» Industry Sectors » Irrigation


Water has been described as the white gold of Central Otago....

In many ways water is the most valuable resource to Central Otago, affecting its future prosperity and the ongoing quality of life of residents.

The importance of water to the district has been highlighted by a report commissioned by the Central Otago District Council, in which it asked BERL to provide a picture of the value of water to the economy and the community. This was received in early 2009.

The indication at present is that the direct and indirect net impact of irrigation is to increase District GDP by approximately $93 million per annum and hydro electric generation increases District GDP by a further $15 to $20 million per annum. This is a total increase by about $110 million per annum. The total Value Added or GDP in the Central Otago District economy in 2007 was estimated to be $664 million.

The impact of commercial water uses is therefore estimated to contribute at least 16.6% of GDP in 2007.

The net increase in direct and indirect employment generated by the irrigated production analysed is about 1,156 FTEs, and of hydro electricity generation is about 140 FTEs, giving a total of about 1,300 FTEs. The total FTEs employed in Central Otago District in 2007 were 8,433, and so the impact of the irrigation and hydro electricity generation industries is to employ over 15% of those employed in 2007.

For every 14 people employed in core driver industries and business services in the district there is about 8 people employed in providing private and public services to people. There are probably over 4 of those 8 not accounted for in the multiplier analysis. This means that the total employment would increase by about 20% more than estimated in standard multiplier analysis.

What this implies is that the multiplier analysis has shown that commercial water uses generated an additional 1,300 FTEs estimated with standard multiplier analysis. The additional employment due to the unaccounted group could increase this number by 20%, to about 1,560 FTEs.

By accounting for dependents, a conservative estimate is that roughly 2,500 – 3,000 of the districts population is resident due to the existing commercial water use. For example, a spouse or partner employed in a totally unrelated sector may owe his or her presence in Central Otago to the employment of the other partner in a water dependent industry. This was not directly calculated by BERL.  A full copy of the report can be downloaded here.

Two major irrigation projects are currently under investigation in Central Otago.  The Tarras scheme is the most advanced and proposes to distribute water pumped from the Clutha River via an underground pipe line to around 6,000 ha of land in the Tarras area.  Water would also be provided for domestic, firefighting and light industrial purposes.  More information about the Tarras project is available here.  Following the decision of the Otago Regional Council in June 2013 not to act as a dry shareholder for this scheme the directors announced that the futhre of the project, if any, was unclear.

The Manuherikia Catchment Water Strategy Group (MCWSG) is working to modernise and upgrade water management in the Manuherikia and Ida valleys.  Water users in the Manuherikia catchment are facing several challenges including water availability from the existing irrigation infrastructure constraining growth potential; the majority of the catchment's water permits which are based in mining privileges and  expire in 2021 will need to be replaced with new RMA consents that will require a higher level of efficency in conveyance and use; and the National (NPS) and Regional (Plan Change 6a) policy requirements for higher standards to be adhered to with respect to freshwater management that will require changes to many on-farm irrigation practices.  The MCWSG has completed pre-feasibility studies that found that the Manuherikia valley is not water short but that water is available at the wrong time.  More storage and efficency improvements could improve reliaibility and increase the irrigated area, potentially from the current 6,500 ha that are fully irrigated to around 21,000 ha.  A full feasibility study is about to commence on a number of the more promising options that have been identified..  A community-wide consultation designed to build a consensus on rural water use in the Manuherikia and Ida valleys has resulted in the development of a Community Proposition that is intended to guide the development of water use in these valleys. 

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