Press Release – Ropere Consulting
Peter Fraser, principal at Rpere Consulting, commends the Wairarapa Leaders’ Tour scheduled for Friday 1st April, hosted by Wairarapa Water User Project (WWUP) and showcasing the use of water to produce high-value products while creating employment …Peter Fraser, principal at Rōpere Consulting, commends the Wairarapa Leaders’ Tour scheduled for Friday 1st April, hosted by Wairarapa Water User Project (WWUP) and showcasing the use of water to produce high-value products while creating employment and value in the economy.
“While 1 April is unfortunate in terms of a date, it’s nevertheless great news the promoters of the scheme can answer some hard questions – indeed, I have three of my own” Mr Fraser said.
A concern Mr Fraser has consistently highlighted is aligning the dairy-centric nature of the project (e.g. 55% of the water is assumed to go to either dairy or dairy support) with the reality of a long run milk price that is unlikely to be much beyond $6 kgMS; when the cost of producing milk on irrigated farms is considerably higher than that.
“In a world that’s awash with cheap milk the last thing anybody needs is more drystock land converted to high cost dairy land that needs watering” Mr Fraser said.
This leads directly to Mr Fraser’s first question: “Does WWUP have a ‘plan B’ if dairy is suddenly ‘out of the picture’, because that removes 50 million cubic metres of annual water demand from 90 million cubic metres of annual water supply.”
Mr Fraser further noted that potentially high value land uses such as horticulture only account for 3% of the assumed water use, whereas land devoted to arable and mixed farming actually declines if the project proceeds.
“The simple reality is 50 million cubic metres is a hell of a lot of water and that means a hell of a lot of apples” Mr Fraser noted.
Noting the dairy centric nature of the project, Mr Fraser’s second question relates to project ‘off ramps’. “From a governance perspective, what are the specific factors that would cause WWUP to recommend abandoning the project – because if the Ruataniwha taught us anything it is the critical need for early and on-going project off-ramps rather than seemingly endless extensions.”
Mr Fraser noted that potential off-ramps included insufficient water demand, the inability of the project to meet the public sector discount rate, and a water price that is uneconomic for farmers. Critically, these are ‘bright line’ tests rather than the infinitely malleable targets that have typified the Ruataniwha saga.
Mr Fraser’s final question is simply “how much will the water cost?”
” Farmers are some of the savviest business owners I know and I suspect water price is the key question they will want certainty around – because everything is a great investment if you paid the right price and everything is a dog if you don’t” Mr Fraser said.