Economic Benefits

Irrigation contributes to New Zealand’s economic activity in multiple ways, both directly and indirectly. Although improved on-farm economics can immediately be attributed to the introduction of irrigation, it is widely agreed that there are considerable flow-on socio-economic benefits to the surrounding communities as well.

It can be seen that

· Lifting on-farm agricultural production boosts farm gate returns;

· Boosted farm productivity requires additional ancillary inputs that include agricultural workers, service providers and transport;

· Higher on-farm volumes increase the value of primary processing sectors nation-wide.

Thus community-wide, irrigation impacts positively via higher employment, higher personal and household incomes and increased land values. These impacts boost community confidence and increase household spending on other goods and services procured within local communities.

In the case of the Opuha Dam and the North Otago Irrigation Company, post-construction studies show that farm expenditure, gross farm revenue and farm employment opportunities typically increase threefold when converting from dryland to irrigated agriculture.

In 2002-03, based on 425,000 ha of irrigation nationally, irrigation contributed $0.9 billion or 11% of farm gate GDP. In 2011/12, the study was repeated for the then 720,000 ha and estimated to contribute $2.2 billion. In 2015-16 it was estimated this figure had grown to $2.4 billion based on 800,000 ha irrigated.

These figures are at the farm gate and do not take account of flow-on socio-economic benefits to their communities.

A 2010 NZIER report stated that increasing irrigable area by 350,000 ha increases national GDP by 0.8 %. A 2012 report by AERU, based on 500,000 ha of existing irrigation in Canterbury with a further 250,000 ha of new irrigation, reinforced this.

This demonstrated that the Canterbury economy would receive an additional $2 billion in revenue, and just under 8,000 FTE’s, from the increased irrigation.

For New Zealand-wide, impacts these numbers rise to $3 billion in revenue and just under 8,400 FTE’s.

To ensure the future of any business, it must be sustainable – financially, environmentally and socially. Traditional perceptions around irrigation for agriculture are changing, with additional technology and new methods resulting in improved water and nutrient management, efficiency gains and positive environmental outcomes.