The objective of this study is to establish the economic demand function for irrigation water in the area proposed as the Rakaia Irrigation Scheme. The analysis is dominated by the limitations of the deterministic approach used as the framework for the linear programming study. Data used in the study were based on three separate sample surveys of the farmers in the region and upon information supplied by consultants and scientists whose knowledge was appropriate. In the first chapter the consequences of using a deterministic or stochastic seasonal construct with which to examine the derived demand for irrigation water within a region is examined. The first section of the second chapter describes the productive characteristics of the region before irrigation development. Succeeding sections are devoted to the development of the integer linear programming model which was used to derive the demand function by sequential optimisations, problems in the execution of the programming analysis, the results of the analysis and an analysis of factors which have important effects on the temporal transition rate from dryland to irrigation. The last section of Chapter Two is devoted to an examination of a monetary mechanism which is shown to have an important inflationary effect. The implications of the effect for irrigation development and for national policies are discussed. Finally in Chapter three, two institutional matters of particular concern for irrigation development are discussed; the first concerns the method of pricing water for irrigation schemes and the second some particular problems in the present legislation affecting the appeal provisions necessary to ensure that social welfare is maximised when public funds are invested in large scale irrigation projects.