Andy Hayes: Scheme Chair and Fifth-Generation Waitaki Farmer

Andy Hayes: Scheme Chair and Fifth-Generation Waitaki Farmer

The new dairy shed, built in 2018.

Andy Hayes is a fifth-generation farmer in the Waitaki District of New Zealand’s South Island. He is the chair of Haka Valley Irrigation Ltd. (HVIL), a small irrigation scheme established in the last decade, and is also involved in representing small irrigators in his role as one of the directors of the Waitaki Irrigators Collective (WIC), which promotes the interest of local schemes and independent offtakers. In this interview, Mr. Hayes tells us about his farming operations, his involvement in HVIL and WIC, and the broader landscape of irrigated agriculture in New Zealand.

Irrigation Leader: Please tell us about your background and how you came to be in your current position.

Andy Hayes: I was born and raised in this valley at a farm that has been in the Hayes family name since 1878. My children are the sixth generation to live here. The farm is close to a large river, the Waitaki, but the water has to be lifted 150 meters (492 feet) to get it into the valley, so back then it was not seen as possible. In the 1990s, we started considering it as part of establishing our own little irrigation scheme. After university, I came home and started looking at different things we could do with the business. We put in our own little irrigation scheme, which served us for 14–15 years before we needed a bigger scheme—something that could service a few more customers. We had interest from neighbors and local farmers.

My wife Liz and I bought the farm from my parents in 2009 and ran it for 4 years as a sheep and beef farm. In 2013, we looked at establishing a bigger irrigation scheme that would pump more water from the river into this area. We thought it would be viable to upgrade the existing irrigation system, which was a K-line system that dragged lots of little sprinklers around on above-ground pipelines. The K-line system had served its purpose for a while, but it was quite inefficient, so we wanted to upgrade to pivot irrigators. At the time, the sheep and beef industry wasn’t strong. Dairy was more profitable. We could see the value in putting in center pivots, but we needed to change the business to do that.

We converted to dairy in 2013 and then looked into building this bigger scheme, the HVIL, which was commissioned in April 2014. We made the other scheme redundant, and now we pump 800 liters per second (28 cubic feet per second, or cfs) from the river for the scheme. With more water, we looked at buying the neighbors’ land, and we did a land swap. We sold a lot of our steep, dry land and traded it for flat ground. We put pivots on the flat ground and irrigated it so that we could milk cows in that area. Right now, we have eight pivots, covering 450 hectares (1,112 acres); the remaining 350 hectares (865 acres) is still K-line, but we intend to convert it to a fixed-grid sprinkler system. In 2019, we bought another neighboring property with the same irrigation system scheme in place. We’ve gone from milking 500 cows to about 2,000 cows in the space of 8 years.

There are farmers in New Zealand who keep dairy cows in barns, but most of the dairy cows here are outside fed or grass fed. We’re running about 800 hectares (1,977 acres) of land with just over 600 hectares (1,483 acres) irrigated. The land is not all flat, and it’s quite difficult to irrigate the steep bits. Moving the remaining K-line irrigation system takes 4–5 hours every day. It’s time consuming and labor intensive. Another option would be to put in permanent sprinklers, but the cost of that is high—NZ$12,000 (US$8,613) a hectare. That’s hard to warrant when we already have functioning infrastructure in place, even if the labor is costly.

Irrigation Leader: Were you also irrigating the pastureland when you were raising sheep and beef?

Andy Hayes: With our old scheme, we only irrigated about 120–130 hectares (297–321 acres). With the new irrigation scheme, we could irrigate endless amounts. The bank also saw the room for expansion. We take around 300–400 liters per second (10.6–14.1 cfs) out of the irrigation scheme to irrigate the land we have.

Irrigation Leader: Did you convert from sheep and beef to dairy because dairy is more profitable?

Andy Hayes: At the time, it was. I was also slightly over the sheep industry. We were producing the bulk of our lambs for slaughter over the summer months, and the processing/ freezing works were reducing the amount received per lamb because of oversupply during those months. Even with the irrigation, we could not change the timing of our supply. This was a major reason why we wanted to change to dairy. Fonterra, New Zealand’s largest dairy company, pays monthly and has a relatively fixed pricing strategy for our milk, which means a more even income stream. As we had just bought the property, we needed a higher and more reliable profit margin to repay our debt. At the time, the dairy payout was really good, so this made our first year a whole lot easier. By years 2 and 3, the milk payout dropped by 40 percent; this hurt. Fortunately, it corrected itself, and since then, Liz and I have been able to purchase the neighboring farm while paying off some debt. Converting to dairy has massively increased the capital value of our land and allowed this all to happen.

Irrigation Leader: HVIL is the main scheme you get water from. Would you tell us more about the scheme and about your role as chair?

Andy Hayes getting things done around the farm.

Andy Hayes: It’s a pretty small scheme. The majority of the Haka Valley is dry land. There have been projects since the 1980s that have looked at different options for getting water from the Waitaki River up into the Haka Valley to irrigate it, including storage and irrigation systems. We formed a group in the early 2000s, and it took 10 years to get the water take consent, which we needed before we could get people to commit money toward the scheme and get the scheme in place. The implementation took 2 years, which was quite quick. Right now, HVIL serves three shareholders: me, a smaller farm, and a larger farm. It’s a small scheme in comparison to many in this area. It only irrigates 1,200 hectares (2,965 acres). Some of the irrigation schemes further down the river are 20,000–30,000 hectares (49,421–74,131 acres). I chair the scheme.

I’m also part of another entity, Waitaki Independent Irrigators Inc. (WIII), which was formed 12 years ago to help ensure the reliability of water supply to independent consent holders, such as smaller farmers who have independent consents through the regional council rather than being part of a bigger irrigation scheme. WIII was formed because a company called Meridian was trying to take as much water as possible for hydroelectricity development, a development which would have threatened the loss of river water supplies for those independent consent holders.

WIII is a member of WIC, which covers 80,000–90,000 hectares (197,684–222,395 acres) of irrigated farmland in the lower part of the valley. That includes bigger irrigation schemes that had the same issues as the independent consent holders, including reliability of supply. HVIL is also a member of WIC. We all got together to work collectively so that we can go before the regional councils with an emphasis on looking after the whole valley, not just trying to get supply. WIC focuses on more than just reliability of supply. Right now, we’re addressing environmental concerns and making sure all the irrigators in the collective are being environmentally responsible. In New Zealand, dairy farmers are continuously trying to improve our on-farm environmental management.

Irrigation Leader: Where does HVIL get its water?

Andy Hayes: HVIL, like all the other members of WIC, takes its water from the Waitaki River. Some of the independent consumers take water from tributaries of the Waitaki River, but it’s all from the same larger catchment.

Irrigation Leader: WIC advocates for the interests of the irrigators but also helps encourage them to be more efficient, correct?

Andy Hayes: Yes. Most of the bigger schemes have environmental management strategy plans in place that protect the schemes and try to exert a level of control and management over their shareholders. WIC is trying to bring some of those efforts down to smaller schemes, such as HVIL, and smaller farmers and independent consent holders so that they too can improve their farms’ irrigation management.

Irrigation Leader: Please tell us about the regulatory environment in New Zealand and how is it changing.

Andy Hayes: Around 10–20 years ago, there was a bit of a snatch-and-grab in which people bought or converted their land, got some water on it, and developed it, generally for dairy use. In response, over the last 5–10 years, the regional councils have put strong restrictions in place on how we operate our farms in light of the potential effects our farming is having on our natural environment. Those restrictions address not only irrigation but also on-farm practices. Most of these measures are aimed at improving or maintaining water quality. There are current concerns around nitrates, phosphorus, and sediment transfer. A lot of stock in the country are wintered on pasture in a confined area, so there is a high risk of nutrient runoff into waterways, and we have to manage this correctly.

Irrigation Leader: What are your other top issues today?

Andy Hayes: The regional councils have tried to govern New Zealand using a budgeting tool called Overseer, into which you plug in all your farm inputs, fertilizers, cow numbers, and pasture types. The idea was to try to compute a farmer’s potential nutrient discharges through their soil profile. It was really designed to reduce overstocking and the overapplication of fertilizer rather than to monitor and manage what farmers were doing on their farms. Regional councils adapted it to enforce limits on farmers’ inputs, which vary by region. That has been going on for the last 5–10 years. Lately, there has been a shift to managing farming based on scientifically based data about actual water quality trends.

HVIL has been testing its rivers, streams, and groundwater for the last 10–12 years to monitor for any effects we are having on the environment. Irrigation efficiency is what we’re chasing. That’s something we’re trying to lead on instead of being pushed into.

Fish screens are also quite a major issue. A lot of the bigger local irrigation schemes use rock bunds instead of mechanical fish screens, though the regional councils may soon implement a plan for the bunds to be replaced with mechanical screens. Some of the bigger schemes may need to carry out a multimillion-dollar upgrade to comply with the regional councils’ rules. Faced with that, they’re asking, “Do we have fish here? Do they need to be kept out? Are the goalposts going to move once we’ve spent this money and put in this infrastructure? Is it still going to be workable and reliable, and will it still meet targets in 10 or 20 years?”

Irrigation Leader: Schemes in New Zealand seem to pay for many of their upgrades and modernization projects purely through the shareholders’ funds. Are there also government grant programs that you can apply to?

Andy Hayes: There are catchment groups that receive government funds for environmental enhancements, such as plantings along waterways. However, there’s nothing for irrigation security or management. The government funds irrigation efficiency through Irrigation New Zealand, but infrastructure improvements within a scheme must be funded by its shareholders.

Irrigation Leader: Is there any pending legislation that would affect your operations?

Andy Hayes: The government is really pushing water quality. Right now, the Three Waters Reform is at the cabinet level, right at the stage at which it’s either going to work or not. I think the current government is going a little too hard on it. On the irrigation side, it’s difficult to compromise the allowance of water regionally or nationally because we are so reliant on it. I can’t see that being taken from us. The regional councils are struggling to see how they can adopt this reform. The current government wants to take authority away from regional councils and give it to two or three larger groups that will come up with all the regulations on what we can do. I can’t see that working. I think the regional councils do quite a good job of that. It is almost too much for the local councils to try to manage though. I can’t see the government-level Three Waters Reform really working.

Irrigation Leader: Is there anything you would like to add?

Andy Hayes: WIC is a great model for including a large number of irrigated farmers and water users on the same board and giving them the same information, right down to water quality and farming practices. The collective approach, if we can maintain it, gives us a voice on a national level, whether on policy or just in advocating for local farmers. Hopefully, that stays in place. Nationally, I think all farmers are struggling with the new government regulations that are coming into place or that have been proposed. It makes farming quite tough in New Zealand, regardless of whether you’re an irrigator or not.

As a country, we’re extremely efficient, economically and otherwise, in what we do. We’re amazing producers of varying products that are used all across the world. I think agriculture in New Zealand is still as strong as it used to be; however, the government-led regulations that may be coming in the near future have the potential to change farming in New Zealand. I think this will be beneficial for New Zealand, as we always need to be at the forefront of everything we do as long as it doesn’t compromise our core agricultural industry.

Andy Hayes is the chair of Haka Valley Irrigation Ltd. and a director of the Waitaki Irrigators Collective. He can be contacted at andy@millionsprings.com.