Water for land keeps cash flow going

A pivot irrigator operates on Callum Kingan's Enfield farm. Mr Kingan spends up to $800 a day on...
A pivot irrigator operates on Callum Kingan's Enfield farm. Mr Kingan spends up to $800 a day on water. Photo by Hamish MacLean.
The dramatic effects of irrigation are demonstrated in this aerial photograph of the Ngapara...
The dramatic effects of irrigation are demonstrated in this aerial photograph of the Ngapara Tapui area looking southwest towards Kakanui Mountains. Photo by NOIC.
Twyla, Callum and Fergus Kingan (2) enjoy the now green fields of their Enfield dairy farm....
Twyla, Callum and Fergus Kingan (2) enjoy the now green fields of their Enfield dairy farm. Photos by Hamish MacLean.
Kauru Hills deer farmer Dallas Newlands says  the pipes behind him, once in the ground, will...
Kauru Hills deer farmer Dallas Newlands says the pipes behind him, once in the ground, will summer-proof his farm. A drought could cost him $450,000 this year.
Work on stage 2 of the North Otago Irrigation Company's irrigation scheme is under way near Peaks...
Work on stage 2 of the North Otago Irrigation Company's irrigation scheme is under way near Peaks Rd at Windsor.

In September 2016, when the water is turned on in the North Otago Irrigation Company's expansion, the irrigation scheme will cover 25,000ha and it will be one of the largest irrigators in North Otago. North Otago reporter Hamish MacLean finds out how the irrigation company's water scheme is helping to transform the Waitaki district.

Water is a ''game-changer''.

Enfield dairy farmer Callum Kingan (39) returned to the farm he grew up on when the North Otago Irrigation Company turned the water on for 100 farmers in 2006.

He converted what was a dusty, dry 170ha sheep farm that ran 1200 breeding ewes and supported the Kingan family, to a 340ha operation - 230ha running 750 dairy cows with a 110ha run-off.

The farm has not only doubled in size since Mr Kingan and his wife Twyla moved home from Dacre, Southland, it now draws an income for Mr Kingan's semi-retired parents, provides for the Kingan family of five, and Mr Kingan has hired four full-time staff.

''Water is seriously addictive, it's incredibly addictive, it really is,'' Mr Kingan said.

''As soon as you've got any, you want as much as you can get.''

Although reliable water is costly - water costs Mr Kingan between $600 and $800 a day when it is turned on to irrigate 110ha of his farm - it has dramatically increased the farm's productivity.

''When I sit down and do my budget every year, I'm plus or minus 5% on my production.''

A dryland farmer he said, might budget plus or minus 50% on their production.

''We've ramped up our business, we run a lot closer to the line than what ... dryland boys can do.

''You can run a lot closer to the line, because you know.''

But it is not doubt that troubles Kauru Hill Rd deer farmer Dallas Newlands - he knows it is dry.

Mr Newlands (35) has bought 50 shares in the North Otago Irrigation Company - he is one of the 100 farmers waiting for water when the company turns on the water for its $57million, 10,000ha expansion scheduled for completion in September 2016.

When he spoke to the Otago Daily Times in mid-November his farm had received 11mm of rain for the month. In October he recorded 20mm.

Each share he bought will provide the equivalent of 24mm of rain a week, his 50 shares will cover about 75ha.

''It's going to summer-proof me,'' he said.

''If this drought carries on, I could potentially lose up to $450,000 for the financial year.''

The margin of 50% Mr Kingan said was necessary for dryland farmers to budget for, hit Mr Newlands hard last year. His farm is capable of grazing 1000 dairy cows - if it rains and he can grow feed. Last year was dry and he could only take 500 cows. Further, he could not commit to taking any number of cows until six weeks before they would arrive on his property.

Reliable irrigation would provide certainty, he said. He would no longer be at the mercy of rain.

''Dryland farmers, you're dictated to too much,'' Mr Newlands said.

''When it goes dry you've got to sell your stock. And that means you've got to sell it for cheaper.

''If you can take that `middleman' out, or say, `No, I don't need to sell because I've got water, I can hold out a little bit longer.''

'The North Otago Irrigation Company is a member of the Waitaki Irrigators Collective, a limited liability company representing 580 irrigated farms over 75,000ha across North Otago and South Canterbury. It draws from the Waitaki River.

Its five irrigation schemes and one independent irrigators' society account for roughly 12% of irrigated land in the country.

The North Otago Irrigation Company is moving earth and laying 114km of pipes to expand its scheme to twice its current size by September next year. When complete, the company's system will reach from Duntroon to Maheno and Oamaru, it will add 100 irrigated farms to the collective, and will be among the collective's largest members.

The irrigation company's chief executive, Robyn Wells, said the shareholder-owned company was not a profit-generating company but was created ''to deliver environmentally sustainable low-cost water as far as we can within North Otago''.

In 2014, the company commissioned an economic and social impact assessment. Its findings were, for some, unsurprising.

''There's a number of benefits when you do a large infrastructure project in the community,'' Mrs Wells said.

Beyond the initial construction jobs, and farmers' spending on on-farm infrastructure, there was ongoing servicing and farmers pushing their land to be more productive.

''When the productivity of the land increases, there's higher returns to the land as well,'' she said.

''All that is economic activity that flows into the community.''

Irrigation, she said, was changing the demographics in the area - the Kingans were not the only people who returned to, or stayed, in the area as irrigation changed the game of farming in the district.

''The decision to go into irrigation created a lot of decisions in the community about succession.

''[The assessment showed the command area has] more people in the 18-30 age group, more children, the school rolls had gone up, the household income was higher. So, there's all those things.''

Farmers themselves have spent about $20million on the scheme's expansion, and Waitaki Mayor Gary Kircher recently led the district council through repackaging a $10million loan to the company that was to be repaid in 2016 to a $17million term loan to be paid off in 2022 to assist the expansion.

''No matter what happens, agriculture will continue to be the industry underpinning our economy for the foreseeable future,'' Mr Kircher said.

''We're doing a whole lot around trying to increase tourism, manufacturing has increased, and we'll just keep working away on those things, but even manufacturing is based largely on agriculture.

''If you were in North Otago during the '70s and '80s and experienced the droughts and the impact that that had on everyone in town, you would know that irrigation is critical to make sure that we don't go through those troughs anymore.''

Federated Farmers North Otago provincial president Richard Strowger, of Totara, said: ''We have such good land here in North Otago. It's ... just so dry.''

''North Otago is in the middle of a drought ... we had 340mm the last 12 months, and that has absolutely stifled North Otago's economy. All the lambs have basically been weaned and sold out of the district, and all the cattle has left, that's taken all that employment out of North Otago - the shearers, the meatworks, all that grinds to a halt.

''That shows you what the value of irrigation is ... you keep cash flow going ... ''

 

hamish.maclean@odt.co.nz

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