Irrigation becomes top priority for 2010

11-01-2010 | Not Specified

The Government's focus will be on lifting primary productivity in 2010 and irrigation will be a key driver, Agriculture Minister David Carter says.

"New Zealand is gifted with water which doesn't always fall in the right place at the right time."

Carter said the Government would be looking at what support was required to get better water storage and better irrigation to existing areas.

It is unlikely the support would be direct financial aid for schemes. "We will not go back to the days of subsidy-funded schemes, but we are not saying there is no money to help with the establishment of schemes."

He said the plan was to encourage substantial investment from "other parties".

Ironically Government plans to alter power companies' assets may undermine irrigation schemes already planned.

The review of crown research institutes will be completed early this year. Past governments have been criticised for the lack of spending on agriculture research even though it is a good return on investment.

Several years ago Treasury put the return on investment in research and development (R&D) in agriculture over the past 75 years at 17%. Government contribution to agricultural research was about $130 million before the science reforms in 1990 and is now about $70m a year.

Carter said that through the Primary Growth Partnership fund, the sector would receive $190m in taxpayer money over four years, then $70m a year from there on. An equal amount is expected to be matched by industry.

His focus would also be on the Dairy Restructuring Act and Fonterra's capital restructure. "... Making sure it delivers the best potential wealth to New Zealand rather than just to its shareholders."

The Government did not believe Fonterra had reached its maximum potential and had been in meetings with it to discuss options.

Carter was asked if discussions involved corporatisation.

He said Fonterra needed to stabilise capital. Farmers were able to exchange shares based on their production in any one season.

Carter was confident the Wool Industry Taskforce would deliver a satisfactory report. It was about the future of the sheep industry and needed to include meat companies.

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