Executive Summary
- This report assesses the environmental, economic and social impacts of allocating to irrigation an amount of water that matches the provisions in the now defunct 1969 Order in Council that granted water rights to the Minister of Electricity for the Upper Waitaki Power Scheme The assumption is made that after allowing for existing irrigation that a further 25,000 hectares could be irrigated with the quantity of water specified in the Order in Council as being able to be used for irrigation.
- The environmental impacts section of this report is based on material sourced from existing publications and interviews with a number of people with knowledge of the area and the issues. Economic and social impacts were assessed using methodologies similar to those used by Harris et al (2004). The report does not include an assessment of the economic, social and cultural impacts of any environmental changes.
Environmental impacts
- From an environmental perspective the establishment of a further 25,000 hectares under irrigation within the upper Waitaki could have both a positive and negative impact on the environment. From a positive perspective, irrigation would reduce the erosion risk within the basin and also increase the opportunities for enhancing biodiversity values. From a negative perspective, irrigation increases the risk of contamination of ground and surface waters and could adversely impact upon landscape values.
- Wind erosion is a significant issue in the upper Waitaki Catchment. The sparse vegetation on large areas of land in the Mackenzie Basin gives little protection to the shallow, friable soils which continue to be eroded by frost heave and westerly winds. A mean soil loss of 0.22 mm/year or 2.2 tonnes of soil lost per across a number of sites within the Mackenzie Basin has been reported. While it cannot be assumed from this information that erosion rates will continued at this level in the future, the results do confirm a strong relationship between the percentage of vegetation cover and erosion risk. The problem of bare ground and exposure to wind erosion has been compounded since the early 1990s by the rapid spread of hieracium particularly on the poorest soils. One of the most significant impacts of further irrigation in this area would be a reduction in the amount of bare ground and corresponding reduction in wind erosion risk.
- Testing has shown that water quality in most ground and surface water bodies within the upper Waitaki Catchment is generally very good. However, under a scenario where a further 25,000 hectares is irrigated, it is likely that significant quantities of nitrogen will be added to the system. Evidence from other regions suggests that where ever there is an intensification of land use the risks of nutrient and faecal contamination of waterways increases significantly. There is some suggestion that the effect of increased nitrogen inputs to waterways may be limited unless there is a corresponding proportional increase in phosphorus inputs, but this is uncertain. Most vulnerable are the smaller streams and rivers. Loss of water quality has both regional and national costs through impacts on recreation and other amenity values, human health and vulnerable ecosystems. This risk may be partly offset by the method of irrigation used and other improved land management techniques.
- Irrigation of the dry Mackenzie Basin to create greener landscapes may be seen by some as detracting from the general appearance and visual character of a nationally significant landscape. In the Mackenzie the major landscape disturbance has already occurred with the completion of potential storage and supply structures from the Upper Waitaki Power Scheme. In addition hieracium invasion has reduced tussock density and visual appeal in many areas. Irrigation will undoubtedly further change the visual appearance of some areas within the upper Waitaki. However, not all irrigated areas will be visible from the main highways lessening the impact upon visitors to the region.
- While the ecological character of the upper Waitaki has been well documented no specific studies have been reported on the impacts of intensification on biodiversity values. Many areas within the upper Waitaki have already been protected as a result of the tenure review process and voluntary covenants. Irrigation may provide the opportunity to enhance further areas.
Economic impacts
- The economic analysis assumes a further 25,000 hectares could be irrigated within with the quantity of water specified in the former Order in Council as being able to be used for irrigation. The 25,000 hectares was pro-rated across the command area using anticipated development scenario from the Mackenzie Irrigation Company provision of information to the WCWAB. One scenario looked at the takes occurring only above Ohau A power station, and the other scenario included takes above Waitaki, Aviemore and Benmore as well as takes above Ohau A. All other assumptions are adopted directly from the Harris et al (2004).
- It should be noted that the analysis is undertaken on a particular scenario, but that this scenario does not necessarily represent the single "right" scenario. The scenario selected to represent a reasonable level of inputs and returns that could reasonably confidently be expected to occur based on available evidence. There are other scenarios which may arise, and for this reason sensitivity testing was also undertaken using higher and lower assumptions than the base scenario.
- The results show that the options for irrigation tested produce considerable surplus in terms of net benefit from agricultural production, but a considerable loss in terms of hydro-generation. Using base case assumptions the hydro losses are greater than the agricultural benefits in both scenarios of development. There is little difference in terms of agricultural outcomes between the two scenarios, but the electricity generation losses are 10 to 20 percent greater when the quantity of water specified in the former Order in Council is concentrated in the upper part of the catchment. The negative outcome overall is not changed by the discount rate used, but is very sensitive to the assumptions about agricultural returns and inputs including water use.
- Over 50 percent of the properties in the Mackenzie Basin are currently in negotiation with Land Information New Zealand (LINZ) over tenure review. In the majority of these negotiations access to water for irrigation will be a significant factor. For this reason the two processes, provision of water and tenure review, are likely to be linked.
Social impacts
- It is generally accepted that irrigation can transform society as well as land and landscapes. As land use intensifies through the upper Waitaki Catchment and land use changes occur it is expected that significant, mostly positive, social changes will also occur. Some of the changes identified include:
- an inflow of newcomers to the district to purchase properties and work on the farms
- the arrest of rural decline in non-irrigated areas and strengthened viability of educational, health and other community services in nearby townships
- the age structure of both the residential population and the farmers and farm workers occupational group is likely to become more youthful
- participation in community activities and membership of voluntary organisations and clubs may decline in the short term, as newcomers adjust to their new circumstances, but strengthen in the longer term
- value conflicts between some urban residents and farming communities over the environmental impacts of intensive farming systems.
- Under the base case used in the economic analysis, there was expected to be an increase of approximately 300 to 400 full-time equivalent (FTE) employees directly employed in agriculture (70/cumec), and an associated population gain of approximately 800 to 900 people (180/cumec). Value added, an indicator of economic activity, changes by approximately $12 to $13 million per annum [Although it should be noted that this does not include the change in added value associated with the lost energy generation, which would be substantial but largely does not affect the local economy.] ($2 to $3 million per cumec) directly associated with the increase in agricultural production. Further flow-on effects are expected in the local economy, but these have not been calculated.
