One of the great frustrations in prairie agriculture is the failure to fully capitalize on the irrigation resource of Lake Diefenbaker in Saskatchewan.
The reservoir on the South Saskatchewan River, completed in 1967, has the capacity to irrigate 500,000 acres, but only about 100,000 acres are now served.
Preliminary plans are in place to add two more irrigation districts— the Westside and Qu’Appelle South projects — but each would likely cost at least $2 billion and government funding is unlikely any time soon, given the many other competing infrastructure priorities such as hospitals, schools and roads.
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However, considering the potential economic benefits of increased irrigation and the increased global interest in food security, it may be time to investigate the potential for private investment in the irrigation possibilities from Lake Diefenbaker.
As global food demand grows in step with increased prosperity and a growing population, never before has agriculture presented such an investment opportunity.
The interest is clear from the activities of individual, fund and pension based investors, who have in the past few years put money into domestic farmland.
Internationally, many billions of dollars from China and the Middle East have been invested into agricultural opportunities in Ukraine and Africa.
Irrigation development in Western Canada could tap into this trend, paying long-term dividends to outside investors.
A report prepared for the Saskatchewan Irrigation Projects Association in 2008 laid out the broad benefits of a plan to fulfill the Lake Diefenbaker opportunity.
It estimated the economic return at $12 billion in increased employment and income over the 40 years.
The benefits include drought proofing and reduced taxpayer support to crop insurance and disaster programs, higher crop yields, production of higher value crops, increased livestock production, feeding and processing and the potential for value added processing.
Benefits would extend beyond agriculture with spin-off economic activity and improved drinking water quality for the people of Regina and Moose Jaw and smaller communities.
Advocates of Saskatchewan irrigation note that new irrigation opportunities in other parts of the world are limited because of declining water resources. Groundwater tables in China, India and even the United States are rapidly falling.
A reliable source of irrigation water becomes even more valuable when considering global climate change, with its potential for more frequent extreme events such as drought.
Prairie irrigation development to date has relied on government and farmer investment because of the slow payback. Attracting non-farm private investment will require a new strategy and targeted sales pitch likely associated with a specific project with a shorter payback horizon.
The proposed Upper Qu’Appelle canal might be particularly appropriate for a public-private partnership (P3) funding model.
It would move water from Lake Diefenbaker 90 kilometres to Buffalo Pound Lake, creating irrigation opportunities on 100,000 acres and improving the quantity and quality of water for Regina and Moose Jaw, the industrial corridor between the cities and the region’s fast growing potash sector.
This diversity of users and sources of potential revenues could be the catalyst for a successful P3 development.
