The extension could see as much as 10,000ha of land added to the scheme if the Falls Dam's wall is raised by 27m to boost the volume of water stored.
A feasibility study document containing information about storage and distribution of water, to be released before Christmas, will give landowners the details they need to make their decisions.
Manuherikia Catchment Water Strategy Group chairman Allan Kane said from the farmers' perspective ''the things they really need to know are how many hectares they will have under the area [of the proposed scheme] that they will have to be irrigated, and the capital costs and running costs per hectare''.
''In order to be able to provide them with that information, we have to know what all the off-farm costs are.
"We need to establish the total capital cost of the dam and the distribution systems in order to divide that by the number of hectares it serves to give the farmers the total off-farm capital cost per hectare,'' Mr Kane said.
Proposed options under the strategy included raising Falls Dam, at the head of the Manuherikia Valley, by 5m, 15m or 27m, building a dam at the head of the Ida Valley, and upgrading the
water race network in the lower Manuherikia Valley. Another option, piping water from Lake Dunstan, was discarded. Manuherikia Valley farmers were ''extremely fortunate'', as the location of Falls Dam at the head of the valley meant no pumping costs for irrigators, Mr Kane said.
Irrigation systems in the area needed to change for several reasons, he said.
They included complying with standards in the Otago Regional Council's plan change 6A, fitting in with government instructions to regional councils to improve water quality in waterways and increase minimum flows, and the expiry of mining water privilege rights in 2021, when landowners would need a resource consent to take water. The changes meant the amount of water allocated to landowners was going to drop, Mr Kane said.
However, he said there was no shortage of water in the Manuherikia Valley, just a lack of storage. The feasibility study, which began last year, was about halfway through, and no significant changes to the possible options or costs had been identified so far.
Funding for the $1.5 million study was met by a $750,000 grant from the Government's Irrigation Acceleration Fund.
The remaining money is coming from the Otago Regional Council, catchment irrigation companies, private water right holders and dryland farmers.
Information from the study was being released as it became available, and a full package, including costs, anticipated financial returns, environmental limitations, environmental impacts and how those would be mitigated, would be publicly released by Christmas, he said.
At present, 25,000ha of land were irrigated in the Manuherikia Valley, a figure that could be increased to 35,000ha by increasing the height of the Falls Dam wall by 27m.
Effects of the plan were expected to be significant economic benefits for Central Otago, in the short term during construction and long term through increased production.
