The Government's announcement that it is forming a Crown-owned company to invest in regional irrigation schemes on its behalf has taken Irrigation New Zealand by surprise.
Primary Industries Minister David Carter has announced $80 million in initial funding for the company - to allow it to begin its role as a minority investor in irrigation projects around the country.
Irrigation NZ chairman John Donkers said having a Government-owned company investing in the initial stages of construction will take the pressure off small communities to provide all the capital up-front.
He said it's come a lot earlier than it expected and although the Government announced that it was planning to put funding towards irrigation infrastructure in the 2011 Budget, it was understood that was closely linked with the sale of electricity assets.
He said the fact the Government has now committed a first tranche contribution of $80 million is a vote of confidence in the irrigation sector and very welcome.
Mr Donkers pointed out the Government investment won't be a grant and will have to be paid back.
Mr Carter said the Government decided it had to move now because some irrigation projects are so far advanced.
The Government's irrigation funding announcement is widely applauded by farmers, regional councils and the dairy industry.
But it hasn't impressed the Green Party. It accused the Government of pouring millions into subsidising irrigation for intensive farming while failing to protect waterways from becoming even more polluted.
Spokesperson Eugenie Sage said irrigators will pocket the profits while tax payers fund the clean-up of rivers polluted through the more intensive farming which irrigation will allow.