The Government has answered Irrigation New Zealand's calls for more water storage by allocating a further $25 million worth of funding for new irrigation projects, the industry body says.
The injection from the Government's irrigation acceleration fund will go to towards the investigation and development stages of new schemes over the next five years, beginning in 2016.
Primary Industries Minister Nathan Guy said the need for more water storage was obvious and the funding would be welcomed by farmers.
"We've just come through a significant drought in the east coast of the South Island. In fact, it's still biting in north Canterbury," he said.
"Most farmers are realising that capturing and storing water is hugely important, not only for the economic growth and important for the regions, but it's good for the environment as well."
Irrigation NZ chief executive Andrew Curtis said more water storage was desperately needed in the dry east coast regions.
Mr Curtis said a reliable water supply would sustain communities and maintain the health of rivers.
"There's around $25 to $30 million worth of investigative work that needs to be completed to have done a thorough job in investigating all the opportunities for irrigation infrastructure development in New Zealand."
Mr Curtis said the projects were all over the country.
"Obviously the bulk of them is in Canterbury, but we also have east coast North Island with the Wairarapa, Hawke's Bay. We've also go a number of smaller projects which actually have some huge regional significance for places like Northland and Bay of Plenty that need to be finished off."