Farmers are welcoming the Government's $400 million irrigation project, but the Green Party is warning it will mean more intensive farming and even more river pollution.
Primary Industries Minister David Carter announced on Wednesday the May budget will allocate $80m start-up funding for the project.
A Government-owned company will be set up to attract private investment for regional water infrastructure development.
That development will include how rainfall is capture and stored for dry summer periods, and improving productivity of land with better, more reliable water access.
More efficient use of water will also reduce leaching of nutrients from land to neighbouring waterways.
Federated Farmers applauded the announcement - and says environmentalists should too.
President Bruce Wills says pasture at his Hawke's Bay farm is brown, after no significant rainfall since mid-December.
"It highlights the big two opportunities we have with water storage: the economic and the environmental," he said.
"Farms like mine have dams but they can only last so long. In winter, when you see our rivers over capacity, you ask why this cannot be stored for use when we hit a dry spell like now."
He says a distribution price for farmers means the scheme will be a hand up, rather than a hand-out.
However, Green Party water spokeswoman Eugenie Sage says with 52 percent of rivers already unfit for swimming, irrigation schemes will only make the situation worse.
"More irrigation and more intensive agriculture, with increased stocking and more fertiliser, will result in greater water pollution," she said.
"And at the same time the Government is subsidising irrigation it is reducing the ability of the Department of Conservation and community organisations to advocate for healthy rivers - it has slashed funding and weakened water conservation orders."