The North Otago Irrigation Company scheme has contributed to the positive economic change in the Waitaki district over the past 10 years, according to a report commissioned by the company.
NOIC chief executive officer Robyn Wells spoke to councillors at a Waitaki District Council committee meeting yesterday, reiterating some of the social and economic benefits of the scheme that were documented in the report.
The report considers the economic and social impact of the scheme on the NOIC command area, which includes the rural area between Duntroon, Maheno and Oamaru, and the townships of Duntroon and Oamaru.
NOIC is now developing stage two of the scheme and expects to have a prospectus issued before Christmas.
The company has indicated it will ask the council to support the development of stage two by reconsidering the terms of its existing loan.
Ms Wells told the meeting yesterday she had had a lot of positive feedback from farmers about the scheme, including that their businesses could now support younger family members coming home and they now employed additional farm staff.
New families were coming into the district and rural support businesses were benefiting as a direct result of the NOIC scheme, she said.
“We want to see vibrant communities.
“We drive through towns like Ashburton and see the vibrancy.”
Mayor Gary Kircher reflected on the historic council decision to contribute to stage one of the scheme, which commenced in October 2006, and the positive spin-offs that have occured over the last few years.
“Everything that we hoped would happen has been borne out in the report,” he said.
“We are getting a return on that money.
“We had hoped to increase economic activity and we knew farmers weren’t going to be the only ones to benefit.”
He said businesses were benefiting and extra jobs had been created as a result.
“Farmers took a bit of a leap into the unknown (at the time).”
According to the report, more than 13,000ha of land had so far been irrigated as part of the stage one development.
The report said the current Gross Domestic Product (GDP) for the district was estimated to be around $973 million, and the contribution of irrigation from the NOIC scheme was $48 million, about 4.9 percent of the district’s GDP.
This was an increase from 2010, when GDP was estimated to be $902 million, with the difference based on a growth rate of 1.9 per cent per annum over the last 10 years, the report said.
The Waitaki economy was built on three key rural sectors – agriculture, associated manufacturing (food and beverage) and mining, the report said. Tourism was also positioned as a key driver of growth, given that it created jobs and generated economic activity in other sectors.
Support services like retail, construction, and business and property, along with community services like health and social services, all prospered if the key export sectors experienced growth, the report said.
Land use in the district had changed as a result of irrigation, with a move from predominantly dryland sheep and beef farms to dairy and dairy support, sheep/beef grazing and cropping.
Of the 13,000ha in the NOIC command area, the number of hectares used for dairying had increased from 2783 (pre-NOIC) to 8455 (post-NOIC), the report said. Dryland dairy support, which previously occupied an area of 1624 ha (pre-NOIC), was now 2139ha of irrigated land (post-NOIC).
“The increase in economic output shows the significant economic impact that the NOIC irrigation scheme has had on the local communities and New Zealand,” the report said
“This reflects the efficiency of dairying to convert water to dollars, with dairying producing around 2.1 times more earnings before interest and tax than any other agricultural land use.”
By LINDA MCCARTHY