16.1. Institutional structure

Service delivery responsibilities

• Irrigation in New Zealand is concentrated in specific regions, particularly the east coast of both Islands. Irrigated operations are primarily associated with suitable land classes (soil type, topography, proximity to water).
• Irrigation infrastructure and services are provided by a variety of private and user-owned schemes, sometimes with a degree of local government involvement.
• Service delivery is highly decentralised. Farmers and growers are shareholders in these entities, which are responsible for the operation, maintenance, and delivery of water to the farm gate. In the South Island irrigation more typically operate as schemes, but across NZ there are also numerous independent irrigators in a single catchment. Sometimes individual irrigators are organised as collectives or user groups with global consents although not directly connected by pipe or canal infrastructure.
• Regional councils are responsible for managing water resources under the Resource Management Act 1991 (RMA). They develop regional plans that set allocation limits and grant resource consents to both schemes (for water takes) and individual farmers (for water use). In practice, water take and use consents have become linked (i.e. consideration of what land use the water is used for when consenting the take).
• On-farm, the individual farmer or landowner is responsible for the efficient and compliant use of the water, including managing nutrients as well as sediment and biological (E.coli) runoff.

Governance and oversight

• Central government, primarily through the Ministry for the Environment (MfE) and to a lesser extent the Ministry for Primary Industries (MPI), sets the macro-level policy framework. The cornerstone has been the National Policy Statement for Freshwater Management (NPS-FM), which embeds the principle of Te Mana o te Wai, prioritising the health of water bodies. It has been amended by the Resource Management (Freshwater and Other Matters) Amendment Act 2024 and other minor amendments.
• The Government is in the process of replacing the RMA with the Planning Bill and Natural Environment Bill, which are expected to pass into law in 2026. There has also been public consultation on multiple other current National Policy Statements and National Environmental Standard instruments related to water (productive, drinking, urban, industrial)
• Regional councils and Unitary Authorities provide the primary governance and oversight. They translate national directives into legally binding regional plans, monitor water use and environmental impacts, and enforce compliance with consent conditions.
• IrrigationNZ serves as the key industry body, providing advocacy, promoting best practices, and facilitating knowledge sharing among irrigation schemes and farmers.

16.2. Paying for investment

• The primary funding model for irrigation infrastructure is user-pays, where farmers contribute capital by purchasing shares in a scheme and then pay annual charges for water access and delivery, covering both operational and capital costs. Individual irrigators fund on-farm infrastructure, such as bores, pumping stations, power supplies, and control systems.
• Historically, central government provided significant capital subsidies and grants to encourage development. More recently the government has had a role in assisting project feasibility with grants (Irrigation Acceleration Fund, MPI) and capital phase bridging loans, representing a shift towards co-investment models. Crown Irrigation Investments Ltd (a government entity established to invest in schemes) is in the process of being wound up, but funding may now be available through entities like the Regional Infrastructure Fund for projects that meet specific economic and environmental criteria.
• Schemes also raise capital through commercial loans from banks, with the security of their assets and shareholder commitments forming the basis for lending.

16.3. Historical investment drivers

• A key driver of investment has been to increase agricultural productivity and enable higher-value land use. Irrigation has facilitated the conversion of dryland farming to more intensive and profitable sectors like dairying, viticulture, and horticulture.
• Another major driver of investment is the desire to smooth agricultural productivity within seasons. More dependable crop productivity helps stabilise long-term price contracts for buyers, and therefore consumers.
• Irrigation infrastructure helps to mitigate the impacts of frequent and intense droughts, particularly in the eastern regions of the South and North Islands (for example, Canterbury, Otago, Hawke's Bay), by providing a reliable water supply for crop and pasture growth.
• Post the Second World War and through to the early 1980s, government policy actively encouraged agricultural expansion and intensification through direct investment, subsidies, and development programmes.²²⁵ The subsequent increase in land under production required more resources, which included access to water.

16.4. Community perceptions and expectations

The Commission does not have any specific information on whether irrigation infrastructure is meeting overall community needs.

16.5. Current state of network

• The network is a mix of ageing and modern infrastructure. Many older schemes, developed from the 1930s to 1980s, still rely on open, unlined canals which can result in significant water loss through seepage and evaporation.
• There is a clear and ongoing trend of modernisation, with schemes investing heavily in converting open races to more efficient piped networks. This reduces water loss, enables pressurisation for modern sprinklers, and improves overall control.
• On-farm systems are also in a state of transition. Older, less efficient methods like flood and border dyke irrigation have almost all been superseded, and there has been a significant shift towards precision technologies like centre-pivot, variable-rate irrigators, solid set, and drip-line systems. There has also been rapid adoption of data acquisition and analysis systems, including satellite technology and AI systems, for water-use decision-making support.

16.6. Forward Guidance for capital investment

• The Commission has not produced Forward Guidance for irrigation infrastructure.

16.7. Current investment intentions

• The Commission’s Pipeline does not contain any information on specific irrigation projects.

16.8. Key issues and opportunities

• Technology: Advanced irrigation scheduling tools, precision application technology, and data analytics offer a major opportunity to yield higher water productivity and reduce water consumption, reducing both costs and environmental footprint.
• Policy consistency: Investment needs and opportunities are influenced by environmental standards, targets and limits, meaning that consistent settings can help to optimise farmers and growers’ investment (along with public, institutional, iwi and foreign investment) in the best combination of infrastructure, new technology and agricultural processes.²²⁶,²²⁷ Appropriate policy settings can encourage the uptake of new technologies, shift water use toward high-value products and shift land use to its highest and best use. Water allocation is also a source of uncertainty with current cases before the court system.
• Asset management: Developing a sector-specific asset management framework as a collaboration between central government, regulators and industry would create standardised approaches to irrigation asset investment and operational management. Many older schemes face significant future costs for upgrading or replacing infrastructure to meet modern standards of efficiency and environmental performance. Greater investment in water storage and distribution may support greater efficiencies from existing schemes.
• Climate change: Climate change could lead to drier conditions in some areas around the country resulting in lower river levels. This may result in higher irrigation demand, primarily to ensure consistent productivity of crop yields and limit fluctuations in prices.