Greenpeace demands end to public subsidies for irrigation after damning report

Wednesday 21 September - Greenpeace is demanding an end to public subsidies for large-scale irrigation projects, after a report revealed the Government has thrown millions of dollar at a proposed irrigation project in the Wairarapa that doesn’t stack up financially.

An economic review of the Wairarapa application for irrigation funding was prepared by Rōpere Consulting for Fish and Game, and released today (find attached).

It finds serious fault with both the credibility of the economic analysis of the project, and the way MPI assessed the scheme’s viability.

“MPI is rubber stamping these Think-Big irrigation projects despite shaky economics. It’s literally throwing taxpayers’ money away,” said Greenpeace Agriculture spokesperson Genevieve Toop.

The Wairarapa dams project is one of several industrial irrigation schemes planned around the country. It has so far received a total of $2.5m from Government, and over $3m from the Wellington’s regional and district councils.

MPI approved the project promoters’ application for Stage 2 (Feasibility) funding and granted it $804,000. It did so on the basis the scheme would usher in more intensive dairy farming, at a farm gate milk price of $7.07 per kilogram of milk solids. This assumption was made in 2014. As the report concludes: “this is a completely unrealistic basis for decision-making in 2016”.

The predicted price per kilo of milk solids for 2016-17 is sitting at around $4.75. The report says it’s likely recent record low milk prices are not cyclical, but a long term structural change in international prices.

The report concludes that at current and prospective farm gate milk prices irrigated dairying is not viable in the Wairarapa - even if the water is free - meaning the project is unviable.

“Not only will these proposed irrigation schemes further deplete water quality in New Zealand by driving more industrial agriculture, but they don’t even stack up financially. It’s the same in Hawke’s Bay with the Ruataniwha,” said Ms Toop.

“The Government needs to give up its dream for more industrial dairying at any cost, stop taxpayer subsidies for big irrigation, and instead support ecological farming practices that look after our land and water.” said Genevieve Toop.

“Most New Zealanders would be horrified to know their tax money is being spent on flawed schemes that will drive more water pollution.”

Nearly 50,000 people have signed a petition demanding an end to Government subsidies for big irrigation. (1)

ENDS

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