Almost all of it is used by around 2000 farms, as the vast majority are not irrigated.
It comes as farmers plan to protest against a perceived targeting of rural communities ahead of the election.
It is partly in opposition to Labour’s proposed water tax: the protest is in Morrinsville, Jacinda Ardern’s home town.
It is an area where few farms would be hit by such a tax, due to high rainfall.
Agricultural economist Peter Fraser and farm consultant Dr Alison Dewes said claims of farmers being burdened with huge costs from a water tax were overblown.
Steven Joyce has claimed some farms would pay $50,000 to $100,000 for a water tax. Bill English has cited the $50,000 figure.
Fraser and Dewes, using Dairy NZ figures, said there were 12,000 dairy herds in New Zealand consuming 4.8b cubic metres of water.
An average person – based on figures from Wellington, although water use varies nationwide – uses around 80 cubic metres of water, meaning dairy farms alone use the equivalent of around 58.2 million people.
Almost all of the water is used by about 2000 farms, primarily in dry areas such as Canterbury and Otago.
“We’ve had this huge gold rush to go and convert dry areas to these hugely water intensive uses,” Fraser said.
“There’s an issue here with how we’ve gone and used our land. Why have we gone and put these incredibly water hungry uses such as dairy farming in such water scarce areas?
“It’s because the water’s free.”
The average cost of a water tax on an irrigated dairy farm would be between $10,000 and $15,000, their analysis found.
It echoed an analysis by RNZ and Auckland University’s Public Policy Institute, which determined the cost to an average irrigated dairy farm would be $13,800.
Dairy NZ has disputed that figure.
Fraser said some “mega-farms” would pay up to $50,000, but it would mean they were each using water equivalent to 31,000 people, twice the population of Morrinsville.
“That’s a hell of a lot of water. We’ve just got to put into perspective how much water some of these mega farms are actually using.”
He said he would prefer the money drawn from a water tax to be paid into the Superfund, rather than specifically for river clean-up fund, but believed it opened up a debate that needed to happen.
He also said a water tax should apply to everyone, including domestic users.
“It would be $1.60 per person a year, so let’s suck it up. It’s not really the end of western civilisation.”
Dewes said the figures quoted by English and Joyce were far beyond what would apply to the average farm, and showed they did not understand dairy farming systems.
To get to a figure of $50,000 – let alone $100,000 – a farm would have to be enormous or diversified into wet rice farming.
“The fact is less than seven percent of all pastoral and horticultural land will be faced with a water royalty,” she said.
“It would be more helpful if the National party focused on developing sound policies that help farmers transition to high value, resource efficient land uses with a lower water, nitrogen and carbon footprints than pollute the media with scurrilous sound bites.”
Industry group Irrigation NZ produced its own analysis on Monday, stating the cost to an average, irrigated farm in Canterbury would be between $24,000 and $29,000.
‘When this additional cost is put in context of the profit generated by a family farming business – it will create a significant impact, particularly for sheep and beef, arable and vegetable farmers who have reasonably tight operating margins,” chief executive Andrew Curtis said.
He said the issue had been compounded by conflicting figures and a lack of detail from Labour.
Around half of irrigation occurs on dairy farms.