Irrigation New Zealand says the Government's plan to become an investor in larger scale irrigation schemes is what it's been pushing for.
The Government is allocating $35 million over five years in next week's Budget for an irrigation acceleration fund to help in the development of schemes up to the investment stage.
It says it also intends to create a $400 million equity fund, so it can become a cornerstone investor in irrigation projects, though it will not be committing to that amount in this year's budget.
Irrigation NZ chair Graeme Sutton says getting the Government to invest in the construction of schemes is a significant step and one that the organisation has been working on behind the scenes.
Agriculture Minister, David Carter says he expects irrigation schemes already in the planning pipeline should be able to tap into the new funding and the potential economic returns are high.
He says NZIER has identified that if a further 340,000 hectares was opened up to irrigation, another $4 billion would be added to the economy.
But environmentalists warn agriculture has already degraded water quality and threatened species.
Dr Mike Joy, a water ecologist at Massey University, says boosting irrigation to intensify agriculture will make it worse, with no regulation to control it.