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31 May 2004
Irrigation has the potential to make a big impact on New Zealand's economy
through increased productivity, according to a report released by the Ministry
of Agriculture and Forestry.
The Economic Value of Irrigation in New Zealand report says development in
irrigation could increase annual farmgate GDP by between $330-million and $660
million by the year 2013.
Currently, irrigation's net contribution to GDP at the farmgate is estimated
to be in the order of $920-million in 2002/03. This is about 11% of total
farmgate GDP from all agriculture and horticulture production, and is produced
from 475,000ha (3%) of farmed land.
Report author, MAF senior policy analyst, Murray Doak says irrigation has
some clear benefits for New Zealand that need to be balanced against other uses
such as recreation and environmental objectives.
"Water needs to be sustainably managed, so it is important to find a balance
between its economic, environmental, social and cultural perspectives as well as
between national and regional interests," he said.
The report looks at two different scenarios for irrigation development.
It says the more likely scenario increases the irrigated area by 201,000
hectares while the possible scenario assumes the irrigated area increases by
The likely scenario consists of about 84,000 ha of private development and
117,000 ha of community scheme development. The second scenario uses the same
increase in private development and assumes 386,000ha of community scheme
development by 2013.
The modelling was based on valuing the production from current landuse with
irrigation, and then deducting the value of the production from the same land if
it was in dryland farming systems.
About $550m of the current value total is from horticultural landuses and
$270m from dairy farming. About 36% of the value comes from Canterbury, although
the region contains 60% of the irrigated land.
In the future, horticulture will generate most of the value from new
In the likely scenario, $190 million dollars could be produced from
additional horticultural production as a result of irrigation. The region to
gain the biggest benefit would be Canterbury, followed by Hawkes Bay, Northland,
Bay of Plenty and the Waikato.
Additional dairying would add in the order of $110m nationally, most of which
would be generated in Canterbury.
Under the second scenario, the benefits of irrigation would produce in the
order of an additional $274-million of horticulture output and $195m of dairy
For more information contact:
MAF senior policy analyst, Murray Doak, Tel.
03 358 1860.