Mr Parker said he did not accept Central Otago's economy could lose the amount quoted by Central Otago Mayor Tim Cadogan in a letter to Labour leader Jacinda Ardern last week.
The policy was for a water royalty, not a tax, and was intended to gather a contribution from those who made a private profit from a public resource. That money would then be put back into water quality projects in the regions from which it was gathered, so Otago royalties would be spent in Otago.
Mr Parker said the charge of 2c per 1000 litres of water would not make a large difference to farming operations, even those that were marginal, and there had been a ``lot of scaremongering'' about the policy and ``some wildly exaggerated claims about likely royalty levels''.
He said at 2c per 1000 litres, the effect on turnover for a dairy operation would be less than 1% and for a viticulture operation even less than that. For dairy farmers it would amount to 6c per kg of milk solids (Fonterra's predicted payout for 2017-18 is $6.50 per kg of milk solids) and for wineries it would amount to about 2c per litre of wine.
Mr Cadogan said in his letter to Ms Ardern Central Otago did not have ``significantly degraded waterways, which can be taken as another sign that irrigation on its own does not have major negative environmental impacts''.
However, Mr Parker said that while Otago's waterways were ``better than the worst'' in the country, there were still water quality issues. In Central Otago, the quality of the Manuherikia River was declining and there were issues with the Taieri River in Maniototo. Irrigators who contributed to water quality issues should help pay to fix them, he said.
``If those who use and contribute to the pollution of water don't make a contribution, then who pays?''
Mr Parker, Ms Ardern and Labour primary industries spokesman Damien O'Connor have responded to Mr Cadogan's letter and acknowledged the ``significant contribution'' farmers and growers made to New Zealand's economy. Mr Parker said the level of the water royalty would not be finalised until affected sectors had been consulted.
Mr Cadogan said he gained ``some solace'' from Mr Parker saying in the letter the water royalty would be ``flexible enough to reflect the scarcity or abundance of water in different regions, the different quality of water in different regions, and its use''.
``This concession from Labour allows us, as a district, to argue our case and get a level playing field with other parts of the country, should the tax [royalty] be imposed,'' Mr Cadogan said.
A group of Maniototo women, meanwhile, is continuing preparations for a campaign against the water quality proposals, following a public meeting last week.
Puketoi Station farmer Emma Crutchley said the campaign would include a video that would ``positively portray'' responsible farming in Maniototo. The timing of the video and campaign was still to be decided.
Mr Parker said he planned to meet Mr Cadogan in Central Otago this week and was happy to meet farmers, as well.
