South Canterbury farmer and former Federated Farmers national president William Rolleston presented the funding proposal at a recent federation meeting in Waimate.
''This is simply throwing ideas around at this stage to get people thinking,'' he told Central Rural Life last week.
''Given enough interest - and it seems there may well be - then a proper prospectus, etc, would need to be drawn up.''
Dr Rolleston's proposal is an alternative to the joint venture already under consideration.
Hunter Downs Water has resource consent to use Waitaki River water and plans to irrigate 12,000ha towards Timaru. When it failed to sell enough shares to farmers to make it viable, businessman Gary Rooney offered to buy into it in a joint venture with the water company.
Under the joint venture structure, there would be 14,000 water shares in the scheme and 14,000 ordinary shares. Current water users would buy 7000 water shares for $2649 each and 7000 ordinary shares for $1 each.
Rooney Holdings would do likewise and progressively sell 5000 of the water shares to future water users. It would keep the 7000 ordinary shares plus the 2000 residual water shares.
''The ordinary share is essentially the ownership of the company, having a vote to change policy such as water use/storage rules and fees, the right to appoint directors, ownership of the asset and collection of any dividend,'' Dr Rolleston said.
''The water share simply gives the holder the right to water and, once irrigating, the obligation to pay the water charges.
''So future water users who do not have an ordinary share will not own or control the scheme but simply get water and pay the obligatory supply fee.''
In his new proposal for 100% farmer ownership, future water users would buy 5000 water shares that would only attract an annual fee once they started irrigating, and the current water users would buy the residual 2000 water shares. Ordinary (ownership) shares would flow with the water shares.
''Previously, non-irrigating shares attracted an annual fee, which was why they weren't taken up,'' Dr Rolleston said.
''But under the new proposed structure there is no annual fee for these shares, allowing farmers to spread the expenditure of buying into the capital of the scheme and developing their on-farm irrigation.''
