Waimea Plains: economics of freshwater quantity management

The Waimea Plains (Tasman District, New Zealand) is a major horticulture area, highly relianton irrigation. Irrigators draw water from an integrated surface water and groundwater system.Fresh water is over-allocated by 64%. Irrigators face significant restrictions due to naturalfluctuations in river flow and groundwater levels, i.e. water is unreliable.This case study evaluates different options to address these problems. A catchmentoptimisation model is used to assess the benefits from enabling water permit transfers andfrom the proposed Waimea Community Dam (‘the dam’). A spreadsheet model is used toassess the impact of different ways of cutting back water permits, should the dam not goahead. The case study is based on farm- and orchard-level models which estimate irrigationneed, profit and nitrogen leaching under different levels of water allocation, reliability and soiltype for apples, viticulture, market gardening and dairy farming over a period of 40 years.Key findings are that:• water permit transfers would result in moderate benefits on average (8.6% increasein average profit) but significant benefits in dry years (46% increase in profit);• the dam would result in significant benefits by enabling expansion of irrigated areasand conversion from unirrigated pasture to higher value crops, and providing areliable water supply for existing and future irrigators (103% increase in averageprofit and 10% decrease in nitrogen leaching).• Should the dam not go ahead, water permit cuts based on irrigation need wouldresult in lower, and a more even distribution of, costs than flat-rate cuts.