A government move to cut back on irrigation has been called a kick in the teeth by a South Island water company fighting drought in an arid region.
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The Hurunui Water Project is vowing to press on anyway, having already invested $10 million in a scheme to improve the water supply.
The government announced yesterday that it had begun winding down public funding for large-scale irrigation through the state agency, Crown Irrigation Investments Limited.
It said that was in line with its coalition and confidence and supply agreements.
Minister of Finance Grant Robertson said large-scale private irrigation schemes had to be be economically viable on their own, and should not require significant public financing.
There also had to be care for the potential of intensive farming practices to contribute to adverse environmental outcomes, he said.
Some schemes would survive because contracts had already been signed.
These are stage two of the Central Plains Water scheme in the Canterbury Plains, construction of the Kurow-Duntroon scheme at Kurow, South Canterbury, and construction of the Waimea Community Dam in Tasman.
Some schemes would not proceed with any public money.
However, small scale environmentally sustainable water storage projects could be considered on a case-by-case basis through the Provincial Growth Fund.
Irrigation NZ said it was disappointed that the Hurunui, Hunter Downs and Flaxborne irrigation projects would not be able to access loan funding.
"In Crown Irrigation Investments' Briefing to Incoming Ministers, the socio-economic gain to communities from planned future irrigation projects in New Zealand was over $1.2 billion per year," the organisation said in a statement.
It said the Hurunui, Hunter Downs and Flaxborne schemes all had strong community support and met environmental requirements around river swimmability and nutrient limits.
The board and farmer-shareholders are determined the Hirunui scheme will go ahead, despite the government axe.
"Water is fundamental for our community - it's the lifeblood of our region," Hurunui Water Project chief executive Chris Pile said.
"As recent extended droughts have painfully shown, our livelihoods are tied to climate and the reliability of water supply."
Mr Pile said that without a reliable and consistent supply of water, the farming future, and the prosperity of towns like Amberley, Waipara, Waikari, Hawarden and Culverden, were uncertain.
As a result of the government's decision, the company's scheme would be less ambitious and so would not future proof the region for its children and grandchildren, he said.