pp pp pp pp pp

The amount of water in rivers is heavily influenced over the long term by what happens on land, particularly in the headwaters. Hydrologists call this water yield. Alpine wetlands, bogs, tarns, and particularly tussock grasslands all collect and store water, which is released to sustain downstream flows during dry periods.

We don't traditionally place a market value on water, but in 2005, the value of water flowing from Te Papanui Conservation Park, at the head of the Taieri River, has been estimated at $136 million a year if it was to be supplied from somewhere else. Water yield from Te Papanui supplies irrigators, hydro-electricity generators and Dunedin. However, grazing, ploughing, burning, drainage of small wetlands, the unchecked spread of wilding trees and planting of exotic forests all reduce water yield, in some cases significantly, such as in the loss of tussock grasslands or pine forest conversion. While burning has reduced, many of these damaging practices continue. The cumulative effect - draining a wetland here, a forestry block there - all adds up to a loss of river flows downstream.

This isn't to criticise landholders trying to make a living - the trouble with our current system is we have no mechanism for valuing water yield even though it's essential downstream, whereas the economic value from grazing and growing is easily determined and encouraged. Tenure review on former Crown pastoral lease property has protected a lot of land with water yield values in return for cash payments and freehold rights on the lower country. But there are still large amounts of higher altitude land with water yield values in private ownership, and we need a new mechanism to recognise and provide for their protection. This could be achieved through simple land-use planning controls but maybe we need to go further than that.

Perhaps it's time to introduce the concept of ''water farming'', and to reward upstream landholders with identified values on private land to maintain and even enhance water yield values. The land remains private, with the landholder receiving some benefit in return for maintaining the land in a suitable state that maximises water yield. That means maintaining or enhancing tussock cover, wetlands, and removing wilding pines.

The concept would be a valuable option in the toolkit for high country farmers. Downstream water users should think of it as water insurance, to give them more guarantee of supply in dry years. There are good examples of similar systems in several countries around the world, particularly in South America.

Dry events, like the one this summer, are expected to increase, as a result of a changing climate, and we need to start talking about the problems they cause and find a suitable mechanism for maintaining and enhancing water yield if we want to sustain rivers for both fisheries and farming in the future. Such a system would place Otago at the forefront of water management. In fact, the new Otago Regional Policy Statement's greater planning recognition for water yield from tussock grassland as a land value is an important first step in the right direction.

• Peter Wilson is the environmental officer for the Otago Fish and Game Council, and is deeply involved in water allocation processes throughout Otago. Emeritus Prof Sir Alan Mark is a retired University of Otago scientist, and has a lifetime of involvement with the South Island high country. Dr Robert Hofstede is an international consultant on conservation, including water yield, at Quito, Ecuador; and visiting research fellow, department of botany, University of Otago.