The idea is for the farmers to use only the water not required by the city, which is otherwise spilled, taking it from the Deep Stream and Deep Creek pipelines running through the area, and storing it until needed.
They have engaged a consultant engineer, who has approached the Dunedin City Council seeking an indication of support for preliminary investigations into the idea.
The group of about 10 farmers could get government funding for up to half the cost of such an investigation, but did not want to invest the remainder if the council was not interested from the outset, a consultant engineer hired by the group to approach the council said.
David Hamilton, of Alexandra, said a report to councillors from water department staff indicating they did not recommend the council endorse a pre-feasibility study was not entirely surprising, but disappointing, as the group was only seeking support for the initial stages of an investigation and the scheme could technically work.
The report is to be considered by councillors at the infrastructure services committee meeting next week.
In it, staff report that any additional takes from raw water infrastructure raised issues around scheme management and charging and setting precedents, raising expectations and demands, and created financial and operational challenges for the council, as well as difficulties around renewal of pipelines, and ensuring that an increasing demand on water from the city would continue to be met.
Mr Hamilton said the farmers had reasonable sized properties which dried up at certain times of the year. The town supply pipes ran right through many of their properties, and even to have a small patch of land irrigated in those periods would mean they could produce some winter feed of their own.
Water would only be taken from the pipes when it was not required by the city, and would be water which otherwise would be simply wasted.
"This is water coming all the way past these farms and being spilled into the Kaikorai Stream."
He said the group accepted that the city owned the infrastructure, that farmers would have to set up water storage on their properties, and the regional council would have to consent to varying the use of the water.
"It's definitely something that's technically possible. We agree that city has first rights to the water. It is just that sometimes there is some extra water that's not being used and these people want to tap into that."
Clarks Junction farmer Marty Deans said the idea had been around for several years, but the group believed the regional council was soon going to be asking questions about the water not being used by the city - he believed about 40% of the water take was excess - and the timing was right for schemes such as these.
At this stage, all the farmers sought was co-operation and information from the council, so they could establish whether it was economically feasible, he said.