators that creep slowly across broad paddocks, watering the grass that feeds the cows that produce the milk that makes the region rich.

On paddocks that once grazed upwards of two million ewes, there is not a sheep to be seen. The dairy farms of the Ashburton region are the largest in the country and they carry more cows per hectare than anywhere else. Lucrative crops are grown here, too – fodder crops for cows, as well as clover, ryegrass, carrots, radishes and bok choy for seed production. Half the world’s radish seeds and a third of the global supply of carrot and bok choy seeds are produced in the district. The area used for growing crops has shrunk as more land has been turned over to dairying, but the availability of reliable irrigation water has swollen the productivity of the soil. A decade ago a hectare of wheat would yield a nine-tonne crop; today it will produce 15 tonnes, according to Andy McFarlane, a farm adviser whose zone of influence in the rural sector spreads far beyond his home town of Ashburton.

The sinuous braids of the Rakaia River near Ashburton: water in abundance has brought prosperity to the district, but also caused division over how best to manage its future. Photo/Arno Gasteiger


Mark and Devon Slee have been among the leaders of the region’s journey from hardship and uncertainty to irrigation-led confidence and wealth. In the mid-1980s, Mark Slee’s parents ran sheep on their Hinds property, half an hour south of Ashburton, but they were blighted by drought and the sudden withdrawal of farm subsidies. Two and a half decades on, Slee still chokes up when he reflects on the grinding struggle to keep the family farm afloat at a time when the region was on its knees.

“We couldn’t carry on sheep farming. There was no money in it,” he recalls. In 1987, the Slee farm was one of the first in the district to convert to dairying. Back then, milk powder wasn’t the white-hot commodity it has become, but dairying still offered a better income than sheep.

The Slee property was already part of the Mayfield Hinds irrigation scheme, which had been delivering water from the Rangitata Diversion Race to 33,000ha of the mid-Canterbury plains since the late 40s. When the Slees converted to dairying, it took 28 days to get the water around the farm via a border-dyke system of small canals. Still, it was a struggle to grow enough grass to keep the cows fed, and in 2001, Mark and Devon – who took over the farm in 1989 – bought two centre-pivot irrigators, which applied the water much more efficiently. The great steel structures were new to the region and others in the district looked at the Slees as if they were mad. Now they have 10, spread across a greatly expanded enterprise.

They have added two adjoining properties to the original farm for a total of 1011ha. Rather than the 2.2 cows to the hectare they ran 20 years ago, it’s now 3.8. Twenty years ago they had 600 cows producing 320kg of milk solids each; today they have 2640 cows, each producing on average 475kg. Back then they poured 800mm of irrigation water per hectare onto the property each year; today they use less than half that amount. From a staff of three back in the early 90s, the business has grown to employ 13 full-timers and two part-timers, all housed in the 11 homes on the property.

Everything on this farm is documented and analysed. GPS technology tracks precisely where fertiliser and effluent have been applied and the data are recorded on a digital hub accessible from anywhere, any time.

Electronic sensors buried in the soil record the moisture content of the ground, ensuring the irrigators apply just enough water to keep the grass and fodder crops growing, but not too much. Every paddock has been soil tested.

The big macrocarpa hedgerows that once typified this rural landscape have long gone to clear the way for the big irrigators to move across the paddocks, but over the past five years the Slees have spent $100,000 planting native shelter belts stretching for 8km. For these reasons and more, they won the Ballance Farm Environment supreme award for the Canterbury region this year.

Meanwhile, the Mayfield Hinds irrigation scheme has become much more reliable and sophisticated. In the past, the scheme had to throttle back the water supply to farmers during the heat of summer because of low flows in the Rangitata River, but the construction of massive storage ponds to collect and hold surplus water from the spring snowmelt in the mountains will get around that problem.

There were plans, too, to replace the scheme’s 260km of open canals with underground pipes that would deliver water under gravity pressure to the farmers’ gates. The upgrade would have saved the 20% of water that evaporates or drains out the bottom of the races, enabling a wider area to be irrigated. But at a recent vote too many of the scheme’s farmer shareholders baulked at the $135 million cost and the plan has been shelved for now.

Derek Wilson, who farms next door to the Slees, joined the revolution from sheep farming to irrigated dairying in 2002 and now runs 900 cows on his land. He has lived on the property from age four and says the region hasn’t had it this good since the Korean wool boom. “There wouldn’t be any dryland sheep farming around here now. The economics of this area revolves absolutely around dairying.”

“This is probably the best place in New Zealand to be a dairy farmer,” says Slee. “The Taranaki and Waikato can’t produce what we do.”

Mark and Devon Slee on their Rangitata property: enthusiastic supporters of irrigation schemes that have turned the family fortunes around. Photo/Martin Hunter


The well-documented downside to this irrigated wealth is the impact on lowland waterways and aquifers. Despite their environmental care, the Slees’ farm – like every other intensive farm – leaches nutrients. The cows urinate onto the ground, releasing more nitrogen than the grass can take up, and the surplus slips through the silky alluvial soils into the groundwater and from there into streams and drains.

About 47kg of nitrogen a hectare drain through their paddocks every year. That’s about the same rate of leaching as 20 years ago, despite a 70% increase in the number of cows per hectare on the farm. But it’s about five times as high as the dryland sheep farms that once dominated this area of the ­Canterbury Plains.

Environment Canterbury (ECan) monitoring shows the lowland waterways in the Hinds region have been getting rapidly more contaminated since 2004, reflecting the intensification of farming since the late 1980s. ECan data show that in 2012 the waterways were carrying 10mg of nitrogen per litre of water, a level toxic to aquatic life. Nitrate levels in groundwater have similarly been rising relentlessly and, at almost 12mg per litre, are higher than World Health Organisation drinking water guidelines.

In resource-management speak, the waterways around here are – like those across most of the intensively farmed Canterbury Plains – over-allocated for nutrients, and the area is classed as a “red zone” by ECan.

When farmers such as the Slees and Derek Wilson made the switch from sheep farming, no one talked about nutrient losses or leaching and there were no rules to stop them converting their leaky soils to intensive dairying. But now that the horse has bolted and the revolution in land use is well advanced (there are ambitions to irrigate a further 245,000ha in Canterbury, including 30,000 in the Ashburton area), the search is on for ways to lock the barn door to stop things getting any worse.

But neither the farmers nor government-controlled regulator ECan want to kill the golden goose that has delivered the region such prosperity. As Mark Slee points out, his farm does business with 80 local suppliers of goods and services: undermine the profitability of farms like his by forcing them to reduce their stocking rate or introduce high-cost environmental mitigation and you undermine the prosperity of the region. “We just need time to make the changes,” he says.

Province-wide rules drawn up by ECan, as well as proposed catchment-level rules for the Hinds area, appear to provide farmers with plenty of time. By 2017, farmers who are leaching more than 20kg of nitrogen per hectare will need to have a resource consent and farm-environment plan. They won’t be able to increase their rate of nitrogen leaching, and under the proposed catchment rules they will be benchmarked against yet-to-be-defined “good management practice” for their soil and farm type. New farmers, however, will be barred from leaching more than 27kg of nitrogen per hectare – almost half the level on Mark and Devon Slee’s well-run farm.

It’s hoped these changes will achieve the modest ambitions that have been set for the lowland streams. The goal is that they will eventually be improved to the extent they are toxic to only 20% of fish species. Some of this improvement in the Hinds region will be achieved by “managed aquifer recharge” which will dilute the pollution in the groundwater by taking water from the Rangitata and putting it on large gravel pits from where it will filter down into the aquifers.

In the tug of war between environmental and economic concerns, the proposed rules have come down squarely on the side of dairy-led wealth.


On the dry east coast of the North Island, civic and farming leaders want what Ashburton has. They, too, would like to turn water into agricultural gold, and they want environmental rules that don’t stand in the way. From Hawke’s Bay and Wairarapa, troupes have travelled south to study the mid-Canterbury economic miracle and returned home wide-eyed with stories of sensational wealth. In Ashburton “every second person’s a millionaire”, exclaimed Central Hawke’s Bay Mayor Peter Butler to the New Zealand Herald last year. Bob Tosswill, of the Wairarapa Regional Irrigation Trust, reported how “liquid gold” had transformed mid-Canterbury and could do the same for his region.

The Government, too, has plans to replicate the Canterbury experience elsewhere. Support for big irrigation schemes is a central plank of its economic policy, which counts on a doubling of exports – including agricultural exports – by 2025.

Clockwise from top left: farm adviser Alison Dewes, Primary Industries Minister Nathan Guy, Fish & Game adviser Corina Jordan and RMA architect Sir Geoffrey Palmer.

“Water in New Zealand is very much like minerals are to Australia and oil is to Saudi Arabia,” says Primary Industries Minister Nathan Guy. “But we only collect and store about 2% of the rain that falls in New Zealand and we know there are huge benefits from water storage projects. I’ve seen studies indicating that we could grow irrigation by up to 400,000ha and that would increase our exports by $4 billion.”

More than two decades after central Government got shot of its involvement in irrigation schemes by selling them all to farmer-owned companies for $1 apiece, the state is now back in the business of sub­sidising irrigation. Up to $400 million has been tagged for investment in new water projects over the next few years, with $80 million appropriated in 2013 and a further $40 million in the 2014 Budget.

The money will be distributed by Crown Irrigation Investments (CII), which has been set up with a high-profile board of directors, chaired by Dame Alison Paterson, and has a mandate to provide cheap finance to irrigation schemes that would otherwise not get off the ground. CII made its first investment earlier this year – a $6.5 million loan to Central Plains Water, a large scheme in Canterbury’s Selwyn River catchment that has been on the cards for years and has just begun construction of its first stage.

A separate $35 million Irrigation Acceleration Fund is available to finance irrigation feasibility studies around the country.

“At the same time, “bottom line” rules for freshwater quality have been drafted by the Government. The proposed National Objectives Framework gives a nod to public concern about the impact of intensive farming on rivers and lakes, but leaves ample headroom for further agricultural run-off. According to Parliamentary Commissioner for the Environment Jan Wright, the proposals would allow for levels of nitrate toxicity 10 times the current median concentration in the lower reaches of the Waitako River.

Labour’s David Parker has condemned the proposed standards as “make-believe” rules.

In the wings are the Government’s plans to reform the Resource Management Act in a manner that, according to the act’s architect, Sir Geoffrey Palmer, would reduce the relative importance placed on environmental protection and increase the importance placed on development.


The standard-bearer for the Government’s ambitions to use water as a driver of economic growth is the proposed $300 million Ruataniwha Water Storage Scheme (RWSS) in Central Hawke’s Bay. The scheme involves the construction of an 80m-high dam on the Makaroro River, a tributary of the Tukituki River, and a network of canals and pipes that would bring irrigation water to 25,000ha of farmland. The promoters of the RWSS promise the scheme will bring riches to the region, creating 2250 new jobs and injecting vigour into struggling rural towns such as Waipukurau and Waipawa.

With reliable irrigation water, it’s expected that intensive dairying would take up 37% of the scheme area, according to Ashburton farm adviser Andy McFarlane.

The RWSS is also touted as having major environmental benefits for the degraded Tukituki, providing for “flushing flows” to be released from the dam during summer when the river is low and warm and clogged with periphyton, the mix of slime and algae that thrives in nutrient-rich water. It has also been sold as a salve to climate change, which threatens regions such as Hawke’s Bay with increasingly severe droughts.

The region’s environmental regulator, the Hawke’s Bay Regional Council (HBRC), is the key promoter of the project (through its investment arm, the Hawke’s Bay Regional Investment Company), as well as a likely funder to the tune of $80 million. The promoters are hoping that CII will back it with about $100 million of cheap finance. The remainder of the cost will be covered by private investors, although two prospective backers, the South Island’s Ngai Tahu and TrustPower, recently pulled out. Almost $4 million has already been advanced by the Irrigation Acceleration Fund for technical investigations and to pay for the necessary approvals under the Resource Management Act.

Last June, the Government ordered that the application for resource consents for the RWSS and an associated plan change relating to water quality limits in the Tukituki catchment be referred to a board of inquiry for a decision.

After weeks of hearings, the board released its interim decision in mid-April.

To the dismay of the scheme’s promoters, the board delivered a possibly fatal blow to plans to use irrigation as a means to turn Central Hawke’s Bay into a warmer version of Ashburton. It has also thrown a major spanner in the Government’s strategy to use irrigation water to fuel economic growth.

In short, the board concluded that HBRC could go ahead with the dam and irrigation scheme, but that the volume of nutrients leaching from farmland in the catchment would have to be controlled at a level that assured the “ecological health” of the Tukituki River.

In so doing, it comprehensively rejected the arguments of the scheme’s promoters – and their scientists – that nitrogen isn’t a problem for the Tukituki and that the volume of nitrogen leaching into the river could be allowed to increase substantially as long as the other key farm nutrient, phosphorus, was controlled.

HBRC argued to the board of inquiry that nitrogen needed to be controlled only to “toxicity” levels – an average of 3.8mg of nitrogen per litre of water in the river, at which the water becomes toxic to 20% of fish species.

In running this argument, HBRC was adopting the same approach as the Government’s proposed National Objectives Framework “bottom line” rules for freshwater quality, as well as those promulgated by ECan, both of which have toxicity as the threshold for freshwater pollution.

At 3.8mg of nitrogen per litre, there would have been plenty of headroom left in the Tukituki for more intensive farming in the catchment.

But the board of inquiry concluded this “hands-off” approach to nitrogen management involved a “high level of risk”, and that it went against established scientific understanding about the dual role of both nitrogen and phosphorus in the degradation of rivers and lakes.

The board concluded that allowing pollutants to enter a river up to the point where the environment became toxic made no sense. As Russell Death, a freshwater ecologist who presented evidence for the RWSS’s key opponent, Fish & Game, told the inquiry: “The adverse effects of nitrate on ecosystem health occur long before levels reach toxicity, just the same as alcohol makes one sick long before it becomes toxic.”

The board ruled that the “hands-off” approach to nitrogen favoured by the RWSS promoters wouldn’t meet the objectives of the National Policy Statement on freshwater management, and was inconsistent with the approach taken by the High Court in the neighbouring district of Manawatu.

Favouring the evidence put forward by Fish & Game, it ruled the level of nitrogen in the river must not exceed 0.8mg per litre, a level that protected the river’s ecological health.

As it happens, the nitrogen loading in the river is already at or above 0.8mg at several monitoring points – which means there can be no further intensification of farming.

Further, the board concluded that farmers’ rights to leach pollutants from their land should be allocated according to the type of land concerned – the more vulnerable the land and soil, the lower the allocation.

Andy Pearce and Andrew Newman, drivers of the Ruataniwha irrigation dam. Photo/John Cowpland/Getty Images


Despite the unequivocal nature of the board’s interim ruling, the scheme’s key champion, Hawke’s Bay Regional Investment Company chief executive Andrew Newman, remains bullish about the chances of bringing the project to fruition.

After a plea from the Hawke’s Bay Regional Council – which argued the decision would have a serious impact on the farming sector in the region by precluding land use intensification – the Government has given the board of inquiry an extension of time to June 28 to produce its final report.

Submitters are entitled to make comments on minor or technical matters relating to the interim decision, but not the substance of the ruling.

Nevertheless, Newman told the Listener: “I wouldn’t make too many assumptions about where this decision is going to end up.” Like everyone involved in this complex and controversial case, Newman is aware that the Government was flabbergasted by the board’s interim decision and sees it as a major problem for its growth strategy.

Newman’s chairman, Andy Pearce, is more loquacious in his commentary on the decision, calling it a “slam dunk”. Pearce, a hydrologist, former chief executive of Landcare Research and now chairman of the Hawke’s Bay Regional Investment Company, says by imposing a maximum nitrogen concentration of 0.8mg per litre, the board of inquiry not only has blocked further agricultural intensification, but will also force existing farmers to roll back their operations.

He notes that the Hawke’s Bay Regional Council, in its submission on the board’s interim ruling, has declared the RWSS scheme will not be viable if the decision is upheld.

Pearce argues that the ruling strikes at the heart of intensive farming. “My view is that if the rules as proposed in the Tukituki remain, then as night follows day, when the [Hawke’s Bay] Regional Council does a plan change for the Heretaunga Plains, the Ngaruroro and the Tutaekuri catchments [the two other major Hawke’s Bay rivers] – which it has to do by the end of 2016 – it will have to apply those rules to those catchments.

“The legal presumption is that you would have to demonstrate cause for a different set of rules. And everything south of the Ngaruroro main stem, the Heretaunga Plains, all have [dissolved inorganic nitrogen] levels that are at least double the Tukituki.

“So there will be a massive impact on land use planning requirement and mitigation.”

Pearce says the ripple effect of the Ruataniwha decision will go far beyond Hawke’s Bay. Environment Canterbury is seeking to regulate nitrogen at toxicity levels, but “the board of inquiry has comprehensively kicked for touch that whole approach … It has said regulating for toxicity is not the way we should be doing things, and that we should be regulating for ecosystem health.”

Ultimately, he says, the board’s ruling affects “every region in the country … If the board of inquiry’s view that the appropriate thing to regulate for is ecosystem health … it’s hard to see how that doesn’t get applied elsewhere.”

In the meantime, Pearce believes there is scope to influence the board of inquiry’s final decision, despite the narrow legal parameters for submissions. He says the numbers underpinning the interim decision don’t pass the “sanity check”. In particular, the nutrient allocation levels stipulated for different land use classes would, if every farmer leached to the maximum allowable, produce a level of nitrogen in the river 50% higher than the maximum figure of 0.8mg per litre of water.

“And the board of inquiry in its own words says it intended to permit intensification, but the rule it has set [0.8mg] makes it impossible for that to happen and requires that existing land be de-intensified.”

Irrigation New Zealand, the lobby group that represents water schemes and suppliers of irrigation equipment, claims the board of inquiry’s decision would require 700 existing farmers to have a farm environmental plan and obtain a resource consent to operate by 2018.

Fish & Game, the advocacy group that coined the term “dirty dairying” 12 years ago and can count the Ruataniwha decision as a major victory against intensive farming interests, agrees with Pearce that the implications of the decision are enormous.

It has filed an appeal to the High Court against Environment Canterbury’s proposed Land and Water Regional Plan on the grounds that it seeks to limit nitrogen levels at toxicity levels.

Corina Jordan, Fish & Game’s technical adviser and leader of the case against the Ruataniwha scheme, says her group will be arguing that there is no scientific evidence to support ECan’s decision to set nitrogen at toxicity levels. In light of the Ruataniwha decision, she puts the chance of success in the High Court at 90%.

If she is right, it is likely to bring a dramatic and possibly painful end to what Waikato farm adviser Alison Dewes describes as the region-wide “field trial” in which Canterbury farmers have been permitted to intensify their operations on the region’s shallow leaky soils without the discipline of rules that protect the environment.

The result is a “tragedy of the commons” in which the cost of degradation is being born by the waterways and the public rather than by the farmers who have benefited.

The Ruataniwha decision, says Dewes, changes that fundamentally. “We have to live within our limits. Ecological forces will drive the shape of economic growth.”

The Ruataniwha project is touted as having major environmental benefits for the degraded Tukituki River.

Water, water everywhere

Schemes being developed, expanded or planned:

CENTRAL PLAINS WATER: Stage one to irrigate 20,000ha in Canterbury is under construction. Will eventually irrigate 60,000ha of the plains.

RUATANIWHA WATER STORAGE PROJECT: Proposed construction of dam to hold 104 million cubic metres of water and irrigate 25,000ha of Central Hawke’s Bay.

WAIRARAPA WATER USE PROJECT: Investigating scheme to irrigate up to 50,000ha.

HURUNUI WATER PROJECT: Water-storage and distribution network to irrigate 58,000ha in North Canterbury. Consented.

ASHBURTON LYNDHURST: Irrigates 30,000ha in mid-Canterbury and is being upgraded to increase efficiency of water use, enabling it to expand to cover a further 4000ha.

MAYFIELD HINDS: Existing scheme watering 33,000ha in mid-Canterbury. Completing a $15 million water-storage project.

VALETTA: Existing mid-Canterbury scheme watering 7400ha. Currently spending $30 million upgrading to a piped distribution network.

HUNTER DOWNS: Plans to irrigate 40,000ha in South Canterbury, taking water from the Waitaki River. Consented.

RANGITATA SOUTH: Scheme under development to irrigate 14,000ha of South Canterbury.

NORTH OTAGO IRRIGATION COMPANY: Irrigates 10,000ha. Expansion planned to water a further 10,000ha.

MANUHERIKIA IRRIGATION SCHEME: Existing Central Otago scheme, investigating storage to extend irrigated area.


Pollution solutions

Compared with the old border-dyke systems, centre-pivot irrigators have greatly increased the efficiency with which irrigation water is applied to farms, enabling farmers such as Mark and Devon Slee to carry higher stock numbers without corresponding increases in nitrogen leaching. Advances in irrigation technology promise to bring further improvements.

Five years ago, Methven cropping farmers Craige and Roz Mackenzie began using technology that maps the variability in plant growth so that exactly the right amount of fertiliser can be applied to crops. The savings on fertiliser paid for the technology in the first year.

They went on to set up a soil-surveying business, using Canadian technology that emits an electromagnetic field into the ground, producing a detailed map of the depth, type and moisture-holding capacity of the soil in every paddock. The electromagnetic survey is then “ground truthed” by taking a range of soil samples.

The resulting soil map can then be fed into variable-rate irrigation software developed in Palmerston North, which uses GPS technology to direct the centre pivot to apply the appropriate amount of water for the soil, ensuring that excess water doesn’t drain through.

The Mackenzies have also developed a patented system for the precision application of nitrogen fertiliser to dairy pastures. The system directs the nozzle to switch off and on as it passes over patches of nutrient-rich ground where cows have urinated or defecated.

At Lincoln Agritech, a subsidiary of Lincoln University, research is under way to take precision irrigation to the next level. Chief executive Peter Barrowclough says the group has Government funding to develop a system in which a microwave antenna attached to the centre pivot irrigator would measure soil moisture in the moments before the irrigator passes across the patch of ground. That information would then be fed into software that would adjust the amount of water applied.

“You might have a farmer who is applying, say, 350mm of irrigation water in a normal season and he will have a certain level of nitrate leaching with that. If we can use this technology to reduce that by 50mm, that will reduce his nitrate leaching losses and could avoid him spending on other nitrogen mitigations,” says Barrowclough.

Technology such as this adds to farmers’ costs, but “there is an environmental cost that is going on … that is not being accounted for in farmers’ profit and loss accounts”, says Barrowclough.

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