Irrigation likely to have big impact on future New Zealand economy

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 470,000 hectares.

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 irrigation developments.

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 output.

Ends

For more information contact:
MAF senior policy analyst, Murray Doak, Tel. 03 358 1860.

  

 

Last Updated: 28 September 2010

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