Water Transfer in Context – A New Zealand Case Study

Further questions of equity are raised by the exclusion of some farmers from the scheme. Although in the Opuhascheme everyone was given the option of buying shares, some chose not to do so, often for financial reasons asthe costs of establishing the necessary infrastructure are high. In some transfer schemes, such issues may beaccentuated by the fact that there are more groups wanting access to water than the shares available. Methods forinitial allocation of shares may need careful consideration. Various options exist for allocating shares, includingtransformation of existing permits into tradeable permits, buy-out of existing permits, the use of a ballot system,historical and potential beneficial use, or auctioning to the highest bidder (CS First Boston New Zealand, 1995;Doak, 2005; Ministry for the Environment and Ministry of Agriculture and Forestry, 2004). It appears that noone system could provide a totally equitable process but there needs to be discussion to enable stakeholders toagree on approved processes for allocation.Inevitably there will be a wide range of views regarding water transfer. Many farmers are of the opinion thateverybody was and is happy with the way the scheme is set up. These assumptions appear to be based on visibleoutcomes such as increased production and ability to capitalise on shares as well as the processes used to informthe community. As described, these were positive and well carried out processes that included the wholecommunity, and it may have seemed as though all groups were supportive of the scheme. “Fish and Game weresupportive of it. The community as a whole were supportive of it… there was no issue from Maori’s perspective.They were supportive of it. And there were no environmental concerns I don’t think” (farmer below dam). Asdiscussed above however, tangata whenua are one group that do not support water transfer in the Opuha scheme.There are a variety of factors involved in these differences in opinion, including the extent to which variousgroups can and do express their views. The important point is to be wary of making assumptions about the extentto which there is support for trading and transfer, and understand what factors are implicated in changing views,attitudes and practices.An important aspect that requires further research is that of shareholder and non-shareholder attitudes to andperceptions of how the system is working and will continue to work. For example, perceptions of the risk ofchanging rules relating to use of water, impacts of other regional (eg the Natural Resources Regional Plan) ornational (eg the Sustainable Water Programme of Action) planning approaches, and recent approaches byEnvironment Canterbury for reviewing consents. As discussed throughout this paper, many of these issuesshould become clearer once further transfer takes place and more time has passed. Initial experience andpredictions indicate that the drivers and barriers discussed above will be relevant. It remains to be seen whetherthese will change, and whether some of the drivers may in future be barriers or vice versa. It will be importantfor the administrators of the scheme to record data on the number and location of transfers and how thesecorrespond to hydrological conditions. Other areas for further research are the interactions and relationshipsbetween the transfer scheme and regulatory frameworks. It appears that there may be differing opinions on howthe scheme does and should work and issues require further discussion.There are a variety of economic, institutional, regulatory, environmental, social and attitudinal drivers andbarriers to water transfer. The Opuha Dam scheme has been hailed as successful by many, and with good reason.The ability to trade, lease or sell shares is an important component of the Opuha scheme. Our research has shownthat there is potential for real benefits from transferring water for farmers, shareholders and the widercommunity. The research has also revealed a range of factors that may inhibit transfer or that may create barriersto acceptance by all. Having an understandable, flexible and adaptable scheme that accounts for uncertaintiesand regulatory change will go some way towards achieving a system that works well. Open debate on thediversity of views and methods for including the range of views will also help to facilitate acceptance, as will theuse of processes that are inclusive and participatory. Principles of equity and fairness are increasingly beingrecognised, but further research will be required in order to establish methods for including such principles inboth policy and action. This will be important for any resource allocation mechanisms. Property rights issues areanother area that will require further discussion in New Zealand, particularly as more trading and transfer takesplace.ACKNOWLEDGEMENTSThe authors are grateful to the SCFIS shareholders and chair, staff of Hubbard Churcher and Co, and otherinterviewees for their time and assistance with this research. Thanks also to Murray Doak (MAF) and Jeff Foote(ESR) for reviewing the paper. This research has been carried out as part of ESR’s capability funding for waterallocation research.REFERENCES