Water finally flows in Tasmania's dry midlands

Tasmania's massive irrigation expansion program has reached one of the state's driest areas and the taps have been turned on.

The Southern Midlands has an average rainfall of less than 500 millimetres a year and previously needed federal drought assistance.

A few years ago irrigation in the district was a dream.

Now farmers are spending millions of dollars on water rights and irrigation infrastructure such as pivot irrigators and dams.

Fields of irrigated poppies are already going in up and down the Midlands.

Farmers like David Fish used to lay awake at night wondering how to pay irrigation bills, but it is hoped this potentially high-yielding crop will put an end to that.

"Rosehill is a very dry area ... you get a nice rain and it can be two or three weeks before your next," he said.

"Just to have that ability to put small amount of water over a large area is a real advantage and just to have security of this water to grow the poppies .... [it] just gives us so much confidence going forward.

"You can lay awake at night waiting for that next rain but literally you can press a button and know they are going to be right so it's very reassuring."

The Federal Government had invested $140 million and the Tasmanian Government $80 million on this ambitious irrigation expansion program.

Farmers and private investors have paid $90 million for water rights.

Eleven schemes have come online across the state in the past few years, opening up thousands of hectares of farmland to water.

"This is a significant milestone for Tasmania to see these schemes rolled out and the contention we're making is that this is a nationally important program what is happening here in Tasmania," said Tasmanian Irrigation chief, Chris Oldfield.

Investment banker gets water flowing

The Midlands Scheme almost did not happen; the number of signed up private investors fell short of the Federal and State Government's requirements.

The deal-maker was an 11th-hour decision by investment banker David Williams, who bought $10 million worth of water rights.

"I bought in the Midlands and I bought in the lower South Esk so I think to be crude about it - 20 kilometres south of (Launceston) and 20 kilometres north of Hobart - it's a big area of land."

"In other words, it's land that's untapped basically for 250 years," Mr Williams said.

His decision paid dividends. He bought the water for $1,100 a megalitre and recently sold some for $1,400 a megalitre.

Despite his success, Mr Williams said he was not in the water business just to trade.

"I've said all along that one of my plans is to see if I can use that water as a seed for equity schemes in new projects and I'm happy to throw the water into new projects, or I'm happy to lease it, or I'm happy to sell it," he said.

"All I want to do is get the Midlands moving."

On a more sober note, Mr Williams was worried there were too few business development plans capitalising on irrigation.

"The feds and the state have done an unbelievable job setting up what is of national significance in terms of an irrigation system," he said.

"But it's not enough to build the biggest port in Australia, it's not enough to build the biggest irrigation system in Australia, you've actually got to go out and get people to use it.

"You've got to go out and do some business development and bring the largest horticulturalist in Australia down here to see what you've got. It doesn't have to cost, you've just got to invite them."

Maria and John Weeding were happy the scheme went ahead.

They bought $500,000 worth of water entitlements and were spending the same amount on infrastructure - the property has been undergoing major change.

"When we've designed our scheme we've designed it as if we are looking to where we may end up in maybe 10, 15 or 20 years time, because you only put the pipes in once that is our theory and the other thing is we've had to put a dam in," said Mrs Weeding.

Dairy influx in sheep country

Half an hour north, Richard Gardner runs a 2,000-hectare property in an area renowned for its production of fine merino wool.

His herd of dairy cows has been turning heads.

It was 1,900 megalitres of new water that gave him the confidence to convert.

"We've gone to cross-bred [cows] because of durability in this open environment and the fact they are going to have to walk a fair way to the dairy," he said.

"There's 750 in the current herd and we'll grow that to over a 1,000 cows over the next few years."

"It is a busy time. There's new water, new cows, new equipment and nine new staff.

"It is taking a bit to settle everything down and get new processes in place but milk is actually flowing in Tasmania's midlands."

His said his head was spinning even more this week, with a visit to his property "Annandale" by Prime Minister Tony Abbott to see the Midlands Irrigation Scheme in operation.

Tasmanian Irrigation, the body set up to manage the irrigation expansion, is hoping for $110 million from the Commonwealth to enable it to go ahead with the next stage, but there was no announcement during the visit.

Tasmania's Government pledged $30 million for the second stage the of irrigation expansion program for schemes in the state's north-east, north-west and the southern Highlands.

"We've now sold over 70,000 megalitres of water and the number of irrigators would be into the hundreds some have bought very small amounts of water some have bought very large amounts," Mr Oldfield said.

Farmers and private investors across Tasmania have paid $90 million for water rights.

The state's farms, it seems, are on the cusp of big change.